Virginia pension fund is looking to maximize its returns by investing in the crypto lending markets. This is coming despite the low confidence level in the market after investors lost huge funds from the collapse of Three Arrows Capital.
The retirement system with $6.8 billion in funds recently received the node from its board of trustees to start investing in “yield farming.”
This allows investors to lend out their digital tokens to crypto projects for fixed returns from the project. It allows crypto holders to take their idle assets and put them in investment platforms that will be generating fixed payments.
Investors Skeptical About The Crypto Yield Farming Market
Chief investment officer of the Fairfax County Police Officers, Katherine Molnar, commented on the development. She stated that some of the yields the holders will enjoy will be very attractive considering that so many people have stepped back from that space.
Your capital is at risk.
This year’s credit crisis in digital assets has been mainly a result of credit lending, following the $40 billion collapse of stablecoin terra. The token, which was very popular for yield farming, had ripple effects across the crypto market.
It affected several companies that focus on crypto lending, including Voyager and Celsius Network. Other companies like hedge fund Three Arrows had to go into bankruptcy while several retail traders that invested in yield-farming were also at a massive loss. Several yield farming projects offer yields that are way higher than those obtainable in the bond markets. This makes them very risky since they provide lesser investor protection than seen in traditional finance.
The Space Is Wide Open For Huge Benefits
Several major companies specializing in crypto lending, including Celsius Network and Voyager, as well as hedge fund Three Arrows Capital, have fallen into bankruptcy while scores of retail traders who invested in risky yield-farming strategies were hit with heavy losses.
Many yield-farming projects offer yields that are much higher than those available in bond markets but provide few investor protections found in traditional finance.
Molnar noted that many people have left the industry due to recent events. This has left the space wide open for those looking to provide liquidity o earn attractive yields.
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Source: https://insidebitcoins.com/news/virginia-pension-fund-invests-in-crypto-lending-market-to-improve-returns