The rising valuation of Bitcoin witnessed the growth of several sectors involved with the digital asset. The crypto lending market has exhibited extraordinary growth as institutions-focused Genesis registered a 245% growth in their outstanding loans in 2020.
While the BTC lending market is young, its swift adoption has created a billion-dollar industry, which is one of the benchmarks of development for the current Bitcoin ecosystem.
Total Bitcoin collateral grew by 1170%
According to Arcane Research’s recent Banking on Bitcoin report, the total active collateral in the BTC lending market has increased to ~$25 billion from $2 billion in 12 months. It was estimated that the number of Bitcoin used for collateral at the moment is around 420,000 BTC, however, this estimation is based on a modest evaluation that only 50% of the active loans are backed by Bitcoin collateral, whereas various industry experts believe it could be close to 70-80%.
While there are various Bitcoin lending companies in the current market, the impact of the institutional lending organization such as BlockFI and Genesis have been vital.
As mentioned earlier, Genesis’ active loans outstanding improved from $649 million in Q1 2020 to a whopping $3,821 million in Q4 2020. From Q3 to Q4, the growth was roughly 80%.
BlockFi registered similar impressive numbers, with