Crypto shadow banking explained and why 12% yields are common – News 24-7 Live News 24-7 Live
Crypto shadow banking explained and why 12% yields are common

Crypto shadow banking explained and why 12% yields are common

Some of the largest non-bank firms in cryptocurrency including including BitGo, BlockFi, Galaxy Digital and Genesis are stepping up to meet investor demand for dollars amid a long-standing weariness by banks to lend to individuals or companies associated with Bitcoin and other digital assets.

A swathe of shadow banks in the $1.6 trillion cryptocurrency market have figured out how to generate returns of 12% with minimal risk: Lend U.S. dollars to hedge funds so they can buy Bitcoin.

Some of the largest non-bank firms in cryptocurrency including including BitGo, BlockFi, Galaxy Digital and Genesis are stepping up to meet investor demand for dollars amid a long-standing weariness by banks to lend to individuals or companies associated with Bitcoin and other digital assets. In this case, they’re lending to hedge funds that need cash to buy Bitcoin for a trade that is almost guaranteed to pay out at annualized returns that have recently hit 20% to 40%.

News Source: Hindustan times

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