Is Bitcoin Lending Making a Comeback? Don’t Miss Out on This Financial Drama!

by

CoinDesk Indices

What to know:

You’re reading Crypto for Advisors, where we dissect digital assets while channeling our inner financial detective. Wanna subscribe and be part of the drama? It lands every Thursday. Don’t leave me hanging.

Guess what, folks? Happy Uptoper! 🥳 Today, our favorite investment wizard, Gregory Mall from Lionsoul Global, explains why bitcoin-backed lending is going through a glow-up in both the decentralized and centralized realms. Spoiler alert: it’s juicier than your favorite Netflix series!

And just to spice things up, our CEO superstar, Lynn Nguyen from Saros, is here to tackle your burning questions about tokenized stocks. Because why not throw a side quest in there, right? 💁‍♀️

Huge shoutout to our fabulous sponsor, Grayscale! If you’re in San Francisco and looking for some cosmic vibes, join their exclusive event, Crypto Connect, on October 9. Trust me, it’s better than scrolling through TikTok. Learn more, don’t be shy.

– Sarah Morton

Crypto as Collateral: What Wealth Managers Should Know About… Oh Never Mind, Just Read On!

So lending has always been the bread and butter of financial markets – and crypto wanted in on the action, obvi. 💸 Turns out, crypto lending strutted onto the scene before Decentralized Finance (DeFi) became the cool kid on the block. Talk about confidence! Lombard lending has medieval roots (yes, knights and dragons, folks!) that go way back when merchants were basically the credit card companies of their time. So, it’s safe to say this ain’t new; it’s simply wearing a cooler outfit now.

Why do lenders dig crypto, you ask? Simple! These digital coins sell like hotcakes, 24/7/365. With the thrill of speculation, who wouldn’t want some leveraged drama in their lives? And let’s face it, Bitcoin maximalists are practically hoarding their BTC like it’s the last chocolate in the pantry – opting to borrow instead of selling. Classic clash of immediate gains versus long-term wisdom! 🍫

The History of the Collateralized Lending Market

Believe it or not, bitcoin lenders popped up in 2013 like mushrooms after a rain – but it was the ICO boom of 2016-2017 that attracted the big players like Genesis and BlockFi. Even the infamous 2018 crypto winter didn’t put a damper on their vibes; in fact, retail-focused heroes like Celsius and Nexo charged in like they just defeated a boss on their journey.

Then came DeFi in 2020-2021, and boy, did it turn up the heat! Competition was hotter than a summer day, and balance sheets were living on the edge. Some players were basically playing Monopoly with loans, and we all know how that game ends (hint: someone flips the board). 😱

Fast forward to the summer of 2022 when everything crashed – think of it like a soap opera but less entertaining. Major CeFi players went belly up, leading to billions missing in action. Inspectors in suits popped up, declaring “whoops, that was a disaster!” But in a shocking twist, the remaining CeFi players buckled up their pants, implemented stronger policies, and tried to piece things back together, while DeFi gradually regained its groove. 🎢

Does CeFi have a role next to DeFi?

Hey, here’s a thought: crypto loves transparency, and yet CeFi isn’t going anywhere. In fact, it’s tightened up like your ex after a breakup – with just a few key firms dominating the loan scene! And institutional players are still cozying up to established lenders because dealing with the wild west of DeFi is still a bit like crossing a tightrope while juggling knives. Who wouldn’t be cautious? 🤹‍♂️

Therefore, yes, CeFi lending is poised for growth, but it knows its place. Expect it to moonwalk beside DeFi, giving both the comfort of regulation and the thrill of transparency! ✨

– Gregory Mall, chief investment officer, Lionsoul Global

Ask an Expert

Q. How will Nasdaq’s integration of tokenized securities into the national market system benefit investors?

Oh, honey, think distribution, efficiency, and transparency! It’s akin to getting exclusive concert tickets without having to camp out for three days. 🌟 This is a real game-changer for everyday investors who haven’t yet applied for a finance degree. With blockchains coming in hot, we’re headed towards a glorious future with far more transparency! If you’re in rural America, picture earning 5 to 7% on tokenized stocks without needing someone in a suit to give you a shimmy of approval. It’s like finding a $20 bill in the laundry! 🧺

Q. What challenges might investors face if the SEC approves Nasdaq’s proposal?

Now, hold on to your hats, because it won’t be smooth sailing! 🏴‍☠️ Technical bumps will pop up like unwanted guests. Mixing the new school with the old is like trying to teach your grandma to use emojis. And that’s just the initial hiccup! Early investors need clarity on regulations and guidance on token rights because no one wants to be left in the lurch when dividends or voting rights are on the table. Cybersecurity threats have spiked, and we all know not to ignore that. Nasdaq, if you’re listening, don’t let us down!

But hey, I believe in solutions. I mean, we all watched the final season of our favorite series, didn’t we? 🥲

Q. Nasdaq’s concerns regarding European trading of tokenized stocks?

Ah, the infamous hoodwink! 💔 Investors in Europe have been snatching up securities without full rights – like getting a dessert without any actual cake. Nasdag aims to fix this by ensuring that you get your full suite of perks: voting, dividends, and all the good jazz! It’s basically getting access to a VIP lounge instead of a cramped corner table at the bar. Imagine trading fully-fledged stocks anytime, day or night, with lower fees and instant gratification! We love that for you! 🎉

– Lynn Nguyen, CEO, Saros

Read More

2025-10-02 19:40