Part 13/18:
When challenged about risks like sudden crashes or gap risks—large, rapid price swings—Zach asserts that BlockFi’s risk models are designed explicitly to handle volatility. During March 2020’s market crash, BlockFi remained operational, working with clients to ensure collateral levels and liquidity. Their risk management is built with conservative ratios, short-term borrowing limits, and continuous monitoring of liquidity venues.
He points out that Bitcoin’s structure, along with sophisticated hedge strategies, makes "50% gaps in a day" unlikely without ample liquidity in the market. The firm actively manages these risks, maintaining buffers—such as elevating reserve ratios and employing dynamic rate adjustments—to sustain resilience.