Why TradFi firms could turn to bitcoin margin loans: Maple CEO
Maple’s Sid Powell said that TradFi firms have been in contact with the firm about lending and borrowing in crypto
bitz100/Shutterstock modified by Blockworks
This is a segment from the Empire newsletter. To read full editions, subscribe.
We’ve been talking a lot about institutions and their interest in crypto now that the environment is more crypto-friendly.
Or, perhaps we should say more crypto-tolerant based on Fed chair Jerome Powell’s tone shift. He acknowledged yesterday that banks can serve crypto customers so long as risks are managed.
Anyway, there’s another angle I wanted to dig into after Powell’s press conference and Trump Media’s announcement that it’ll potentially put money to work in crypto.
Maple CEO Sid Powell told me that one potential area for institutional entry is lending. He says he’s receiving a lot of calls from TradFi firms exploring the possibility.
“I think the reason lending and borrowing works for them is that private credit is one of the fastest growing sectors in TradFi. It’s worth over one and a half trillion dollars and … they understand loans and borrowing as products, so it’s less of a leap” for them to enter crypto, Powell explained.
It’s likely we see more activity in the bitcoin margin loan space given the contraction that happened after so many lenders failed, and the familiarity that TradFi firms have with the space.
The market is “very liquid” and therefore “very manageable from a risk perspective.”
“We’ve also spoken with a couple of alternative credit shops … bigger names from traditional finance, who’ve also expressed interest in the sector,” Powell continued.
“I think that’ll be one of the first places they start for those reasons: bitcoin is a very large asset that you can use as collateral. It’s very liquid, and it’s very similar to traditional equities margin lending.”
Just like the TruthFi announcement yesterday, interest is great. But we need to see money at work before we get really bullish.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
