• bitcoinBitcoin$18,812.02-6.31%
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  • elrond-erd-2Elrond$46.06-3.47%

Singapore’s Diginex Will Offer USD Loans With Bitcoin as Collateral, Asian Market Remains Hot

Bitcoin has enjoyed quite a trip since March 2020, growing 10x in value up to this moment. It also started 2021 on a positive note, and even with the recent correction, the cryptocurrency remains 51% up year-to-date. Furthermore, the Bitcoin/Equity correlation has also been on the rise over the previous year.

This is because a growing number of companies have decided to embrace Bitcoin and are willing to offer dollar loans with Bitcoin as collateral. The most recent name added to the list is the Nasdaq-listed crypto exchange Diginex, which will offer the services of crypto lending and borrowing services beginning March 2021.

Richard Byworth, the chief executive of Diginex, has commented that this will help in capturing institutional requests and that this period is perfect as a result of the bearish outlook on the USD.

“An investor trading crypto-derivatives on our platform can borrow US dollar from us against bitcoin, which is put into our custody facility as collateral. If one sees the dollar value weakening against the bitcoin, that could be a better way to spend the fiat currency today than at a future date.”

Fearing inflation and the devaluation of the currency, corporations and financial institutions have decided to embrace Bitcoin. Indeed, Bitcoin’s rally for 2020 has been quite impressive, while the Dollar Index has dropped 7.4%.

Diginex declared that it planned to let traders borrow Bitcoin for the short-selling purpose as part of the hedging strategy. The lender on Diginex can receive a fee for the same. Such traders are very likely to start by the following month.

The Asian market continues to be hot currently in regards to crypto-based financial products. Diginex isn’t the first one to offer USD-loans with Bitcoin as collateral, as in 2020, Fidelity, an American company, had made a similar announcement, while entering a partnership with BlockFi.

The Asian Market is Hot!

Mira Christanto, Messari Crypto Researcher, has just published a report titled “Asia’s Crypto Landscape.” In it, she draws attention to the current development that is taking place in the crypto market on the continent and mentions that the Asian market is pretty hot regarding the possibility of crypto developments.

Christanto mentions that six out of the top-ten crypto unicorns are currently based in Asia. It has been reported that 94% of the trading volume in BTC futures and 98% volume for ETH-based futures are Asia-based.

“Leading crypto countries, such as China, Japan, Korea, Hong Kong, and Singapore, have deep pools of liquidity, while other countries have a great potential to scale. The nature of traditional finance has played a key role in the adoption of crypto: capital controls pushed investors towards cryptocurrencies in China and South Korea while low-yields pushed adoption in Japan.”

Countries such as Malaysia and Vietnam are also making key contributions to global FinTech developments.

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