Crypto-backed loans can help drive down various risks associated with corporate investing in Bitcoin. Active in the crypto-backed lending sector, EquitiesFirst takes a deep-dive look at this trend and the implications for Asia.

Thailand is a key market for EquitiesFirst where the lack of support from the traditional banking sector and the higher cost of raising capital from the bond market have led to share pledge financing being a more attractive channel to access capital via private credit.

EquitiesFirst’s capacities go beyond their specialization in single name share financing to include Special Purpose Acquisition Companies (SPACs) and Exchange-Traded Funds (ETFs). This analysis demonstrates how EquitiesFirst’s financing model has several advantages and uses cases that suit the unique characteristics of these asset types.

There is a broad demand for capital onshore in Malaysia, as a significant segment of the economy was underserved by traditional bank financing even prior to the Covid epidemic. An analysis by EquitiesFirst identified the Malaysian market as a significant regional outlier for loans employing listed equity shares as collateral.

A general perception exists that share pledge financing transactions will have a negative impact on the price of the share collateral. EquitiesFirst has conducted an analysis of share pledge transactions to provide context and insights to dispel this perception for equity investors.