Blockchain.com is one of the oldest platforms in the crypto space, founded way back in 2011. Since then, thanks in part to its easily recognizable domain name and conservative management, the company has gradually expanded.
With the increase in interest in trading products after the 2017 bull market, the company’s focus has also shifted more and more from simply holding digital assets to exchanging them through an exchange.
Since 2019, the company has also entered the world of futures and leveraged trading, but without any success. A poor interface, combined with an audience accustomed to passively holding crypto, has been responsible for extremely low volumes compared to competitors (even today, the roughly $3 million in daily volume is microscopic compared to the assets under management and compared to industry leaders).
As a result of this failure, Blockchain.com has had to look for new solutions. Among these, lending to institutional investors and over-the-counter (OTC) trades stand out.
In this area, they have done much better, becoming one of the main reference points for large-scale trades and controlling loans worth over $400 million since 2021.
This new push into the nascent crypto lending sector, combined with the already mentioned authority given by the name and age of the company, has allowed Blockchain to raise more than $500 million in investments between 2021 and 2022, culminating in a record valuation of $14 billion.
However, after the crashes of Terra and Celsius, the situation for most crypto lenders has deteriorated dramatically. With so many liquidations and bankruptcies, even Blockchain.com found itself exposed to losses. Specifically, it is estimated that there is a $270 million hole, lent to the hedge fund Three Arrows Capital.
The acquisitions made by the team have also quickly lost value during the “crypto winter”: SeSocio, a South American exchange, almost went into default, and Altonomy, an OTC desk, has proved redundant for the platform’s business.
Despite the huge amount of funds raised during the bull market, the company has already laid off 30% of its staff. Not exactly the move of a company that is doing well and wants to take advantage of discounts.
Now there are rumors that Blockchain.com is contacting all its partners and competitors to sell both digital assets it owns and some investments made by its Venture Capital arm.
One of the first sales was PolySign, on which Blockchain.com Ventures had heavily bet in 2021.
Also worrying are documents transferring shares of the company in exchange for small investments, which make Blockchain.com seem desperate to get money quickly.
It’s never positive to go from hundreds of millions of capital raised to just a few thousand…