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Is The Crypto Surge Here To Stay?

After all the drops during November, Cryptocurrency has been climbing up the market exponentially recently and there are numerous speculations being made on how long this period will last.

A Hong Kong-based crypto finance institution, previously known as BabelBank, announced on Wednesday that the company experienced a good surge in demand for bitcoin-collateralized loans in China over the last few months. While market analysts remain sceptical, BabelFinance is convinced that it’s a “bullish” sign of good things to come.

BabelFinance offers financial services for crypto investors, crypto miners and crypto institutions. It provides loans in stablecoins, collateralized by deposits of Bitcoin (soon to include Ethereum, Litecoin, BCH, and other PoW coins, plus XRP or Stellar). Customers can also transfer their crypto assets to BabelFinance and generate interest through pledge loans.

In April, BabelFinance reportedly carried a balance of $27 million in outstanding loans. Two months later, and the company now says that balance has ballooned to more than $100 million—bringing its total to approximately $124 million in loans since first opening its doors in July 2018. In other words, more than 80 percent of all the bitcoin-backed loans that the company has moved in the last year have been executed in just the last 60 days.

According to the firm, it’s “Chinese speculators” who are driving up the demand. BabelFinance Founder and CEO Flex Yang said in a statement that they have seen a dramatic increase in speculative borrowing from consumers and institutions over the past few months and it is clear that anticipation for higher prices is building in China and other global regions.

The recent increase in speculative borrowing appears to coincide with a spike in the price of Bitcoin beginning in early April, so the idea that it’s being driven by crypto investors looking to get in while the getting’s good appears to jibe.

This shines a light to hopeful investors in the future of the cryptocurrency as an alternative investment object despite its risks and high volatility, the returns are may just be as high as the risks.

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About Umme Haani

Umme is an aspiring engineer who immensely enjoys writing and technical writing brings the best of both worlds under one roof for her.

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