Digital Prime Technologies, founded by former Cantor Fitzgerald executives, has launched a crypto lending platform named Tokenet, aiming to capitalize on the potential U.S. regulatory approval of Bitcoin ETFs.
Digital Prime Technologies, a company launched by former Cantor Fitzgerald executives, has entered the crypto lending market with a new platform named Tokenet. The platform is aimed at positioning itself for a boom expected with the potential approval of Bitcoin exchange-traded funds (ETFs) in the United States.
Already serving clients such as Xapo Bank, Tokenet allows the lending of digital assets to various players in the market, including EDX Clearing and Hidden Road Partners. The Jersey City-based company emphasizes strong risk management and user communication with features like chat for loan handling, showing its readiness to address current market needs.
This move by Digital Prime comes at a critical time. The market experienced a significant void after the downfall of crypto lenders like Genesis and Celsius last year, which slowed trading activity and limited options for crypto operations.
With signs pointing to a possible U.S. acceptance of direct Bitcoin ETFs, Digital Prime is betting on a revitalized demand for Bitcoin borrowing, especially from ETF issuers, potentially kickstarting the crypto lending sector once again.
The company’s CEO, James Runnels, compares this moment to a “rebirth” for crypto lending. In practice, if Bitcoin’s value goes up suddenly, those creating ETFs may prefer to borrow Bitcoin (BTC) rather than buy it at high prices, hoping to purchase later when prices are lower.
This process is essential for ETFs to function smoothly, helping to balance the ETF’s price with the actual value of the assets it holds through the careful issuance and redemption of shares based on demand.
Digital Prime’s leadership, including COO Bob Sherry and head of risk solutions Glen Garofalo, has a wealth of experience from their days at Cantor Fitzgerald. The company has also secured the necessary financial industry memberships and registrations, backed by seed funding from investors like TD Cowen Inc., positioning it as a strong new entrant in the crypto lending space, ready to capitalize on future market developments.