Home tech news BlockFi is Rolling in the Dough with Fresh Funding Round

BlockFi is Rolling in the Dough with Fresh Funding Round

by Alan Daniel

BlockFi appeared on the crypto scene in what seems like yesterday. The crypto lending firm was founded in 2017 and backed by institutions such as Galaxy Digital Holdings, among other cryptocurrency-focused firms.

Led by Zak Prince, it has recently raised $30M to continue to accept bitcoin, and ethereum deposits and roll out new features to become an integral part of the cryptocurrency ecosystem.

This recent blockfi funding amount brings their total raise to $108.7 million, according to Crunchbase.

It is a great time to raise too.

We’re still far away from the previous cryptocurrency highs. We’re seeing a gradual rebound in the cryptocurrency sector. At the time of this writing, bitcoin, ethereum, and a few altcoins are witnessing bullish upticks.

What does the lending institution BlockFi do?

The firm takes on some roles that are akin to a bank. It takes your bitcoin and ethereum, lends out the asset and pays you interest on your  cryptocurrency deposits. Further, you can borrow against your assets and obtain a certain USD value for your cryptoassets.

Why is this recent raise compelling?

The recent BlockFi news is exciting because it shows that these investment firms continue to buy into the BlockFi narrative. It indicates a level of trust and confidence in the firm to continue to build up a retail and institutional userbase and raise its transaction volume.

Indeed it also shows further promise for the cryptocurrency sector. BlockFi should use this money to create additional products and look to markets such as Singapore to service crypto-asset lending.

Reports from Coindesk and others indicate that Blockfi intends to increase convenience by creating a mobile application and improving its money transfer capabilities. It will also invest in human capital in a time when other organizations such as Galaxy Digital Holdings and Consensys are downsizing.

Heavy hitters such as Valar Ventures, a Peter Thiel entity, led the recent round, reaffirming a rising interest in the cryptocurrency sector. Prior investors such as Morgan Creek Digital, and Winklevoss Capital are also backing this latest round.

While other cryptocurrency firms might be looking for ways to justify their existence, BlockFi, is one with a simple business model that continues to see investor interest.

It makes sense too, according to Ryan Todd, a research analyst at The Block, BlockFi is one firm that’s performing quite well.

Revenues and deposits continue to grow, and its valuation jumps accordingly. Further, products such as a bitcoin rewards credit card are something that should be of interest to a wide variety of cryptocurrency enthusiasts.

 

Risks Abound

Of course, we do have to point out that when you deposit your bitcoin with organizations such as Blockfi, you’re trusting their processes and systems.

You trust BlockFi and third party custodians to keep your crypto safe.

Further, interest accounts do not enjoy FDIC or SIPC protections at the present moment.

Those who deposit with BlockFi should make sure to understand their risks before placing their bitcoin deposit.

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