“Most of our clients that are in the crypto mortgage side, they tend to be more affluent from a crypto network perspective,” said Milo Credit CEO Josip Rupena.
“So the volatility — they understand. You can say that the reason why they’ve made that wealth is because of volatility, and they understand it cuts both ways,” he added. Despite the swings in value over the past year, Rupena says none of his crypto mortgage customers have been margin called to up their collateral, and they have paid as expected.
In May 2022, bitcoin was valued at approximately $35,000 per coin just weeks before news of trouble at Celsius Networks emerged over the summer. Two months later, the digital currency was trading in the $19,000 to $21,000 range, where it largely wavered until scandals involving FTX and its CEO Sam Bankman-Fried began landing in news cycles in November. Bitcoin hit a low of $15,760, in the middle of that month, losing over half its value in a little over six months.
But despite the public relations hit the cryptocurrency industry took, the value of bitcoin has recovered from $16,640 at the beginning of the year to its current level of $28,929, rising close to 75%.
Ethereum experienced similar swings, trading from over $2,500 a year ago to under $1,000 two months later. Since early January, its value has risen 60% from $1,200 to $1,918.
The underlying reasons behind industry scandals had more to do with poor leadership than inherent flaws of investing in cryptocurrency investing, according to Nevins.
“Most of these issues that have come about in the last year — these were really ego problems. They were not crypto problems, and so we think we’ll, in due time, return to the traditional volatility that we see in the crypto markets and that this sector is only going to grow,” Nevins said.
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