On Aug. 20, Ledn, a digital lending platform, announced the successful acquisition of a $50 million syndicated loan backed by Bitcoin.
The Bitcoin (BTC) backed loan is syndicated 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 marks an industry first and will “fund the growth of Ledn’s retail lending operations.”
In a written Q&A with Cointelegraph, Adam Reeds, CEO and co-founder of Ledn, explained the team’s future perspective:
“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 ETFs may struggle — Sygnum Bank
Loan details
The collaboration involving Sygnum’s institutional clients will enable Ledn to offer its customers improved flexibility when accessing capital.
In the press release, John Glover, chief investment officer at Ledn, stated that the partnership with Sygnum is a significant step for “integrating crypto assets into mainstream financial markets.”
“Partnering with Sygnum to secure the first Bitcoin-backed syndicated loan facility is a landmark achievement for Ledn.”
Reeds told Cointelegraph that the loan is “very similar” to how Ledn guides its retail clients in loan management.
“At certain LTV thresholds, Ledn will be required to top up the loan collateral.”
Related: Bitcoin lender Ledn to roll out ETH, USDT interest accounts
Institution-grade services
The partnership marks a shift toward “fully regulated institutional-grade services,” in which BTC is becoming an “increasingly acknowledged” asset class.
According to the press release, the $50 million loan aims to “establish a precedent for traditional financial participants.”
Benedikt Koedel, head of credit and lending at Sygnum, explained the implications for institutional services:
“With the first Bitcoin-backed syndicated loan from a fully regulated bank, Sygnum is excited to support Ledn’s future growth and kick-start a new market for institutional lenders and borrowers as the crypto ecosystem matures.”
Related: Solana ETFs will not see significant demand — Sygnum research head
BTC, ETH implications for institutional investors
Katalin Tischhauser, head of investment research at Sygnum Bank, spoke with Cointelegraph about the advantages of exchange-traded funds (ETFs) for traditional institutional investors.
Tischhauser predicted that BTC ETF inflows would reach between $30 and 50 billion within the first 12 months of trading, and spot Ether (ETH) products would follow.
In the interview, Tischhauser explained that Ether primarily derives its value from revenues and cashflows and is “more relatable for traditional institutional investors than the concept of digital gold.
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