Ledn says bitcoin-backed lending market could reach $1 trillion as securitization attracts institutional capital
Ledn co-founder Mauricio Di Bartolomeo projected that the bitcoin-backed lending market could grow to $1 trillion in the next five to 10 years, arguing investment-grade bonds can unlock institutional investment in the sector.
Ledn issued Canada's first bitcoin-backed loan in 2018, since becoming one of the sector's largest lenders. The company estimates it now accounts for roughly 30% of the global market, originating $1.4 billion in loans during 2025.
However, the crypto lending sector remains contentious after suffering significant setbacks following a tumultuous year for centralized services in 2022 — a period that saw the bankruptcy of firms like Celsius, BlockFi, Voyager Digital, and Genesis.
In an interview with The Block's Gareth Jenkinson at BTC Prague last week, Di Bartolomeo said no single balance sheet could provide the liquidity needed to support a $1 trillion market. Instead, he pointed to mortgage and auto loans, where roughly 60% to 70% of mortgages and about 25% of auto loans are securitized and sold as bonds, as a model to follow. Ledn's thesis is that packaging bitcoin-backed loans into similar products could allow lenders to tap the multi-trillion-dollar asset-backed securities market and attract institutional capital to the sector.
"In order to get a bond that's meaningful, you need size, you need at least $200 million, and you need a rating," he said, highlighting Ledn's own recently issued bond product that uses Fidelity as a custodian and Jefferies as the bookrunner. According to Di Bartolomeo, it was the first bitcoin (BTC) debt instrument rated by S&P Global, receiving an investment-grade rating.
An investment-grade rating is significant because many institutions, including pension funds and endowments, allocate capital specifically to investment-grade debt securities, potentially opening a different pool of funding than bitcoin exchange-traded funds or Strategy-style preferred-stock offerings.
"We were marketing this bond during February, which was during the correction," Di Bartolomeo continued. "The very interesting thing was during these meetings, a lot of these investors who hadn't bought a bitcoin instrument before, were worried about how the system would work in a downturn. And here they were reviewing the deal during a downturn and seeing zero loan defaults in the middle of a bitcoin drawdown. And that made them feel a lot more comfortable about our processes."
The Ledn co-founder said the bond ultimately ended up three times oversubscribed.
"If we do this right, we believe we have a big opportunity to open up that market, price it correctly, and use that benefit to basically deliver cheaper rates on our loans over time," he said.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The AI boom may follow the path of the 19th-century railway bubble, and builders may not be the ultimate winners
Goldman Sachs analyst Bobby Molavi compared the current situation to the 19th-century British railway mania: 500 companies spent more than the nation's annual income building 8,000 miles of railway, with most early investors losing out, while the real beneficiaries were the later "passengers." He pointed out that the current AI craze is driven by both debt and momentum, and that the S&P 500’s forward P/E ratio of 18x is only "a bit cheaper." Whether the builders can retain value is uncertain, and history does not offer an optimistic answer.
If Anthropic's IPO goes smoothly and the stock price rises next week, then everything remains the same for AI. Otherwise, some companies will go bankrupt.
The shrinking valuations of two major giants have triggered a chain reaction—investors are adopting more conservative revenue multiples for AI startups and are directly halting high-valuation financing for companies with zero revenue. Multiple venture capital firms have advised their portfolio companies to lower valuation expectations and to quickly build up cash reserves. Market participants warn that the outcome of Anthropic’s IPO will be a barometer for the industry: if successful, the boom will continue; if it fails, some companies may face elimination.
After the Brazilian election, political discount deepens; Morgan Stanley remains bullish on Petrobras (PBR.US), focusing on fuel pricing and dividends
Morgan Stanley still maintains its most optimistic "Overweight" rating, but has lowered its year-end 2027 target price from $31 to $25.
Corning (GLW.US) receives initial "Buy" rating from Jefferies! AI factories driving a fiber optic rush, with a potential global supply gap of up to 30%
For Corning, the recent profit growth mainly comes from the expansion of AI clusters. As the number of optical links crossing cabinets and campuses increases, customers need to deploy more optical fibers within limited conduit and cabinet space, thus driving demand for high-density optical cables and connection systems.
Crypto prices
More
