Bitcoin Lending Platform BlockFi Raises $350 Million

Crypto lending firm BlockFi has raised $350 million in Series D investment, with a valuation of $3 billion.

BlockFi Promoting Crypto Finance

Centralized lending platform BlockFi has raised $350 million from venture capitalists led by Bain Capital Ventures, partners of DST Global, Pomp Investments, and Tiger Global co-led the Series D funding round.

Founded by Zac Prince and Flori Marquez, BlockFi had raised a total of $100 million in seed and Series C funding rounds, with a valuation of $450 million in August last year. In less than six months, the company has attained a market valuation of $3 billion. Their monthly revenue is over $50 million.

PayPal founder Pieter Thiels’ venture fund Valar Ventures, Breyer Capital, Susquehanna Government Products, Jump Capital, and Paradigm were some of the early investors in BlockFi.

BlockFi has over $15 billion in assets and boasts a user base of 225,000. In comparison, on top DeFi lending platforms like MakerDAO and Compound, the total asset is $6.8 billion and $5.6 billion, respectively. 

Crypto lending and decentralized exchanges have been the major contributors to the $41 billion boom in DeFi liquidity. BlockFi’s competition in the centralized category includes Crypto.com, Celcius Network, and Hodlnaut.

BlockFi offers crypto-backed—Bitcoin, Ethereum, Litecoin, and Paxful Gold stablecoin—loans at a 4.5% annual interest rate. It also offers annual returns of up to 8.7%—similar to a savings bank account—on crypto holdings of the above cryptocurrencies adding stablecoins and LINK token.

The online platform also functions as a crypto exchange and will soon rollout BTC rewards VISA cards.

Disclosure: The author held Bitcoin at the time of press.

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How Microstrategy CEO Turned “Scary” Bitcoin Investment Into More Than $250 Million

 

Key Takeaways

  • Saylor states that the economic crisis of 2020 caused hyperinflation of major assets.
  • “Bitcoin is about digital scarcity,” says Saylor.
  • He believes that cash is losing value at a pace far greater than the media reports.

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Michael Saylor, CEO of Microstrategy, recently made headlines for revealing that he personally owns $245 million worth of Bitcoin. His company’s stash is nearly double that. 

Under Saylor’s leadership, Microstrategy Recently increased its BTC holdings by $175 million to a whopping $425 million. 

But why the big bet? The pandemic, of course. 

More importantly, how this pandemic, and its economic fallout, has changed the world of money forever.

Stocks Are Now Hyperinflated. Cash Will Become Worthless

Saylor states that while the nominal rate of monetary inflation is zero, the pandemic caused hyperinflation of assets. This wasn’t reported in the news, however. 

Because central banks like the ECB and Federal Reserve have been increasing the money supply to stimulate the economy, the value of stocks and their companies has seen a major decoupling. 

“Every asset that represented the value of an entity was going up in value, while the actual value of the entity was going down,” explains Saylor. “The nominal inflation rate is zero, but the asset inflation rate is 15%.” 

The Microstrategy CEO pointed out that Apple stock has somehow doubled despite flat revenues. With rampant asset inflation and plummeting cash value, Saylor sought alternative assets to preserve his wealth.

At first, Saylor was skeptical of Bitcoin, saying it felt “scary.” 

However, he soon changed his mind, concluding that it was more efficient than gold or any other asset as a store of value. 

Saylor Has Invested Hundreds of Millions in Bitcoin

Since this realization, Saylor directed his company to buy $425 million worth of Bitcoin in total. He also personally holds over 17,000 BTC. 

The decision makes perfect sense, according to Sayler. 

He views money as a form of energy and Bitcoin as the most efficient way to channel that energy, especially now that the fiat supply is expanding rapidly. In his mind, the risk does not come with a broad bet on the crypto industry, but rather in choosing Bitcoin specifically.

“Bitcoin is about digital scarcity,” says Saylor. “If you don’t understand monetary energy, you don’t understand Bitcoin.” 

Saylor cut his teeth investing in valuable .com registrars, buying domains like “wisdom.com,” flipping them for a profit later. He views his confidence in the .com domain category as equivalent to choosing Bitcoin. 

Because Bitcoin is the dominant blockchain and has had ten years to mature, Saylor believes he has made the right decision, even if not everyone around him feels the same way. 

“There are people in the outside world that don’t agree with me,” says Saylor. “If they all agreed with me, I wouldn’t be able to buy Bitcoin. It would be too expensive.”

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Square’s Bitcoin Investment Made $2 Million Over The Last 24 Hours

Bitcoin price blasted back above $11,000 in response to yesterday’s news that the Jack Dorsey-led Square Inc. had purchased 4,709 BTC to add to company reserves.

Since the news broke about the payment firm’s innovative corporate investment – a growing trend now – the cryptocurrency has risen 4%, adding an enormous sum in ROI to Square’s holdings. Here’s what it could mean for the market, and if a domino effect is beginning with this latest development.

Square Inc. Invests In Bitcoin, Discloses Purchase Of Over 4700 BTC

Just like in the world of stocks, commodities, and more, when businesses make moves, the assets related to them respond. The response from Bitcoin recently thanks to one corporate giant’s interest in the cryptocurrency has been substantial. But there are also few companies that are as integral to the asset’s growth as Square Inc.

Payments mammoth Square is the parent company of Cash App, and its CEO is outspoken Bitcoin bull Jack Dorsey. Dorsey has several times in the past referenced the cryptocurrency becoming the internet’s currency eventually.

Related Reading | Bitcoin (BTC) Blasts Through $11,000 Following Bullish Triangle Breakout

Bitcoin itself has been positioned as everything from the next global reserve currency, to a store of value, safe haven asset, and an insurance policy against the unknown.

Dorsey’s Cash App began offering BTC purchases back at the end of the crypto bubble but has built itself a profitable business out of it over the years. Now, its Square’s own investments that are profitable.

bitcoin btcusd btc square


<style=”text-align: center;”>BTCUSD Hourly Chart Square News FOMO Breakout | Source: TradingView

Supply Shock Prompts Immediate FOMO, Holdings Earn $2 Million In 24 Hours

There will only ever be 21 million BTC to exist, and while 4709 may not seem like a sizable chunk taken out of that, it is only the second stone cast by tech corporations seeking to add the cryptocurrency into its reserves alongside cash.

The trend is due to cash losing its buying power, and tech pioneers are looking for new-age solutions to old world problems that have left the economy on the ropes.

Related Reading | Analyst: The Next Bitcoin Break Will Set The Stage For Weeks To Come

Bitcoin was designed to be the solution to these problems but is still very early on in its young lifecycle of just ten years. Only recently, have corporations like Square, MicroStrategy, and perhaps soon more, started looking at BTC to stave off inflation. It could ultimately become a widespread trend and one that brings the peak of the next bull run to incredible heights.

The initial reaction was enough to cause a 4% rally in Bitcoin, taking Square’s investment up $2 million over the last 24 hours, based on a $425 gain across 4,709 BTC bought.

As more follow this lead, daily gains like these may return to being the norm once again for Bitcoin.
Featured image from Deposit Photos, Charts from TradingView

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