Heading into 2024, it’s hard to ignore the fact that the cryptocurrency market has become a an integral part of the broader financial system stage. With an estimated 420M holders of cryptocurrency worldwide, and Bitcoin being successfully adopted by nations and traditional financial institutions alike, it’s clear that we are only in the early innings of a larger paradigm shift that will rework the global economy.
Crypto assets have grown to a combined valuation of >$1.5 Trillion, and it has minted a lot of new millionaires in the process. These investors have seen the value of their assets skyrocket! Naturally, as everyone else – they’d like to access their wealth without having to sell their best-performing asset. To do that, they need lending services.
Lending is a key tenet of a financial economy, and people around the world are making use of crypto loans in a variety of real world situations. From veterinary bills to mortgage applications, users globally are harnessing crypto loan products to make the most of their Bitcoin wealth, without having to sell it and create a taxable event.
The recent uptick in crypto loans is due to a number of factors. The space as a whole has recovered from the significant collapse related to the infamous FTX/SBF fraud and bankruptcies, and crypto lending products are being developed and improved in a way that addresses safety and legitimacy.
For example, one major crypto lender has announced the launch of custodied crypto loans. This means the collateral that users put up will be held securely by qualified custodians and banks – as opposed to rehypothecated as part of yield generation strategies.
Ledn is the team releasing the retail custodied loan product for clients globally.They’ve issued nearly $5BN worth of crypto loans to retail and institutional borrowers since inception in 2018. They’ve done so by delivering a simple user experience, with best-in-class transparency and risk management. Among Ledn’s differentiators are its ongoing Proof-of-Reserves protocols, its Open Book reports, and the ringfencing of its lending activitiy risk. This is a testament to the fact that crypto investors need and want lending services, and they can be offered responsibly. Ledn is also backed by world class investors including 10T Holdings, Coinbase, Kingsway, White Star & more.
This is the type of initiative that will help transform the digital asset space into a global industry, allowing it to stand shoulder to shoulder with legacy finance. In 2024, we will begin to truly see this vision come to life.