Twenty One Capital May Explore US Dollar Loans Using Bitcoin as Collateral
Main Idea
Twenty One Capital is exploring the issuance of US dollar loans backed by Bitcoin collateral, leveraging its significant BTC holdings to innovate in the crypto lending space.
Key Points
1. Twenty One Capital, supported by Cantor Fitzgerald and Tether, holds over 43,500 BTC (~$5.13B) and plans to issue US dollar loans secured by Bitcoin.
2. Bitcoin-backed loans allow firms to unlock liquidity without selling assets, blending decentralized assets with traditional finance.
3. Crypto lending is growing, with firms like Divine Research issuing 30,000 unbacked USDC loans and DeFi lending reaching $70 billion locked last quarter.
4. Major financial institutions like JPMorgan Chase are reportedly exploring crypto-backed lending, indicating broader adoption in traditional finance.
5. Risks include Bitcoin's price volatility and potential liquidation, requiring careful risk management by borrowers.
Description
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