Ledn has secured an industry-first $50M syndicated loan backed by Bitcoin
In the year On August 20, Ledn, a digital lending platform, announced that it had successfully secured a $50 million syndicated loan backed by Bitcoin.
The Bitcoin (BTC)-backed loan was created by Sygnum, a global digital asset banking group with $4.5 billion in client assets.
According to a press release shared with Cointelegraph, the loan is industry-first and will “fund the growth of Lead's retail lending operations.”
Lead CEO and co-founder Adam Reeds explained the group's vision for the future in a Q&A with Cointelegraph:
“We view this pilot transaction as the first of many syndicated loans as digital assets inevitably integrate into mainstream financial markets.”
Related: 2 Reasons Solana and Other Altcoins ETF May Struggle – Signum Bank
Credit details
The partnership involving Signum's institutional clients enables Leddy to offer its clients enhanced flexibility when accessing capital.
John Glover, chief investment officer at Lead, said in a press release that the partnership with Sygnum “is a major step forward in integrating crypto assets into mainstream financial markets.”
“Partnering with Sygnum to secure the first Bitcoin-backed syndicated loan facility is a major achievement for Lead.”
Reeds told Cointelegraph that the loan is “very similar” to how Ledger manages its retail customers in loan management.
“Under certain LTV limits, Ledin is required to top up the loan collateral.”
Related: Bitcoin lender Ledn ETH, USDT to release interest accounts
Institution-level services
The partnership marks a transition to “fully regulated institutional-grade services” where BTC is an “increasingly popular” asset class.
According to the press release, the purpose of the loan of 50 million dollars is to “create a precedent for traditional financial participants.”
Benedict Codell, head of credit and lending at Signum, explained the implications for institutional services.
“From the first Bitcoin-backed syndicated loan to a fully regulated bank, Signum is excited to support Lead's future growth and launch a new market for institutional lenders and borrowers as the crypto ecosystem continues to grow.”
Related: Solana ETFs don't see significant demand – Head of Sygnum Research
BTC, ETH implications for institutional investors
Kathleen Tischhauser, head of investment research at Signum Bank, spoke with Cointelegraph about the benefits of exchange-traded funds (ETFs) for traditional institutional investors.
Tischhauser predicts that BTC ETF revenues will reach $30 to $50 billion in the first 12 months of trading, and Spot Ether (ETH) products will follow.
In the interview, Tischhauser explained that Ether mainly derives its value from revenues and cash flows and that it is “more relevant to traditional institutional investors than the concept of digital gold.
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