Despite recent fluctuations in the value of cryptocurrencies, many institutional investors seem unfazed. A sign of how banks, investment funds, and other traditional investors are embracing the new digital asset class could be the expansion of Babel Finance, which provides a range of institutional-facing crypto financial products. Babel, a 2018 startup located in Hong Kong, just received a $2 billion valuation in its $80 million Series B fundraising round, the firm said. Jeneration Cash, 10T Holdings, and its current investors Dragonfly Capital and BAI Capital are the principal sponsors of the new capital injection.
Circle Ventures and a number of family offices in the Asia-Pacific area are other investors. To date, the company has secured $120 million in equity investment. As a complete crypto asset manager for institutional investors, Babel has developed from a cryptocurrency loan company that catered to miners and other users into one. It currently provides high-net-worth individuals and more than 500 businesses with services including crypto financing and borrowing as well as portfolio management.
Del Wang, co-founder and CEO of Babel, claimed that demand from this demographic “is significant as they seek more complex financial tools to handle their investments in cryptocurrencies.” The famously unstable nature of the cryptocurrency market increases the burden on asset managers like Babel to have a strong balance sheet. According to the creator, Babel’s financial sources include its own resources as well as “global institutional investment sources.”
Because the company “has no exposure” to the coins and restricts its operations to bitcoins, ethers, and certain stablecoins, the recent collapse of Luna and stablecoin UST had “no influence” on Babel’s business. At the end of 2021, the firm said that it will have over $3 billion in outstanding loans and an average monthly derivative trading volume of $800 million. It has constructed and traded options contracts worth more than $20 billion. Babel is already placing its own venture capital bets on up-and-coming enterprises, similar to other wealthy cryptocurrency companies. It didn’t specify which of the more than 10 firms it has invested in since 2020 with a focus on decentralized finance (DeFi), brokerage, and trading.
Babel is collaborating with regulators in Singapore, the U.S., Australia, Dubai, and Hong Kong to get further licences. Babel now possesses licenses in Luxembourg, Hong Kong, and the U.K. for “related enterprises.” It’s one among the numerous cryptocurrency companies that recently established a presence in Singapore, which is vying with Hong Kong to become Asia’s crypto hub. Major business players from around the globe are flocking to Singapore. “Singapore is a good launchpad for a corporate headquarters to service international clients because of its reliable legal system, illustrious wealth management sector, and innovative approach to crypto legislation,” added Wang.
