Now that crypto is becoming more popular, we’ve talked a lot of institutions.
We could also say that the Fed’s Jerome Powell has changed his tone. He admitted yesterday that banks could serve customers who use cryptos as long risks were managed.
There’s one more angle that I’d like to explore after Powell’s news conference, and Trump Media’s recent announcement to put its money into crypto.
Sid Powell, Maple’s CEO, told me lending is a potential entry point for institutions. He claims he is receiving many calls from TradFi businesses exploring this possibility.
“I think the reason lending and borrowing works for them is that private credit is one of the fastest growing sectors in TradFi. It’s worth over one and a half trillion dollars and … they understand loans and borrowing as products, so it’s less of a leap” Powell explained to them that it is important for cryptography.
TradFi’s familiarity with this space and the fact that so many lenders have failed has likely led to more bitcoin margin lending.
The market is “very liquid” Then, “very manageable from a risk perspective.”
“We’ve also spoken with a couple of alternative credit shops … bigger names from traditional finance, who’ve also expressed interest in the sector,” Powell continues.
“I think that’ll be one of the first places they start for those reasons: bitcoin is a very large asset that you can use as collateral. It’s very liquid, and it’s very similar to traditional equities margin lending.”
The interest rate is very high. Before we can get too bullish, we must see the money in action.
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