Bitcoin-Backed Loans In Tradfi
Investment bank Goldman Sachs has the introduction of Bitcoin-backed loans. In what is a first for a major U.S. bank, Goldman Sachs has expanded its crypto offerings to include these bitcoin-backed loans. It is the first secured lending facility of its kind which will lend out cash that is collateralized by BTC.
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A move like this will see not only Wall Street embrace the cryptocurrency faster but other factions of the traditional finance will begin to move in this direction.
BTC succumbs to bears | Source:Goldman Sachs has no doubt evolved in its view of bitcoin over time. Less than two years ago, the bank did not believe that the cryptocurrency was an asset class. Since then, it has not only recognized it as an asset class but has been offering its clients a way to trade the cryptocurrency. It also boasts a crypto research team that publishes reports on the crypto market. Over the months, these reports have been mostly bullish toward digital assets such as Bitcoin and Ethereum.
Crypto Collaterals
Although this is the first for a major bank to accept bitcoin as collateral for a loan, it is in no way a novel concept. The rise of the decentralized finance (DeFi) space has seen users being able to borrow against their crypto holdings for a long time. There are DeFi protocols dedicated to this in the space.Related Reading | Bitcoin Briefly Tops $40,000 As More Countries Adopt Crypto
Featured image from Bitcoin Lending, chart from TradingView.com