Blockfi logo
Navigation Bars
Adventure3
The Future of Crypto

Lifting the Veil on the BTC Lending Market

Published, 18 June, 2019

Share article
Twitter Share LinkFaceBook Share LinkLinkedIn Share LinkTelegram Share Link
Adventure3
2019 has been the year of #stackingsats. From earning cash-back to earning interest in a BlockFi Interest Account (BIA), crypto investors have more options than ever to start earning more crypto. In May we discussed the main points about how the crypto lending market works. In May we saw that CME Bitcoin Futures Volume hit its highest point since 2017. In fact, CoinDesk reported that nearly 300,000 contracts were traded in the 31-day period at an average daily volume (ADV) of more than 13,600 contracts equal to $515 Million in notional value.
5460
Credit: CoinDesk
The futures market is a great indicator for the health of the crypto lending market. As we’ve outlined previously, BlockFi lends crypto out to institutions in order to generate a yield for BIA customers. We’ve found that the BTC lending market is by far the most active and most liquid.
With that in mind, we wanted to continue providing insights for our community about the types of companies participating in the crypto lending market. These roughly breakdown as 70% Market Makers, 25% Funds, and 5% Exchanges.
Some of the products and companies enabled by borrowing crypto are as follows:
  • Spot & Derivatives (Futures, Perpetuals, Options)
  • Derivatives (OKEX, BitMex, CME)
  • Quanto Swaps (BitMex, OKEX)
  • Arbitrage
  • Margin Lending (Exchanges)
When we lay this out for our customers we often get asked why a company like an exchange needs to borrow crypto. The main reason is that it allows exchanges to maximize its ability to provide a liquid marketplace, making it easier to execute trades quickly and efficiently. When you look at the CBOE (currently the second largest U.S. equities market operator in the world), they facilitate an average volume of 1,001,716,592 trades per day over the four exchanges they operate. In order to ensure smooth transactions for both parties of a trade, exchanges need to have enough liquid inventory on-hand. Lending companies like BlockFi bolster markets by creating additional liquidity.
If you are a business or institution looking to borrow crypto, BlockFi wants to hear from you. Please visit https://blockfi.com/institutions and reach out to our team at [email protected] to set up and introduction with our team.
– The BlockFi Team
Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Crypto assets are deposited into an account with Gemini or BitGo, our primary custodians and licensed depository trusts. For more information, please see BlockFi’s Terms of Service__.

Last updated on February 3rd, 2021

Share article
Twitter Share LinkFaceBook Share LinkLinkedIn Share LinkTelegram Share Link

Related Post

cover-future-crypto
The Future of Crypto

The Future of Crypto is Simplicity

September 5, 2018

cover-next-stage-crypto
The Future of Crypto

The Next Stage of Crypto: Source of Value

September 20, 2018

cryptoassets
The Future of Crypto

Cryptoassets: Top 5 Things to Know

November 5, 2019

Baby_Boomers_BlockFi
The Future of Crypto

BlockFi’s Boomers Say “OK” to Bitcoin

April 30, 2020

IMAGE_graduationgift
The Future of Crypto

Make Crypto Your Graduation Gift

August 10, 2020

IMAGE_genz_post
The Future of Crypto

How Gen Z Budgets with BTC

August 27, 2020

IMAGE2_The Perils of Terminal Deflation 1180×640
The Future of Crypto

The Perils of Terminal Deflation

October 8, 2020

IMAGE_Crypto Built That 1180×640 copy
The Future of Crypto

Crypto Built That

October 22, 2020

App Store logo
Google Play logo
twitterlinkedinfacebookyoutubetelegram
Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
2021 © All Rights Reserved.
ProductsArrow Pointing Down
InstitutionsArrow Pointing Down
ServicesArrow Pointing Down
ResourcesArrow Pointing Down
CompanyArrow Pointing Down
Follow usArrow Pointing Down
Apple Store logo
Google Play logo
twitterlinkedinfacebookyoutubetelegram
Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
2021 © All Rights Reserved.