Swan Soars In Bitcoin Space: Onboarding Institutions With $200 Million Deployed

In a year of turmoil in the Bitcoin and crypto sector, Swan has been one of the companies injecting capital into the nascent industry. Despite the sector’s struggles, including high-profile setbacks faced by Sam Bankman-Fried and Changpeng Zhao, Bitcoin has thrived, culminating in a remarkable rally to close the year.

A report from Fortune Magazine highlights Swan’s investment and why they could be poised to yield positive results as the market turns bullish.

Swan Expands Offerings with Bitcoin-Backed Lending Amid Industry Turbulence

Swan, a Bitcoin-centric financial firm, announced an expansion into institutional services such as Bitcoin-backed lending and a substantial $40 million fundraising in 2023.

Founded in 2019 by Cory Klippsten, Swan started as a straightforward Bitcoin investment platform, focusing on core services like crypto buying, selling, and custody.

Klippsten, a vocal critic of broader crypto practices, has consistently highlighted the importance of Bitcoin and the pitfalls of risky strategies like rehypothecation. The report noted that his stance has only been reinforced by the downfall of companies like FTX, BlockFi, Celsius, and Genesis.

In an exclusive interview with Fortune, Klippsten revealed that Swan’s robust performance amid the crypto crash has paved the way for the firm’s foray into institutional offerings. Klippsten said:

We believed that in the aftermath of the capital destruction and crypto scandals, there was still a demand for these services globally, with limited providers available. Our reputation and brand have engendered trust.

Dubbed “Swan 2.0,” the firm’s journey hasn’t been without its share of controversy. Initially partnering with Prime Trust for custody services, Swan faced challenges when Prime Trust declared bankruptcy.

The subsequent partnership with Fortress also encountered hurdles, including a hacking incident and a failed Ripple acquisition. Swan’s current collaboration with BitGo aims to establish the first U.S. Bitcoin-only trust company, with hopes for a 2024 launch.

Swan Navigates Crypto Challenges, Eyes Growth with New Trust Venture

Entering the crypto lending space, Swan plans to distinguish itself from failed models like Celsius and Genesis. Klippsten emphasized a commitment to not rehypothecating customer assets and focusing solely on Bitcoin-backed loans.

The lending service will launch soon, allowing users to deposit Bitcoin and receive dollar-denominated loans at competitive rates.

Swan’s 2023 fundraising efforts, totaling around $165 million, have primarily focused on bolstering the Bitcoin ecosystem. Klippsten envisions raising an additional $150 million in 2024 to fuel further expansion.

With a projected $200 million revenue in early 2024, Swan is rapidly expanding its revenue streams, including advisor services and asset management for institutional investors, marking a significant stride in the Bitcoin-focused financial landscape.

Cover image from Unsplash, chart from Tradingview