Swan Expands Offerings with Bitcoin-Backed Lending Amid Industry Turbulence
In the midst of a challenging year for the Bitcoin and crypto industry, Swan has emerged as a company that continues to invest in the sector. Despite setbacks faced by prominent figures like Sam Bankman-Fried and Changpeng Zhao, Bitcoin has experienced significant growth and ended the year on a high note.
A recent report from Fortune Magazine highlights Swan’s investments and suggests that they could yield positive results as the market becomes more bullish.
Swan’s Expansion into Institutional Services
Swan, a financial firm focused on Bitcoin, has announced its expansion into institutional services such as Bitcoin-backed lending. The company also successfully raised $40 million in funding in 2023.
Founded in 2019 by Cory Klippsten, Swan initially started as a platform for Bitcoin investments, offering core services like buying, selling, and custody of cryptocurrencies.
Klippsten, who has been critical of certain crypto practices, has consistently emphasized the importance of Bitcoin and warned against risky strategies like rehypothecation. The report notes that his stance has been reinforced by the failures of companies such as FTX, BlockFi, Celsius, and Genesis.
In an exclusive interview with Fortune, Klippsten stated that Swan’s strong performance during the crypto crash paved the way for their expansion into institutional offerings. According to Klippsten:
“We believed that despite the capital destruction and scandals in the crypto industry, there was still a global demand for these services with limited providers available. Our reputation and brand have built trust.”
Challenges Faced by Swan
Swan’s journey hasn’t been without difficulties. Initially partnering with Prime Trust for custody services, the company faced challenges when Prime Trust declared bankruptcy.
The subsequent partnership with Fortress also encountered hurdles, including a hacking incident and a failed Ripple acquisition. Swan’s current collaboration with BitGo aims to establish the first U.S. Bitcoin-only trust company, with plans for a launch in 2024.
Swan Navigates Crypto Challenges and Aims for Growth
As Swan enters the crypto lending space, it aims to differentiate itself from failed models like Celsius and Genesis. Klippsten emphasizes their commitment to not rehypothecating customer assets and focusing solely on Bitcoin-backed loans.
The lending service is set to launch soon, allowing users to deposit Bitcoin and receive dollar-denominated loans at competitive rates.
In 2023, Swan raised approximately $165 million through fundraising efforts focused on strengthening the Bitcoin ecosystem. Klippsten envisions raising an additional $150 million in 2024 to fuel further expansion.
With a projected revenue of $200 million in early 2024, Swan is rapidly expanding its revenue streams by offering advisor services and asset management for institutional investors. This marks a significant development in the Bitcoin-focused financial landscape.
Hot Take: Swan’s Resilience and Growth Potential in the Crypto Market
Despite the challenges faced by the crypto industry, Swan has demonstrated resilience and continues to invest in the market. With its expansion into institutional services and plans for a Bitcoin-backed lending platform, Swan is positioning itself for growth.
By prioritizing trust and avoiding risky practices, Swan aims to differentiate itself from other companies that have faced setbacks. With its strong performance during the crypto crash and a focus on the Bitcoin ecosystem, Swan has the potential to thrive as the market turns bullish.
Sources: Fortune Magazine
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