Lending supply and borrowing demand remains strong
13 May 2019 London
Image: Shutterstock
Lending supply and borrowing demand not only remains strong but is growing among the top crypto hedge funds, exchanges, market makers and trading houses around the world, according to a study by Lendingblock.
More than 50 percent of institutions surveyed said demand for borrowing is expected to be higher than lending, while 82 percent of firms expect to be taking at least one loan out at any given time, and of those, 30 percent expect to have more than five.
Some 50 percent of institutional participants expect to be lending or borrowing between $1 million and $5 million equivalent at any point, while 25 percent of respondents expect to be lending or borrowing between $5 million and $10 million and 25 percent above $10 million.
LendingBlock said the opinions are likely correlated to calmer markets and a less bearish momentum that is likely linked to what seems to be a positive broader market outlook.
Bitcoin and Ethereum remain the top two digital assets that clients are interested in borrowing and lending.
The study also found there is substantial interest to increase the use of stable coins entering into the lending market, specifically US-backed stable coins that institutions can use for both principal and collateral.
A further 64 percent of respondents said that they want to use stable coins as collateral when they enter into a borrow.
The report examined the borrowing and lending needs of leading crypto institutions between January and April 2019.
Commenting on the findings, Steve Swain, CEO of Lendingblock, said: “When our clients borrow, they are borrowing for very specific purposes, such as to access working capital, to hedge a portfolio or to execute a short sell. When our clients lend, they are happy to lend out multiple loans for longer periods of time as their goal is to generate yield on their passive investments.”
He added: “As the results show, borrowing demand is strong, this indicates healthy returns for lenders given rates are set by market equilibrium on the Lendingblock exchange.”
Kelly Pettersen, head of business development and marketing, at Lendingblock, commented: “Firms are now relying on digital assets for short-term capital needs versus a borrow to short.”
She added: “This data tells us that the trend is shifting to reflect a reliance on and belief in crypto to support businesses everyday operations, rather than on betting in the short term that the asset drops in value.”
More than 50 percent of institutions surveyed said demand for borrowing is expected to be higher than lending, while 82 percent of firms expect to be taking at least one loan out at any given time, and of those, 30 percent expect to have more than five.
Some 50 percent of institutional participants expect to be lending or borrowing between $1 million and $5 million equivalent at any point, while 25 percent of respondents expect to be lending or borrowing between $5 million and $10 million and 25 percent above $10 million.
LendingBlock said the opinions are likely correlated to calmer markets and a less bearish momentum that is likely linked to what seems to be a positive broader market outlook.
Bitcoin and Ethereum remain the top two digital assets that clients are interested in borrowing and lending.
The study also found there is substantial interest to increase the use of stable coins entering into the lending market, specifically US-backed stable coins that institutions can use for both principal and collateral.
A further 64 percent of respondents said that they want to use stable coins as collateral when they enter into a borrow.
The report examined the borrowing and lending needs of leading crypto institutions between January and April 2019.
Commenting on the findings, Steve Swain, CEO of Lendingblock, said: “When our clients borrow, they are borrowing for very specific purposes, such as to access working capital, to hedge a portfolio or to execute a short sell. When our clients lend, they are happy to lend out multiple loans for longer periods of time as their goal is to generate yield on their passive investments.”
He added: “As the results show, borrowing demand is strong, this indicates healthy returns for lenders given rates are set by market equilibrium on the Lendingblock exchange.”
Kelly Pettersen, head of business development and marketing, at Lendingblock, commented: “Firms are now relying on digital assets for short-term capital needs versus a borrow to short.”
She added: “This data tells us that the trend is shifting to reflect a reliance on and belief in crypto to support businesses everyday operations, rather than on betting in the short term that the asset drops in value.”
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