Most of the Chinese cryptocurrency expenditure firms & funds are witnessing a massive lead. The latest development states that these firms have a steady and growing revenue. Bear market, on the other hand, helped these firms to achieve a great feat. According to the sources, some of the firms are DGroup by Dong Zhao, FBG Capital, and Bixi Capital.
These notable companies have made a name for themselves with their funding operation in China. Bixin Capital, DGroup And FBG Capital are holding the record to run the longest over-the-counter trading desk around China. By the looks of it, these investment firms made collaboration with a startup, Babelbank. And now the three investment firms are holding together a net worth of $60 million. The net worth of $60 million came into being in the last five months. According to the sources, either the net worth is in cryptocurrency denomination or Chinese yuan. Only one firm was able to earn in Chinese fiat currency.
The firms said that most of the net worth came from China itself, mainly from hedge fund traders and investors. The miners of the cryptocurrency also made contributions to the whopping net worth. The financial markets head of Bixin Capital; Xi Wang said that the personal cryptocurrency loans don’t undulate cryptocurrency market conditions. And this is where the bearish market helps to make profits. According to Wang, it is easier to make profits via bearish market as lending cryptocurrency is stable.
Bixin Capital came up with a leading crypto business back in November 2018. There was a lower level of activity on the investment side. And this made the customers borrow ether, Bitcoin, Litecoin, EOS, and Tether.
The firms need collateral to grant cryptocurrency loans
When loans come into play, the firms need to acquire at least one asset among five others, in the form of collateral. The firms then charge the lenders with seven percent in the form of rate of interest.
As of now, Bixin Capital alone was an exceptional loan volume of $10 million as USDT. Wang said that the firm is currently earning a steady level of interest in the form of Bitcoin, every month. On the other hand, FBG Capital’s founder said that the firm is neck-deep when it comes to crypto loans. But the firm did not come out with a leading real-time unit until the mid of 2018. And now in 2019, in the month the April, the firm has a cryptocurrency loan worth of $15 million.
Bixin began its venture as a cryptocurrency wallet, as well as, a mining pool service in the year 2014. And Bixin Capital came to life in the year 2017. Since 2017, Bixin Capital has taken an active part in most of the cryptocurrency projects with its capital. And Bixin Capital did not have any significant partners when it began.
Collateral of Conventional banks vs. Cryptocurrency lenders
There is a subtle difference between cryptocurrency lending and traditional bank loans. According to both Wang and Zhou, Crypto lending comes with strict enforcement or enforced liquidation.
On the other hand, they also demand collaterals to grant cryptocurrency loans. Judging by the facts, the traditional bank loans provide loans by keeping assets, properties as collateral. Hence, it is only natural that the cryptocurrency lending should have a minimal collateral requirement.