CoinShares CEO Says Bitcoin is Penetrating the Trillion Dollar Consumer Credit Lending Business
Meltem Demirors, a mathematical graduate from the prestigious Rice University and chief strategist at Coinshare believes that the trillion dollar consumer credit businesses are branching out towards the crypto space.
In her recent twitter thread, Demirors noted that the crypto focused credit business is on the verge of breaking out on a massive scale. The chief strategist noted that “US consumers hold $4 trillion in mortgages, student loans, auto loans, credit card debt, and more.” Shifting from the traditional fiat based asset lending towards the decentralized crypto credit services can see a world of good for the business.
The crypto-based lending businesses are already gaining the momentum and some of the noted names in the current market include BTCjam, a globally accessible peer-to-peer Bitcoin lending platform, and RipioApp, another crypto-focused lender.
2018 Was The Breakthrough Year For Crypto Credit Products
Demirors believe that 2018 was a milestone year for crypto lending firms as well as various crypto credit products. The importance and acceptance of cryptocurrencies have led to the formation of many crypto-based lenders where users can benefit from their digital asset without having to sell them. BlockFi is emerging as one of the leaders among the crypto-based lending services in recent times.
BlockFi offers products and services similar to that of LendingClub, one of the most established credit-based online market place in America. BlockFi uses bitcoin as the collateral instead of fiat based assets.
Demirors explains that in a peer-to-peer decentralized crypto lending business, the buyer and seller interact directly instead of a middleman taking a cut to stake the crypto asset. The P2P lending can help in removing the middlemen and all the benefits are shared by the two parties involved in the credit business.
Meltem believes the early investors who reaped the riches of 2017 high could play a major role in expanding the crypto credit business and take it to new heights. These investors can leverage a portion of their digital asset and use the credit to expand their crypto portfolio by investing in other altcoins, so its a win-win situation for all.
Trustless Bitcoin Lending Can Attract Major Investors
The current Bitcoin lending market needs financialization to expand but the Bitcoin protocol hasn’t been designed in a way that its easy for an effective crypto lending Caitlin Long, a 22-year Wall Street veteran who has now shifted her focus towards the crypto space and blockchain industry has recently penned down in detail how the current crypto market is not “trustless” to allow for formalizing crypto credit business.
“Major fiduciary institutional investors” will only make substantial investments in cryptos if digital asset markets are developed in a trustless manner – which would allow businesses to “borrow money to finance investment in … enterprises,”
Crypto lending sector can see a major break out in coming years given the next bull run is around the corner. The bullish crypto investors might play a pivotal role in expanding the crypto lending sector to new highs as they have the resources and the funds to do so. Many analysts and investors see great potential in the lending sector as it is already a proven business idea among the fiat-based asset classes.
The decentralized peer-to-peer crypto credit business has a better chance at succeeding as the blockchain provides many technically aided tools like smart contracts to avoid issues which have been a major problem in the fiat-based lending services.