Crypto Assets lending revives, Cantor Fitzgerald launches $2 billion fund.

The encryption lending industry is recovering after being nearly destroyed in the last Bear Market, with new creditors providing funding and facilitating market activity. According to a report by Bloomberg, several major players, including Cantor Fitzgerald, Blockstream Corp, and Xapo Bank, have launched or secured investments in encryption lending funds and businesses this month.

Cryptocurrency lending revival, Cantor Fitzgerald launches $2 billion fund.

Cryptocurrency lending has always been a critical source of liquidity for the cryptocurrency market. Due to regulatory uncertainty in the industry, banks have been reluctant to provide funding to market participants. This gap led to explosive growth of cryptocurrency lending institutions during the 2021 Bear Market, with companies like Genesis and BlockFi providing the much-needed capital to cryptocurrency funds and other borrowers within the industry in an ultra-low interest rate macroeconomic environment before the industry's collapse.

But the last Bear Market nearly destroyed the entire encryption lending industry. Now, it is staging a massive comeback.

The financial services company Cantor Fitzgerald, led by U.S. Secretary of Commerce Howard Lutnick (, launched its global Bitcoin financing business this month with an initial capital of $2 billion. Meanwhile, the Bitcoin software company Blockstream Corp. has secured billions of dollars in investment for its encryption lending fund. The encryption wealth management company Xapo Bank has begun offering Bitcoin-backed loans of up to $1 million.

David Mercer, CEO of institutional trading platform LMAX Group, stated: "The nature of new lending institutions will be more institutionalized. More banks will enter this space and provide credit mechanisms to trade these assets for some of the largest institutions you can think of."

Return to lending in a more conservative manner

Bitcoin-backed loans have long been one of the most common options for cryptocurrency companies to obtain cash and increase short-term liquidity. However, given the high volatility of cryptocurrencies when used as collateral, traditional financial institutions such as banks remain cautious about this.

Adam Sporn, the Head of Institutional Sales at BitGo, stated: "Currently, most of the demand for lending digital assets is in cash. This is a limiting factor, as no large banks are lending to this sector."

However, due to U.S. President Trump's support for policies and regulations favorable to the industry, cryptocurrency lending is expected to further develop, with more traditional institutions now willing to participate. This could lead to Bitcoin-backed loans receiving support from traditional financial institutions with larger balance sheets and more complex risk management mechanisms.

So far, cryptocurrency lending has returned in a more conservative manner, with lower loan values, which means borrowers need to collateralize more encryption to reduce loan risks. Despite the growing demand for such services, coupled with friendlier management towards encryption, credit risk remains a key challenge for this emerging asset class known for its high volatility.

This article discusses the revival of cryptocurrency lending, with Cantor Fitzgerald launching $2 billion, first appearing in Chain News ABMedia.