Despite its own difficulties in recent months, cryptocurrency-focused merchant bank Galaxy Digital LP (GLXY) is reportedly in the process of raising a $250 million fund to provide loans to struggling cryptocurrency firms.
According to a recent report by Business Insider that cites insiders familiar with the matter, Galaxy Digital plans to offer loans to crypto companies in return for collateral including digital assets, property and even mining hardware.
Insiders indicate Galaxy Digital, which is led by Michael Novogratz, is planning to close its first round of fundraising for the new credit fund in March.
As we previously reported, crypto lending has quietly become a booming business thanks to both bullish and bearish speculators. Numerous lenders, including BlockFi, Salt Lending (SALT) and Genesis Capital, have seen notable upticks in key operational metrics throughout the bear market.
Given the risk inherent in Galaxy’s investing and trading operations, it’s not surprising the startup wants to expand into the lending market.
This news comes several weeks after Novogratz bought additional shares of Galaxy Digital, bringing his total ownership to 221.2 million ordinary shares, representing 79.3% of the company.
More: Galaxy Digital, the firm founded by bitcoin king Michael Novogratz, is raising a $250 million fund for crypto firms in need of cash
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.