BlockFi provides lending products to cryptoasset market participants. We recently raised seed funding to bring additional liquidity to the cryptoasset sector.
For the first time, a financial asset has been created that is both natively digital and global. A market around these assets and the technology that underpins them, blockchain, is growing rapidly. This innovation creates the opportunity for lenders to assign a global price to digital assets and underwrite risk similarly for borrowers, regardless of the country in which the borrower resides. As a result, there is an opportunity to extend low cost credit in markets where it previously was not available and grow access to a critical part of banking infrastructure that could expand global economic activity dramatically.
The inspiration for BlockFi comes from both the enormous market opportunity and social impact potential of cryptoassets. Similar to the founding stories of many other companies, the idea was sparked by a personal experience.
BlockFi’s Founder and CEO, Zac,was working with a bank in Texas to obtain a mortgage. He had taken out a loan with this bank before, and had started to invest in cryptoassets since his last application. In mid-2017, he prepared his second loan application and decided to include his Bitcoin and Ether holdings on his financial statement, figuring — why not?
The bank let Zac know that they had never heard of “Bitcoin” before and that the assets counted as nothing in terms of their view of his finances and assets.
As a matter of fact, they almost stopped working with him. Surprised, Zac asked, “Why?”
Because, when they did a google search on “the Bitcoin,” they determined that “Bitcoin is mainly used by money launderers and drug dealers.” Bitcoin was viewed by these bankers as a currency for nefarious activities — with no place in the traditional financial world and nothing like the status of fiat currency or other, traditional assets.
While this may be the view of banks today, BlockFi knows this is not our future. With a current market capitalization of over $300B, and fast growing mindshare among some of the world’s smartest financial and technical minds — the cryptoasset ecosystem is here to stay.
As cryptoassets have continued to grow in size and scale, so has the ecosystem of financial services to support them. This includes an increasing availability of leveraged trading options supported by a few exchanges, but there is no concept of debt or lending outside of this use case.
According to a Bank of America study from October in 2017, “If coins were taken as collateral by lenders, it would mark another big step forwards in mainstreaming the asset class. At present, we don’t think mainstream lenders will take coins as collateral, in the way they will with bonds, equities, arts and so on.”
Even the most established players in financial services acknowledge the need for a lending option in this ecosystem. But it needs to come from outside traditional sources.
At BlockFi, we’re building a diversified financial services business to meet the needs of cryptoasset market participants, and we’re starting with lending. Our first product is a USD denominated loan (read more here) enabling holders of Bitcoin and Ether to get dollars today, without selling their crypto.
Initially, we are launching our lending product to US citizens in select states. But, this is just the beginning.
BlockFi is positioned to be the leading global lender for cryptoasset owners — offering the best rates, most flexible structures, unsurpassed customer service and highest degree of security available in the industry.
In keeping with a tradition started by Tesla and followed by Coinbase, we want to share our Top Secret Master Plan:
- Become the leading USD lender in the cryptoasset market
- Use this traction to expand and offer low cost credit in global markets
- Diversify into other financial products based on the needs of our customer base.
In order to make this vision a reality, we’ve brought together a team of experts with experience across financial services and lending platforms. Get to know our team here.
BlockFi is also supported by leading investors from the cryptoasset, venture capital and fintech sectors including Consensys Ventures, Kenetic Capital, PJC, SoFi, Purple Arch Ventures and Lumenary.
With the team and investors behind BlockFi, as well as the tools and capital to pursue our vision, we’re excited to get started!
The BlockFi Team