A new crypto-lending platform dubbed Tokenet said it would service what it expects to be an influx of institutional clients following the potential United States approval of a spot Bitcoin (BTC) exchange-traded fund (ETF).
The platform was launched by a team of executives who previously headed the financial services firm Cantor Fitzgerald and have since joined a new brokerage firm called Digital Prime Technologies.
In a Nov. 7 statement, Tokenet said it would allow firms to borrow and lend digital assets while managing collateral positions. The platform also offers risk management tools that allow institutions to mitigate counterparty risks as they would in traditional finance.
Digital Prime Technologies’ Tokenet platform is already backed by a number of crypto firms, including Hidden Road Partners, Xapo Bank, EDX Clearing and DV Chain.
“Given the current markets and regulatory headwinds, Tokenet’s launch is an important and exciting step towards establishing trust and transparency in digital asset lending,” said James Runnels, Digital Prime Technologies co-founder and CEO.
Tokenet joins a growing roster of companies seeking to embrace crypto lending following the collapse of lenders such as Voyager Digital, Celsius Network and BlockFi.
In a bid to bolster declining revenues, crypto exchange giants, including Coinbase and Binance, have leaned heavily on lending offerings, all the while assuring investors that they’ve learned from the mistakes of the crypto lending disaster of 2022, which bankrupted a number of high-profile firms.
Tokenet’s launch is buoyed by the wider crypto market’s enthusiasm for an impending approval of a spot Bitcoin ETF. While an approval is not guaranteed, Bloomberg ETF analysts have pegged the likelihood of an approval at 90% before January next year.
I've gotten a lot of questions regarding my current view on Spot #Bitcoin ETFs over the last couple weeks. This is the first section of the note I put out yesterday with @EricBalchunas.— James Seyffart (@JSeyff) October 13, 2023
TLDR: Our view hasn't changed much https://t.co/dRAm5IsdQf pic.twitter.com/Htsi3n2XxV
If a spot Bitcoin ETF is approved, crypto lending firms such as Tokenet stand to gain from the influx of institutions looking to borrow Bitcoin.
Runnels was previously the managing director at Cantor Fitzgerald, while the chief operating officer of Digital Prime Technologies, Bob Sherry, was previously the COO of Prime Services at Cantor until 2018.