BitGo Prime: Strength in Lending

Recent market developments have been harsh and unforgiving to a number of major crypto lenders. Understandably, we’ve been fielding questions from institutions concerned about the state of the industry and wondering who, if anyone, they can trust.

We’ll be concise: BitGo Prime’s loan book remains healthy and continues to grow. Despite the developments toppling other firms, we’ve had zero losses of customer funds and continue to operate as a leader in the lending and borrowing space for digital assets.

Our lending philosophy — based on prudence and oriented around risk-adjusted returns — has kept us (and, more importantly, our customers) safe and catapulted BitGo ahead as one of the primary players managing risk in the digital asset market. We’d like to explain what that means for you.

Managing risk for institutional clients

In an industry defined by volatility, we’ve always strived to be a partner you can depend upon. Having started in the early days of crypto, we’ve survived multiple winters and understand what it means to build with the long-term in mind. And we built BitGo Prime to be durable.

We made the conscious choice not to chase riskier loans with higher short-term returns. We focus on high-quality borrowers, believe in diversification, and speak about “risk-adjusted returns” as something more than just marketing.

We’ve helped our clients not merely weather the market, but grow and thrive. Our approach — and the results they’ve produced — have cemented our reputation as the safest way for our customers to lend and borrow digital assets.

A key element in this strategy has been to price risk intelligently and then manage it in a number of interlocking ways. That includes operating a strong, independent risk team and arming them with world-class technology controls. With those working in tandem, BitGo Prime is able to consistently offer fair, stable rates that we believe are sustainable for the long-term.

By pricing risk appropriately, we haven’t always been the right fit for those seeking an altogether different investment profile. But we believe taking a steady, reliable approach is the only responsible way to mitigate the risks of an otherwise very volatile market. And we also believe the results bear that out.

Who we serve

Our customer base covers a wide range of institutions, from hedge funds and miners to major technology platforms and crypto startups. What unites them on the lending side is a desire to generate yield with minimal counterparty risk; what unites them on the borrowing side is the need to access liquidity on fair and stable terms. This makes sense when you consider our history.

Our loan book originated very naturally. BitGo is best-known as a qualified custodian renowned for our security technology, which in turn has attracted a large network of crypto hodlers focused on preserving their capital. Those firms want to earn responsible returns on their holdings.

BitGo Prime arose to meet that need, offering both lending and trading services.

How we operate

Our lending business is characterized by:

• Reduced counterparty risk. We conduct heavy due diligence, select our institutional counterparties carefully, and require heavy collateralization for all loans.

• Stable rates and low risk of loan recall, both because our lenders are usually hodlers and because we seek to build long-term relationships.

• Flexible deal structure commensurate with credit risk, though we do standardize our collateralization level.

Why this makes sense for lenders

• Earn competitive returns with reduced counterparty risk. Because BitGo selects for high-credit borrowers, we’re able to offer good terms with comparatively lower risk than lenders can get from our peers or from other alternatives.

• Custody and lend your funds through BitGo’s integrated solution. Customers enjoy being able to work with BitGo for multiple services and thereby reduce their operational burden.

• Face BitGo as your sole counterparty. Deal simply with BitGo and our experienced team, rather than finding your own borrowers or working with a lender who operates with a different approach to risk.

Why this makes sense for borrowers

• Access competitive rates and deep liquidity, thanks to BitGo’s established network of major asset holders.

• Get terms tailored to your needs. BitGo offers a number of options for high-credit borrowers, then avoids aggressive re-rates in favor of building long-term relationships.

• Face BitGo as your sole counterparty. Meet your liquidity needs — whether raising working capital or funding your strategy — as well as get access to our trading solution.

How we can serve you

Despite market headwinds, our business continues to grow with incredible strength. We’re actively engaging in new lending and borrowing opportunities, and look forward to serving you.

If you’d like to learn more, please reach out to our team to start a conversation.