Investors Shifting Towards Lower Risk Crypto Interests: Block Earner GM
Block Earner, an Australian fintech company, says Terra Luna’s fall in May has led to “positive surprises” for his company, with investors starting to flock to the lower-risk products it offers.
Speaking to Cointelegraph, the company’s CEO Apurva Chiranewala revealed that the company has seen a wave of investors who previously sought double-digit returns but now want a “less risky version” of those returns.
“Given that the risk has increased significantly for these returns, these guys have actually started engaging with us because we look like the less risky version of these double-digit return products.”
Before their collapse, crypto-lending platforms like Celsius and Anchor Protocol offered annual percentage returns (APYs) of up to 20% for users who locked their digital assets with them.
Block Earner is a blockchain-powered fintech company that provides access to crypto-related return-generating products. Still, Chiranewala explained that the platform is aimed at those who want exposure to the crypto markets but have a lower risk appetite.
The Gold Earner and USD Earner products are currently generating single digit returns.
Data shared by Block Earner to Cointelegraph shows that the Terra Luna fiasco coincided with an increase in withdrawal events in early May and again in mid-June due to the Celsius drop. However, there has been a steady return to normal levels since then.
Australian dollar (AUD) cash deposits have also remained stable in the April to July period, while the company’s user base has grown an average of 15% month-on-month.
Chiranewala also stated that in recent weeks he had seen a “high level of interest” from institutional investors, including hedge funds, venture capital (VC) and pension funds (pension funds).
“We’re almost forced to now simultaneously build institutional products because the interest in that space is huge.”
“There are government bond VCs, there are hedge funds, there are private funds […]and then there are super funds that mandate that a very small portion of the portfolio be distributed to high-yielding assets,” he added.
Related: Economics redefined: DeFi’s downturn deepens, but protocols with revenue may thrive
Chiranewala admits that the company has not been completely immune to the downturn in the crypto markets. Block Earner has had to withdraw marketing costs for user acquisition.
“In the environment we’re in right now, it makes very little sense for us to market and acquire users. So we stopped, we actually scaled back a lot on our marketing strategy.”
“You naturally see a little bit of a softer growth trajectory, as opposed to a steeper, you know, curve that’s growing week by week,” he said.
Earlier this month, a Coingecko report stated that the decentralized finance (DeFi) market cap fell 74.6% from $142 million to $36 million during the second quarter, largely due to the collapse of Terra and its stablecoin TerraUSD Classic (USTC) in May.
