- The majority of loans were made to institutional market makers once exchange-traded funds for spot bitcoin were approved by the US.
- In the first quarter, Ledn processed $690 million in loans, 84% of which went to institutions.
- Since November 2022, the company’s loan book has increased by thrice.
- The increase was ascribed to the U.S. acceptance of spot bitcoin ETFs.
For cryptocurrency lending firm Ledn, the first quarter witnessed the processing of almost $690 million in loans, making it the company’s most successful quarter since its establishment in 2018. That sum is more than five times what it was for the three months prior.
According to a Ledn news release, more than 84% of the transactions were directed towards institutions, and demand surged after spot bitcoin (BTC) exchange-traded funds (ETFs) were approved in the United States in January and loans totaling several hundred million dollars were made to ETF market makers.
Institutional customers received ninety percent of the $140.3 million in loans that the company made in the fourth quarter of 2023.
As we’ve not only doubled our loan book since November 2022 but have also cemented our leading position in the market by responding to the growing demand for digital asset financial products, CEO Adam Reeds said in a statement that the first quarter of 2024 has set the tone for a promising year for Ledn.
Along with declining asset values, the cryptocurrency lending industry collapsed in 2022, forcing lenders including Celsius, BlockFi, and Genesis to declare bankruptcy. Only now are centralized lenders like Ledn beginning to recover from the bad publicity surrounding their failure. Meanwhile, lending in decentralized finance (DeFi) grew even more, as companies like Aave amassed $10 billion in total value locked (TVL).
In the fourth quarter of 2023, loans to institutional customers increased to $399 million, according to Coinbase (COIN), a cryptocurrency exchange. That was prior to the approval of the ETF. Ledn reported that it lent $100 million to retail clients in the first quarter, with $40 million coming from the financing of Celsius’s demise.
The company launched a cryptocurrency-backed loan product in December that enables borrowers to obtain a loan by offering cryptocurrency as security, which BitGo will then hold.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
