Crypto rich but low on cash?
With all the ICOs that have taken place (not to mention the meteoric rise in the value of crypto assets late last year), there are a lot of entrepreneurs who fit this description, but few products that allow them to turn long-term HODLing into actionable capital.
That’s the idea behind a new subsidiary being started by Dominion Capital, a family office based in New York City. While the company has long invested in a variety of assets, Dominion’s known for helping to finance projects by backing loans.
As it turns out, Dominion has also been quietly involved in crypto for years, and the firm believes now is the time to prove the worth of the nascent asset class by expanding its services into the sector.
“Community is a huge part of this movement,” CEO Mikhail Gurevich told CoinDesk. “One of the tests of whether assets are legitimate is if people are willing to lend against them.”
For the entrepreneurs who are willing to bet on the strength of their holdings, there’s a strategic opportunity at play. Essentially, the service would allow individuals and projects to borrow against either their own crypto assets (or those invested by supporters) rather than converting them directly to cash.
As such, Gurevitch expects the idea could even draw some of the largest ICOs, many of which have raised millions in assets that are hard to liquidate.
Gurevitch told CoinDesk:
“We had a number of companies come to us who had raised an ICO to borrow with crypto as collateral. [There’s] $1 billion-worth of demand out there.”
Dominion, Gurevitch said, will likely only offer loans against bitcoin at first, with the intention to expand into other currencies as it finds product-market fit.
In turn, Dominion’s new company will take custody of the collateral for the life of the loan.
Still, it’s worth noting that lending against bitcoin isn’t exactly a new idea, and early movers in crypto lending didn’t