Tokenet, a new cryptocurrency lending platform from Digital Prime Technologies, was introduced by a group of former executives from Cantor Fitzgerald.
In the event that US regulators approve them, this platform is meant to meet the expected demand from operators of spot Bitcoin ETFs (exchange-traded funds).
Rebirth of Crypto Lending Before Approval of Bitcoin ETF
It was stated by Digital Prime Technologies that their service, Tokenet, allows users to lend out cryptocurrency, including Xapo Bank. Prominent customers including Hidden Road Partners and EDX Clearing are among the first to use this service.
The platform has a number of features that improve loan administration and monitoring, such as chat capabilities and risk management tools.
“Tokenet’s debut is a crucial and exciting step towards building trust and transparency in digital asset lending, especially in light of the present legislative challenges and market conditions. According to James Runnels, CEO of Digital Prime Technologies, “this platform redefines digital asset lending and embraces the regulatory safeguards of traditional finance.”
This launch comes at a perfect moment. In fact, it closes the hole left by the demise of a number of well-known cryptocurrency lenders including BlockFi, Celsius, and Genesis last year.
The failure of these lenders had a big effect on the cryptocurrency industry, resulting in lower trading volumes and a lack of trustworthy loan sources. The market debut of Digital Prime is a critical step in reviving the cryptocurrency lending industry.
Runnels underlined, “It’s almost like a rebirth of crypto lending,” and he illustrated a hypothetical situation in which approved participants in an ETF would decide to borrow Bitcoin rather than buy it right away amid price spikes in order to acquire it later at a discount.
The importance of Digital Prime’s debut is further enhanced by the mounting expectation of a US spot Bitcoin ETF license. Furthermore, industry insiders predict that this clearance might happen in a matter of months, which would lead to a strong demand for borrowing Bitcoin.
“We anticipate the SEC’s approval by late 2023 or early 2024, and we believe that US-regulated ETFs will mark a turning point in the cryptocurrency industry. We predict that after the halving, at its height, miner sales will be outnumbered by the demand for Bitcoin via ETFs. By 2028, we anticipate that Bitcoin ETFs will represent 9–10% of all Bitcoin in circulation, according to Gautam Chhugani, Senior Analyst for Global Digital at Bernstein.”
This demand is anticipated to provide a fresh opportunity for investment and expansion for the nascent crypto-lending sector.
