Galaxy Digital, the cryptocurrency bank founded by former Goldman Sachs partner Michael Novogratz, is raising at least US$250 million for a credit fund to offer US dollar loans to cryptocurrency companies, according to people familiar with the matter.

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The bank will be offering loans to the firms and asking for cryptocurrency assets, properties and even machines that mine cryptocurrencies as collateral.

Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

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Galaxy will close a first round of fundraising in March, two of the people familiar with the matter said.

Novogratz’s firm already lends to cryptocurrency businesses using its own balance sheet.

It has also backed cryptocurrency-lending start-ups through its investment firm Galaxy Digital Ventures, leading a US$52.5 million fundraiser for New York-based start-up BlockFi last year.

However, demand from borrowers has grown so much that Galaxy now wants to launch its own fund, two of the people said. It will be run out of Galaxy’s asset management arm.

A spokeswoman for Galaxy declined to comment on the fund.

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With the cryptomarket in free-fall since 2018 – bitcoin has fallen more than 80 per cent since last year – an increasing number of cryptocurrency firms are looking for funding.

Cryptocurrency miners, who rely on high cryptocurrency prices to maintain profitability, have been among those hit the hardest.

These firms may now face a customer exodus and lower mining profits.

Many start-ups that raised funding through digital coins are also suffering as they couldn’t raise additional funding while the price fall crushed the value of their holdings.

Lenders to these companies, in turn, are seeing a spike in demand.

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BlockFi, which launched its first cryptocurrency-backed lending product in 2018, has seen its revenues grow 10-fold since June, according to Zac Prince, BlockFi’s CEO.

The company is planning to offer more products this year, including a savings account where clients can earn interest on their cryptocurrency holdings.

Salt Lending, another cryptocurrency loan provider, has hired 85 staff to date and is planning to expand the team by 25 per cent in 2019, CEO Bill Sinclair said.

The provider had issued US$52 million in loans through to the end of 2018.

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This article originally appeared on Business Insider.