In a year of turmoil in the bitcoin and cryptocurrency sector, Swan has been one of the companies that has injected capital into the nascent industry. Despite the sector's struggles, including high-profile setbacks faced by Sam Bankman-Fried and Changpeng Zhao, bitcoin has thrived, culminating in a notable rally to close out the year.
TO crypto/2023/12/07/swan-bitcoin-lending-cory-klippsten-institutional-venture/” target=”_blank” rel=”noopener nofollow”>report Fortune magazine highlights Swan's investment and why it could be poised to produce positive results as the market turns bullish.
Swan Expands Offering with bitcoin-Backed Loans Amid Industry Turbulence
Swan, a bitcoin-focused financial company, announced an expansion into institutional services such as bitcoin-backed lending and a major fundraising of $40 million in 2023.
Founded in 2019 by Cory Klippsten, Swan started as a simple bitcoin investment platform, focusing on core services such as buying, selling, and custody of cryptocurrencies.
Klippsten, a vocal critic of broader crypto practices, has consistently highlighted the importance of bitcoin and the dangers of risky strategies like remortgaging. The report noted that his stance has only been reinforced by the decline of companies like FTX, BlockFi, Celsius, and Genesis.
In an exclusive interview with Fortune, Klippsten revealed that Swan's strong performance amid the cryptocurrency crash has paved the way for the company's foray into institutional offerings. Klippsten said:
We believed that, following the capital destruction and cryptocurrency scandals, there was still demand for these services globally, with limited providers available. Our reputation and brand have generated trust.
Dubbed “Swan 2.0,” the company’s journey has not been without controversy. Initially partnering with Prime Trust for escrow services, Swan faced challenges when Prime Trust filed for bankruptcy.
The subsequent partnership with Fortress also encountered obstacles, including a hacking incident and a failed Ripple acquisition. Swan's current collaboration with BitGo aims to establish the first US-only bitcoin trust company, with hopes of launching in 2024.
Swan Navigates crypto Challenges, Envisions Growth with New Trust Company
By entering the crypto lending space, Swan plans to distinguish itself from failed models like Celsius and Genesis. Klippsten emphasized a commitment to not remortgage client assets and to focus solely on bitcoin-backed loans.
The lending service will launch soon and will allow users to deposit bitcoin and receive dollar-denominated loans at competitive rates.
Swan's fundraising efforts in 2023, totaling around $165 million, have primarily focused on bolstering the bitcoin ecosystem. Klippsten plans to raise an additional $150 million in 2024 to fuel further expansion.
With projected revenue of $200 million by early 2024, Swan is rapidly expanding its revenue streams, including advisory and asset management services for institutional investors, marking a significant step in the bitcoin-centric financial landscape.
Cover image from Unsplash, chart from Tradingview
