Since it launched in 2018, Ledn has issued more than $11 billion in loans backed by bitcoin, and it expects that total to hit $1 trillion in the coming years. That is an ambitious forecast. What matters more than the number is Ledn’s explanation for it: a growing share of borrowers want the cash for purposes that have nothing to do with trading.
Ledn and SALT Lending are two of the longest-running lenders in this market. Both said loans backed by locked-up bitcoin are now being used to pay tuition, carry people through slow months and meet business cash needs. With bitcoin trading at $83,122.00, many holders are sitting on value they would rather borrow against than sell.
Hunter Albright, chief revenue officer of SALT Lending, described the change: “What I am seeing, both in the conversations I’m having and in the data, is that more people are starting to borrow against their Bitcoin for real-world needs. That includes emergency expenses and larger life decisions, such as funding college tuition or a once-in-a-lifetime trip. We also see people using it to supplement their cash flow.”
A different kind of borrower
SALT began offering bitcoin-backed loans in 2016. Its first customers were miners, the operations that verify blockchain transactions and earn BTC rewards for doing so. It was a small group with a clear reason to want cash without selling the coins they had mined.
The customer base looks different today. Albright said SALT has seen an influx of institutional borrowers, as well as “Gen Xers and baby boomers who own bitcoin and want help understanding the loan process.” Because SALT did not disclose its total historical loan volume, outsiders have no way to measure the size of that shift.
Ledn reports a similar range of clients. “Our borrowers range from traditional investors seeking to get more from their bitcoin position, to entrepreneurs who want to access working capital, to institutional players,” said Adam Reeds, Ledn’s co-founder and CEO.
Wealthy clients and retail clients use the loans very differently. According to Reeds, Ledn’s private wealth clients take out large sums for “larger tickets such as investments, real estate, their businesses or their children’s education.” Retail borrowers take smaller amounts for short-term needs, such as getting through a month when their main income doesn’t cover expenses.
The retail group deserves the closer look. A wealthy client funding a real estate deal is taking one kind of risk. Paying a month of bills with a loan backed by an asset as volatile as bitcoin is a different bet, and the lenders themselves name volatility as the problem they still have to solve.
The point is to never sell
People borrow against BTC mainly to get cash out of a passive holding without selling it and giving up their exposure. Albright said SALT’s core purpose is the same as when it started.
“We don’t believe people should have to sell their most valuable assets to get the value out of it,” he said.
Ledn’s clients think the same way. “People borrow against their bitcoin because they believe it will be worth more in the future, and they also want to be certain they’ll get it back,” Reeds said.
That conviction is also why few of these loans are ever closed out. “Most clients renew their loans, because the whole premise of this type of lending is not selling bitcoin and continuing to hold the position,” Reeds explained.
Albright sees this as wealth strategies moving down to ordinary holders. In his view, tactics that the ultra-wealthy and large corporations have used for centuries are finally becoming accessible. “Now, that is becoming available to a broader group of people based on the asset they own and hold,” he said.
The next battle is over fixed rates
The weak spot in these loans is variable borrowing costs, and SALT is aware of it. The company wants crypto loans to work more like traditional mortgages.
“Our ultimate goal is to have loan products behave much more like a mortgage, where someone can take out a loan, at a fixed rate over a longer term and have greater predictability around the cost of borrowing, even while Bitcoin remains volatile,” Albright said.
Coinbase has already taken a step in that direction. On Sept. 22, it added fixed-rate bitcoin-backed loans to its retail app through Morpho’s Midnight protocol. Users borrow USDC against their bitcoin, with the interest rate and repayment date fixed at the outset. The fixed-rate products sit alongside Coinbase’s existing variable-rate loans on Morpho, which have more than $1.4 billion outstanding against roughly $3 billion in collateral.
Coinbase’s fixed-rate loans have short terms, though. SALT is aiming for much longer ones, and only at that point would the mortgage comparison really fit.
Ledn is looking at gold next
Reeds expects the same collateral model to reach beyond bitcoin. Gold, the traditional safe haven, is already used around the world to raise cash through loans.
“The next stage is lending against hard assets more broadly,” Reeds said, naming precious metals as the logical next step.
“Gold is the obvious next example. It’s a twenty-trillion-dollar asset, yet borrowing against it has largely been an institutional privilege. For most everyday holders, the way to get cash from gold has been to sell it,” he said.
Reeds said Ledn’s customers already draw less of a line between digital and physical assets. “Our clients increasingly think in terms of hard assets they want to hold for the long term, and borrow against rather than sell,” he said.
If you’re thinking about one of these loans to pay tuition or get through a slow month, check the term before you compare rates. A fixed rate protects you only until the loan comes due. The fixed-rate product available today has a short term, and the longer-term version is still a goal for SALT.