Marc van der Chijs, a venture capitalist and crypto entrepreneur, was considering loan options for the purchase of a new home this past spring – one of the options on the table was taking out a loan entirely secured by his bitcoin holdings.
The Vancouver-based co-founder of First Block Capital said he eventually backed away from the idea because of the high interest rate attached to crypto-backed loans, but he was motivated to explore it initially because of the “terrible, messy, process” involved with getting a traditional mortgage.
“A lot of my holdings are in cryptocurrency, and it took me almost two months to get a mortgage,” he told The Globe and Mail. Mr. Van Der Chijs said the crypto-loan platform Anchorage Financing, based in San Francisco, was willing to give him a loan worth hundreds of thousands of dollars within 24 hours.
Venture capital interest in the flourishing cryptocurrency market has spawned a cottage industry of crypto-lenders – companies that let clients borrow funds in cash against crypto assets the lender holds on the borrower’s behalf as collateral.