New York-based digital currency lending platform BlockFi revealed on Tuesday it had secured $52.5 million from Galaxy Digital Ventures, the crypto and blockchain investment company created by former hedge fund manager Michael Novogratz.
The financial injection, which includes a loan purchasing facility and equity investment, is the first institutional funding provided for digital asset-backed loans, according to BlockFi’s statement. The startup attributed Galaxy Digital’s interest to the growing demand for crypto-to-fiat lending.
“The support we’ve seen from existing clients and investors highlight the strong demand for leveraging Bitcoin or Ether for low-cost USD loans,” BlockFi co-founder and CEO Zac Prince commented.
Novogratz expressed his satisfaction with the latest investment, noting that a strong lending market is crucial for financial systems.
“BlockFi’s institutional approach and deep lending expertise were key drivers in our decision to partner with them,” the billionaire crypto supporter said.
Galaxy Digital’s hefty financial contribution has resulted in its head of principal investment, Chris Ferraro, joining the board of BlockFi.
Speaking about the blockchain sector and institutional funding at the Korea Blockchain Week in Seoul, Novogratz maintained that a “herd of institutional investors” is coming for digital currencies.” At first, they will participate through crypto venture capital funds they have already invested in and only then will they start buying virtual coins, Novogratz told The Street following his speech at last week’s conference.
The lending platform, which launched in January, works in the following way: upon getting their loan applications approved, users send BTC or ETH to BlockFi and then get US dollars transferred into their bank accounts. As specified by the company, typical customers are world travelers, first-time home buyers, and industrial-scale crypto miners.
This article appeared first on Cryptovest
