Toronto-based GDA Group, a North American digital assets firm specializing in capital advisory and trading services to institutional investors, announced the launch of GDA Lending. The new service will provide investors with access to non-recourse lending for USD, BTC, ETH, EOS and XRP at up to 65% loan-to-value ratio.
GDA Lending joins the ranks of other crypto lending institutions such as BlockFi, Nexo and DrawBridge Lending (recently acquired by Galaxy), which offer collateralized lending to its clients.
Bitcoin golden physical coin illustration on Euro banknotes of 20 and 50 euros. visual … [+] representations of the digital Cryptocurrency Bitcoin with the Euro bill. Bitcoin is a popular digital currency that showed growth and is widely spread, accepted from banks, markets and other services and shops as ways of payments. The exchange rate today for 1 bitcoin blockchain is 9969 euros. Thessaloniki, Greece – August 8, 2020 (Photo by Nicolas Economou/NurPhoto via Getty Images)
“Institutional investors are becoming increasingly more knowledgeable about digital assets and the unique investment properties they add to a modern portfolio. We are looking forward to adding GDA Lending into the GDA Group’s existing portfolio of financial products to deliver safe and seamless digital asset exposure,” said James Godfrey, Advisor to GDA Group.
Crypto-lending services are booming in 2020, as Bitcoin investors are seeing an upward trend in the price of the digital asset and are holding onto their investment longer than before. In fact, 60% of Bitcoin has not moved wallets in over 12 months. These same investors are seeking liquidity from their portfolios and many are choosing collateralized lending as the solution. Lending services are also of particular interest to crypto-mining firms, who require additional liquidity for rising equipment costs.
Lending services in the digital asset space have seen their share of challenges, however. Just last month, crypto lender Cred filed for bankruptcy, disclosing fraud. Sources close to the firm say many of the issues stemmed from lack of collateral in the lending operation. Cautionary tales, such as Cred, highlight the need for strong counterparties and collateral practices in all lending and borrowing businesses.
Backed by a Tier-1 Security Lender, GDA Lending seeks to pave a more institutional-grade path for crypto-lending services. The firm offers borrowing of up to $100,000,000 and pays interest in USD, EURO, or CAD.
“GDA Group has been working tirelessly to create one of the industries most vertically integrated portfolios of structured digital asset products. Following this week’s announcement of the Global Fund Management division, our firm provides 360 degree coverage of all major facets of the digital asset sector,” said Zach Friedman, Chief Operating Officer at GDA Group.