Bitcoin Borrowing & Lending Markets with Zac Prince

 
 
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“If bitcoin gapped up 50% tomorrow with no liquidity in between BlockFi would be fine. We would be better than fine, we would be popping champagne alongside everyone else.”
— Zac Prince

SHOW DESCRIPTION

Location: Remotely
Date: Tuesday 16th March
Company: BlockFi
Role: CEO

BlockFi is a platform that brings financial services to bitcoin, and with their platform, you can earn interest on bitcoin deposits and take out collateralised loans.

While BlockFi has operated successfully in the space for several years and survived market challenges, such as the March 2020 crash, Bitcoiners often criticise their business model. 

“Not your keys, not your coins” is an important message regarding bitcoin, and some view custodial lending platforms as antithetical to this, questioning whether 6% interest per year is worth the risk on an asset that, on average, appreciates 200% a year.

While it is a personal choice, there is also a subset of bitcoiners that spread misinformation and unsubstantiated claims against BlockFi and other lending platforms.

To address the risk-reward of BlockFi and answer some of the questions & misconceptions, I talk to BlockFi CEO Zac Prince. We discuss building the present and future of Bitcoin capital markets, the demand for crypto-liquidity and BlockFi’s solutions to the challenges of managing risk in this growing financial frontier.

TIMESTAMPS

00:05:49: Introductions
00:07:57: What makes BlockFi so divisive
00:13:39: What does BlockFi do…
00:14:16: …BlockFi interest account
00:19:16: …Bitcoin rewards credit card
00:20:25: …institutional-facing products
00:22:08: …competing with traditional Fintech and banking
00:24:58: Institutional borrowing for market makers
00:31:05: Risk management
00:36:37: Proprietary trading and arbitrage
00:45:58: Shorting
00:47:16: Crypto-native businesses
00:53:46: Collateralising loans
00:56:46: Systemic risk within traditional banking
01:02:24: Mudslinging from competitors
01:07:22: Gap risk
01:14:19: Commingling
01:16:27: Altcoins and others…
01:18:36: The demand to borrow Bitcoin
01:21:14: UK customers borrowing against their Bitcoin
01:22:34: The BlockFi bank account
01:27:12: Insurance services
01:29:38: Final comments

 

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SHOW NOTES

PodcastPeter McCormack