$5bn crypto lending market set for upsurge in 2020, report

According to the Q4 2019 report released by Ripple the crypto lending market, currently estimated to be worth five billion US dollars ($5 billion), is set for an upsurge this year.

The five billion dollars worth crypto credit industry practically emerged from nothing and witnessed tremendous demand in the last two years. The industry is now headed for a significant blow-up in 2020, reports suggest. However, with relaxed lending norms, large sums of money chasing few borrowers, and increased vulnerability to risks, the crypto lending platforms serve as a subtle reminder of how emerging technologies are paving the way for a never-seen-before future of finance.

Crypto lending market set for a massive boom, Ripple

According to the leading crypto payments company Ripple, this is just the start for the multi-billion dollar industry. The crypto lending market experienced a massive surge in demand last year and is set for an even bigger appetite this year, the report forecasts.

The massive gain in traction has been triggered by many factors, some of which include low interest in fiat currencies, booming interest in the digital assets industry with investors seeking to earn working capital, and the growing number of long-term investors looking to make higher yields. 

For some traders, however, it isn’t the unsatisfactory adoption rate or regulatory uncertainty that keeps them up at night but concerns over another credit bubble, and the risk that comes with gives them the shakes. Despite the skepticism, the growth potential shows signs of extreme upswing this year and beyond.

How crypto credit market scored the perfect goal

Meanwhile, Ripple’s sentiments were also echoed by Graychain, a crypto credit assessment startup that recently published a report on how crypto lending platforms are shaping our future. Their report revealed that while the first quarter in 2019 reported five thousand four hundred and sixty-two new loans, the latter half registered a whopping two hundred and thirty-nine percent (239%) increase to eighteen thousand five hundred and sixty-two loans.

Per Graychain, the up and coming industry is primarily driven by professionals seeking leverage, tax deferrals, and liquidation through crypto loans. Besides, the highly digitized processes, usage of smart contracts to monitor payment status and change in interest rates, making it extremely easy and convenient for a borrower to get a loan as the need for the right credit score and credit check is eliminated with the next generation crypto lending platforms, and that, indeed, gives them an edge over conventional banking systems. 

Featured Image by Pixabay