Crypto-Backed Bridge Financing

Monetize Otherwise Dormant Crypto Assets

Translate Crypto Assets into Real Digital Infrastructure Assets

As an institutional or private holder of a large portfolio of crypto assets, you have weathered the storm of volatility; more than likely, as you grew your holdings, you’ve experienced multiple rounds of volatility.

Monetizing your holdings, however, usually means a liquidation on some basis, sacrificing the benefit of waiting on the upside after a major dip in asset value. The assets are effectively dormant when it comes to cash flow or access to capital from your crypto holdings. What if there was a way to access capital, general cash flow, and translate your crypto holdings into real assets such as broadband digital infrastructure projects to generate near-term cash flow as well as long-term sustainable utility-grade cash flow and asset appreciation.

One trend is Crypto-Backed Bridge financing. This is where a bank provides bridge financing to an institutional or private holder of crypto, and the crypto holder uses the bridge loan to invest in an SPV for digital broadband infrastructure, or real estate, or other cash-flowing program assets. Once the digital infrastructure project is deployed, or the multifamily or hotel/resort property is acquired and stabilized, these assets are refinanced at their new valuation, the crypto holder recoups their initial investment, they can retain a stake in the upside of the project, or they can exit completely.

During the holding period, the crypto assets are held in custody, and they continue to accrue. The crypto holder also receives interest from the SPV where they invested the bridge financing. They also receive periodic payments from the SPV during the implementation of the digital infrastructure project (e.g., undersea fiber cables, onshore fiber loops, and FTTH [Fiber-to-the-Home] implementation, or real estate). Upon reaching project milestones in the overall development, the SPV executes one of several exits for the crypto investor and for the SPV with a refinancing at the new valuation of the assets [now cash flowing], or a sale, or public offering.

Putting crypto assets to work while waiting out a rebound has substantial benefits. Translating crypto assets into cash-flowing real assets, generating interim cash flow, participation in SPV cash flow and asset upside, and recoupment of preferred equity while your crypto assets held in custody continue to accrue without having to sell the crypto is an attractive value proposition. It repurposes your crypto holdings while maintaining your holdings.