Crypto Lender BlockFi Launches Institutional Investor Platform

Cryptocurrency financial services provider BlockFi Inc. is launching a bundled financing and trading platform for institutional and high-net-worth clients.

BlockFi Prime, as it’s known, is the latest in a suite of products from the Jersey City, New Jersey-based firm, which also offers digital-asset borrowing, among other things. The new service, which will be available to clients including asset managers, family offices, hedge funds, private equity firms and corporate entities, will feature real-time quotes and 24-hour delayed settlement. The company also expects to soon offer capabilities for margin trading and automated margin lending, as well as derivatives.

“Our clients were asking us for this and the reason that they’re asking is because we have essentially the largest balance sheet among the new breed of digital-finance firms and we can provide our clients the best experience,” David Olsson, the company’s global head of institutional distribution, said by phone. “Over the last three to six months, we’ve seen interest in prime services for cryptocurrencies surging in the hunt for alpha.”

Institutional investors have taken a greater interest than ever before into the crypto markets, with many entering the space amid a boom in prices last year. In that environment, many crypto firms stepped up their offerings for institutional and other professional investors looking to wade in in a regulated way. The cryptocurrency exchange Coinbase Global Inc., which went public this year via a direct listing, last month said it will expand its offering of prime brokerage services for institutional customers with a unit that ties together custody, trading, data analytics and other amenities.

BlockFi has gone from around 30 institutional clients to “a couple hundred that are active,” said Olsson. A year ago, those clients may have been proprietary trading firms, which trade using their own capital. Today, alternative asset managers are also a large client base for the firm.

Whereas other companies might require clients to pre-fund assets in order to trade, with BlockFi, they’ll be able to settle post-trade, said Olsson, which could be a useful feature for a market that moves around the clock -- including on weekends.

“The way that we’ve set up the business from day one, more than any other of the new digital fintechs out there, we were built to serve institutions, so it’s just been a natural extension to be able to do this -- it hasn’t been like a quantum leap for us,” Olsson said of the new service. BlockFi has been onboarding more “household-name alternative asset managers” this month than at any point in the company’s history and the “trajectory is exponential,” he said. “We’ve got a lot more on the road-map that’s really exciting.”

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