3 Ways to Identify Responsible Lenders to Manage Digital Assets

By John Glover

Investors are rightly evaluating how digital assets should be managed, as 2022 closes out as a difficult year for cryptocurrencies and traditional finance at large. Industry-wide performance has left some investors disappointed. But seasoned Bitcoin investors and institutional traders may take a longer view with a strong belief in the future of digital assets.  

They will likely be looking beyond short-term volatility and bearish sentiment toward long-term wealth generation prospects. For such investors, now is a good time to reassess who manages their digital asset investments and ask some important questions about risk management 

At Ledn, here are the questions we suggest investors ask when assessing if a potential lender can manage investment risks and maintain respectable returns. 

  1. How is the lender generating yield on my assets?

Some lenders will always be tempted to take big risks to try to earn more money and drive more profitability. But generating large yields often comes with the sacrifice of taking outsized risk of losing invested assets.   

If the market for US dollar stablecoin is 8-10% and someone else is paying 20%, investors must ask hard questions about how they can do that. When yields appear too good to be true, they usually are.  

Right now, prudent lenders still see opportunities in the market where they could seek higher yield for clients. However, they’re making a conscious effort to assess tho