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The Opportunity in High Yield Crypto-Backed Loans

Published

7 месяцев ago

19 февраля, 2025

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Despite all of the positive news about digital assets coming from the new administration, the crypto ecosystem still isn’t fully integrated with the U.S. banking system. Even with the removal of “Operation Chokepoint 2.0” restrictions, institutions and individuals aren’t able to access the money markets with the level of efficiency that traditional Main Street, let alone Wall Street, is able to.

This has created an opportunity for many crypto native-entities to take advantage of what they do have — good collateral — and to use that collateral to borrow U.S. dollars (USD). The result is an asset-backed loan that has the potential to yield more than it “should.”

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With junk bond spreads less than 300 basis points (bps) above U.S. Treasuries, BTC-backed loans may offer more yield than junk bonds with less risk than investment-grade bonds. Using current market conditions and a standard credit default modeling technique, BlockFills estimates a fair value of 150-200 bps over USTs for BTC backed loans, yet they currently trade at 400-600 bps over USTs.

Overcollateralized BTC-backed loans may present a great opportunity for traditional finance institutions participating in crypto at scale, in a fashion that is reminiscent of prior innovations like mortgages and junk bonds. These transactions can be structured in a Tri-Party arrangement, which is when two parties engage a third party as a trusted custodian for funds held in escrow. This removes the need to custody crypto, handle margin calls and deal with selling the collateral under default conditions.

Crypto market participants and businesses simply do not have full access to the USD banking system. These BTC-backed loans are a possible solution to fill the gap. The collateral is good, tradable and liquid in both on- and offshore markets. This compares favorably with default conditions in corporate loans where bankruptcy proceedings can last for years (or decades).

A portfolio of such loans does not represent diversification since all these loans would be backed by cryptocurrency. However, that does mean that a portfolio may be hedged using the options* market, which has also become liquid in both listed and OTC markets for BTC.

The BTC-backed loan market is an opportunity that bridges crypto and traditional finance. It’s not meant to provide the sort of “degen” returns that may be available in outright positions but instead speaks to the sorts of investment parameters that come with vocabulary recognizable to the Patagonia vest-wearing crowd. Terms like “excess risk-adjusted return” and “harvesting premiums” are reminiscent of the 80s and 90s.

Written by Ari Pine, Co-Head of Exotic Derivatives* Products at BlockFills, a trading and market technology firm.

The levels cited above are indicative, only serving as general guidance or potential scenarios based on certain market conditions. They don’t account for future market movements, execution risks or other dynamic factors. Always remember to assess the information, conduct your own analysis and make decisions that align with your financial goals and risk tolerance.

*Derivative Products available to Qualified Counterparties Only. For US Persons, client is an Eligible Contract Participant (“ECP”) as defined in Section 1a(18) of the Commodity Exchange Act and related guidance. Non-US Persons must qualify as an Eligible Professional Client. BlockFills only provides services to customers resident in the UK who fall within an exemption available under the UK financial promotion regime (Investment professionals, High net worth individuals, High net worth companies, unincorporated associations etc. Certified sophisticated investors).

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Bitcoin Mining Profitability Fell in August, Jefferies Says

Published

2 часа ago

15 сентября, 2025

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Bitcoin (BTC) mining profitability declined 5% last month primarily becuase of an increase in the network hashrate, investment bank Jefferies said in a research report Sunday.

«A hypothetical one EH/s fleet of BTC miners would have generated ~$55k/day in revenue during August, vs ~$58k/day in July and ~$44k a year ago,» wrote analysts led by Jonathan Petersen.

The hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain, and is a proxy for competition in the industry and mining difficulty. It is measured in exahashes per second (EH/s).

U.S.-listed mining companies mined 3,573 bitcoin in August versus 3,598 in July, the report noted, and these miners accounted for 26% of the Bitcoin network last month, unchanged from July.

MARA Holdings (MARA) mined the most bitcoin of the group, with 705,703 tokens, followed by IREN (IREN), Jefferies said.

MARA’s energized hashrate is still the largest of the group, at 59.4 EH/s, with CleanSpark (CLSK) second with 50 EH/s, the report added.

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France, Austria and Italy Urge Stronger EU Oversight of Crypto Markets Under MiCA

Published

2 часа ago

15 сентября, 2025

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Market watchdogs in France, Austria and Italy want the European Union to tighten its approach to crypto regulation, warning that uneven enforcement of the bloc’s landmark MiCA legislation could leave investors exposed to risks that aren’t covered by the rules.

In a joint statement, France’s Autorité des Marchés Financiers (AMF), Austria’s Finanzmarktaufsichtsbehörde (FMA) and Italy’s Consob said the first months of MiCA’s rollout revealed “major differences” in how national supervisors apply the law. Without changes, they argued, firms may shop around for lenient jurisdictions, undermining both investor protection and Europe’s competitiveness in digital assets.

The regulators set out four proposals. Chief among them is handing direct supervision of the largest crypto-asset service providers to the European Securities and Markets Authority (ESMA). They also want to close loopholes allowing EU intermediaries to route orders to offshore platforms not bound by MiCA, a practice that leaves investors without regulatory safeguards.

The authorities also called for mandatory, independent cybersecurity audits before firms receive or renew MiCA licenses, citing the sector’s high exposure to hacks. Finally, they proposed a centralized filing system for token white papers to simplify cross-border offerings and ensure legal clarity.

While MiCA was designed to harmonize crypto oversight across the EU, the three regulators say swift adjustments are needed to align with international standards set by the Financial Stability Board and IOSCO. Without them, they caution, national regulators may be forced into emergency measures that risk fracturing Europe’s digital asset market.

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PayPal Adding Crypto to Peer-to-Peer Payments, Allowing Direct Transfer of BTC, ETH, Others

Published

2 часа ago

15 сентября, 2025

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Payments firm PayPal (PYPL) said it is expanding its peer-to-peer service by adding cryptocurrency transfers to its payment flow, the company announced on Monday.

Users in the U.S. will soon be able to send bitcoin (BTC), ether (ETH), PayPal’s dollar stablecoin PYUSD and other digital assets across PayPal, Venmo and an increasing number of crypto-compatible wallets worldwide, the firm said in a Monday press release.

The integration arrives alongside «PayPal links,» a new tool that lets users generate a one-time personalized link to send or request money. The links can be dropped into text messages, chats or email, embedding payments into everyday conversations.

Personal transfers between friends and family will remain exempt from IRS 1099-K tax reporting requirements, meaning gifts, reimbursements and shared expenses won’t generate tax forms even if crypto is involved in the transaction, the firm said.

The company said the move builds on «PayPal World,» its new interoperability initiative aimed at connecting the largest digital wallets and payment systems. Peer-to-peer payments are a key growth driver, with consumer payment volume climbing 10% in the second quarter year-over-year. In July, the firm said to expand crypto payments for U.S. merchants as part of its deeper push into global digital currency payments.