Popular cryptocurrency lending service BlockFi is looking to build on a stellar 2020 and expand its operations this year. Moving out of its primary lending service, the company is now filing to become an investment and asset management outfit.
Another Institutional Product
The crypto lending company filed an application with the United States Securities and Exchange Commission (SEC) to launch a Bitcoin investment trust. Although the details are scant, the product could see BlockFi step into the institutional investment space if the SEC greenlights it.
BlockFi wants to take advantage of the influx of institutional investors in the crypto space since last year. Speaking at a conference earlier this month, David Olsson, BlockFi’s vice-president for Europe and Asia, explained that the industry could very well see more institutions rush into digital assets this year.
Olsson explained at the time that institutions would primarily consider liquidity when choosing assets, adding that some altcoins that have risen in value recently could draw attention.
Considering that Bitcoin remains the most liquid cryptocurrency, it would only make sense that BlockFi will want to focus on the leading cryptocurrency first. However, it is also entering a crowded field, with firms ranging from Grayscale Investments and Bakkt to Bitwise Asset Management and Galaxy Digital providing investment products for investors – particularly, institutions. Grayscale, in particular, has become the gold standard for bitcoin trusts. And it continues to attract significant institutional cash.
BlockFi’s Year of Growth
The news is coming on the back of BlockFi’s strong performance in 2020, which saw the company generate almost $100 million in revenues. This week, Ryan Rod, a researcher at The Block, published a dive into the company’s finances, reporting that it had crossed the $8 billion mark in total client balances – a number that is over thirty times greater than what it had as of Q4 2019.
Funded accounts on BlockFi also amounted to 125,000, a 1,250 percent increase since Q4 2019.
Along with its ambitions of becoming an investment firm, BlockFi also announced a partnership with VISA last month to develop a new credit card with Bitcoin rewards. Per a Bloomberg report, the credit card will reward purchases with Bitcoin instead of conventional options like cashback and airline mile.
The card will carry a $200 annual maintenance fee and will be issued by Evolve Bank & Trust. Cardholders will be able to get 1.5 percent of their purchases – all paid in Bitcoin.