The Future of Lending with Zac Prince of BlockFi

— BlockFi operates in asset-backed lending by offering USD loans collateralized by Bitcoin and Ethereum, with loan-to-value ratios currently at 35% and one-year terms.

— The lending market in crypto comprises four distinct buckets: USD lending against crypto collateral, Bitcoin borrowing for short positions, on-exchange margin lending, and outright scams.

— Zac Prince's prior experience in peer-to-peer online lending informed BlockFi's model; the online lending industry shifted from retail-focused to institutionally backed but successfully complemented traditional banking rather than replacing it.

— Risk management includes 72-hour margin call windows, automated liquidation processes, and full custody partnerships with Gemini; most clients cure margin calls rather than face liquidation.

— Borrowers use these products primarily for wealth management—optimizing asset diversification, deferring capital gains taxes, and accessing investment interest expense deductions.

— International expansion is accelerated; 40% of website traffic and loan applications already come from outside the US, with tokenized USD lending planned before end of 2019.

— Collateral diversification through lending: Borrowing against volatile crypto holdings allows you to maintain your position while accessing USD liquidity for real estate, debt paydown, or other investments—and defer capital gains taxes via the investment interest expense deduction.

— Watch tokenized USD adoption in emerging markets: Prince argues tokenized dollars will become the most liquid asset in crypto ecosystems within 12–24 months, addressing demand in hyperinflation-prone regions where stable stores of value are more valuable than volatile Bitcoin.

— Institutional adoption follows infrastructure: Expect family offices and proprietary trading firms to lead, followed by hedge funds and asset managers; regulatory clarity on custody and licensing (not a ban) is the key bottleneck, not a deal-breaker.