Ledn, a digital lending platform, announced the successful acquisition of the industry’s first $50 million syndicated loan backed by Bitcoin.
Sygnum, a global digital asset banking corporation with $4.5 billion in client assets, syndicates the Bitcoin (BTC) backed loan.
The loan marks an industry first and will “fund the growth of Ledn’s retail lending operations,” according to a press release shared with Cointelegraph.
Adam Reeds, CEO and co-founder of Ledn, explained the team’s future perspective in a written 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.
About the Loan
By collaborating with Sygnum’s institutional clients, Ledn will provide its consumers with enhanced flexibility regarding capital access.
John Glover, the chief investment officer at Ledn, stated in the press release that the partnership with Sygnum is a significant step towards “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 informed Cointelegraph that the loan is “substantially comparable” to how Ledn assists its retail clients in managing their loans.
At certain LTV thresholds, Ledn will be required to top up the loan collateral.
Highest quality Service for institutional Clients
The partnership represents a transition to “fully regulated institutional-grade services,” in which BTC becomes an “increasingly acknowledged” asset class.
The press release describes the objective of the $50 million loan as “establishing a precedent for traditional financial participants.”
Benedikt Koedel, the director 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.”
Implications for institutional investors of BTC and ETH
In an interview with Cointelegraph, Katalin Tischhauser, the chief of investment research at Sygnum Bank, discussed the benefits of exchange-traded funds (ETFs) for traditional institutional investors.
In the initial 12 months of trading, Tischhauser anticipated that BTC ETF inflows would amount to $30 to $50 billion, and Ether (ETH) products would follow.
Tischhauser clarified in the interview that Ether’s value is primarily derived from cashflows and revenues and is “more familiar to traditional institutional investors than the concept of digital gold.”
