A New Crypto Lending Platform is Launched by Former Cantor Fitzgerald Executives
A group of former Cantor Fitzgerald executives has launched Digital Prime Technologies’ Tokenet, a new crypto lending platform. This platform is designed to cater to the anticipated demand from operators of spot Bitcoin ETFs (exchange-traded funds), pending their approval by United States regulators.
Crypto Lending Rebirth Ahead of Bitcoin ETF Approval
Digital Prime Technologies announced that its service, Tokenet, enables clients, including Xapo Bank, to lend out crypto. Key clients such as EDX Clearing and Hidden Road Partners are among the early adopters of this service. The platform boasts various features, including risk management tools and chat functionality, enhancing the management and oversight of loans.
“Given the current markets and regulatory headwinds, Tokenet’s launch is an important and exciting step towards establishing trust and transparency in digital asset lending. This platform redefines digital asset lending and embraces the regulatory safeguards of traditional finance,” James Runnels, CEO of Digital Prime Technologies, said
This launch fills the gap left by the collapse of several prominent crypto lenders like Genesis, Celsius, and BlockFi last year. The demise of these lenders significantly impacted the crypto market, leading to reduced trading volumes and a scarcity of reliable lending options. Digital Prime’s entry into the market is a vital step towards revitalizing the crypto lending sector.
Runnels emphasized that it’s almost like a rebirth of crypto lending. He highlighted a potential scenario where authorized participants in an ETF might choose to borrow Bitcoin instead of purchasing it immediately during price surges, aiming to buy later at a lower price.
The Significance of Digital Prime’s Launch
The growing anticipation of a spot Bitcoin ETF approval in the US amplifies the significance of Digital Prime’s launch. Moreover, Industry experts believe such an approval could occur within months, potentially creating a robust demand for Bitcoin borrowing.
“We expect US regulated ETFs to be the watershed moment for crypto and we expect a SEC approval by late 2023/Q1, 2024. Post halving, we expect the Bitcoin spot demand via ETFs to outstrip miner selling by 6-7 times at peak. We expect Bitcoin ETFs to be equivalent to 9-10% of spot Bitcoin in circulation by 2028,” Gautam Chhugani, Global Digital Senior Analyst at Bernstein, said.
This demand is expected to jump-start the fledgling crypto-lending industry, offering a new avenue for growth and investment.
Hot Take: The Future of Crypto Lending Post-Bitcoin ETF Approval
The launch of Tokenet by Digital Prime Technologies is expected to revolutionize the crypto lending sector as it prepares for potential spot Bitcoin ETF approval in the US. With growing anticipation for regulatory approval and increased demand for borrowing Bitcoin through ETFs, this move marks an essential step toward revitalizing and reshaping the industry’s future post-approval.
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