Mike Novogratz’s Merchant Bank Bets Big on Crypto Lending Platform ‘BlockFi’

Mike Novogratz’s crypto merchant bank, Galaxy Digital, has announced that it is the leading contributor in a $52.5 million fundraising round for BlockFi, a crypto lending startup. The company raised its funding over two rounds, the first bringing in a total of $1.55 million in February. Top contributors in the initial round were Kenetic Capital, Consensys Ventures, and SoFi.

The young New York-based company offers lending products and services to both corporate and retail customers. Business Insider reports that BlockFi’s loan book is “in the millions.” The company also reportedly has plans to expand across the US and into the international market and to add more Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term to its roster.

Excited to get into the crypto lending business with @TheRealBlockFi https://t.co/ZC7qBloZtZ

— Michael Novogratz (@novogratz) July 24, 2018

BlockFi’s Crypto Lending Platform Allows Users to Keep their Crypto

According to BlockFi president Zac Prince, the company is also interested in opportunities in lines of credit and credit cards, as well as fixed-income and debt investments.

BlockFi currently offers investors the ability to use BTC or ETH as collateral to borrow up to $10 million. The idea is that the investors can gain access to fiat without having to sell their cryptocurrency completely. “That lets investors retain ownership of their crypto and not miss out on the next potential price surge, but also have cash on hand to pay employees or go on a vacation, for instance,” Business Insider explained.

Loans are offered with a 12 percent standard interest rate, which seems to be on par with the lending rates of other crypto lending platforms.

”A Herd of Institutional Investors” is Coming for the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term Space

Galaxy Digital has made a number of large, high-profile investments over the past several months. In June, the bank dropped $35 million and $15 million into High Fidelity and Alpha Point, respectively. A number of the bank's investments in the cryptocurrency market have not been publicly disclosed.

Despite the long-standing doldrums that the cryptocurrency markets have been stuck in since the beginning of the year, Mike Novogratz remains optimistic about the future of the industry. Last week, during his keynote speech at Korea Blockchain Week, Novogratz said that “a herd of institutional investors” is headed for the crypto markets.