Crypto Lending Industry Revitalized by Bitcoin ETFs and Bankruptcy Refunds
The market assessment from cryptocurrency lending agency Ledn highlights the recent resurgence in the crypto lending industry, attributed to the introduction of spot Bitcoin (BTC) exchange-traded funds (ETFs) and the return of assets from bankrupt companies to creditors.
Mauricio Di Bartolomeo, co-founder of Ledn, underscored the significance of these developments, stating that investors never truly left the market; they simply became apprehensive. Speaking at the Consensus 2024 conference in Austin, Texas, Di Bartolomeo emphasized Ledn’s conservative approach of being “boring, slow, and safe,” which helped the firm navigate the challenging crypto winter that led to the downfall of major players like Celsius, BlockFi, and Genesis.
In the crypto lending sector, customers deposit Bitcoin or other cryptocurrencies with firms like Ledn, earning interest on their deposits or using them as collateral for loans. Following a downturn in 2022 due to a market crash, the industry has since rebounded, with the CoinDesk 20 Index showing a more than 200% increase since the end of 2022.
The resurgence was further fueled by major financial institutions like BlackRock approving Bitcoin ETFs, bringing renewed credibility and interest to the market. Di Bartolomeo highlighted the positive impact of Bitcoin ETFs on the lending market, noting that Bitcoin’s price surge from $20,000 to $70,000 made it a focal point in the political landscape of the USA.
Ledn’s performance mirrors this recovery, with the company completing over $690 million in loan transactions in the first quarter of 2024, marking its most successful quarter since its inception in 2018. Notably, a significant portion of these loans were directed towards institutional clients, with demand increasing following the approval of ETFs in January.
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