Unlocking Bitcoin’s Potential: The Rise of Bitcoin-Backed Loans

Welcome to FinTech TV, I'm Remy Blair.

While the Bitcoin credit market is moving into a period of institutional-grade maturity, Bitcoin-based loans are a key part of this market as they do allow investors to use their stack to receive cash without selling their Bitcoin.

S&P Global Ratings assigned an investment-grade rating to Leden's Bitcoin backloans, and by proving that Bitcoin can be reliable collateral even in a crash platforms like Leden, have helped turn Bitcoin from a speculative asset into a standard financial building block.

Well, joining me live here in Miami is Adam Reeds, co-founder and CEO of Ledn.

So thank you so much for joining me, Adam.

Of course.

Good to see you again, Remy.

Thanks for having me on.

Well, great to have you here in Miami.

So first, tell us why you did this when it comes to the rating.

Sure.

So, you know, as a platform that's been doing Bitcoin back lending for eight years, we really spend a lot of time forecasting and making sure we have enough capital to lend out, of course.

And so we're looking at the projections and analogy that I often like to make is Bitcoin back lending may develop like the residential mortgage market.

And in the US, 60% of homes have a mortgage on them.

And so when we look at the current market cap of Bitcoin being about one and a half trillion, if 60% of that asset class needs a mortgage, That's a trillion dollars of capital.

And looking around, the only market that could support that amount of capital is the asset-backed securitization market.

In the U.S. last year, about $500 billion of securitization was done.

Globally, it's about double that as well.

So again, that size of market is what we need to support.

And so we tapped S&P Global as one of the premier rating agencies to take on creating our first ABS structure.

And Adam, we are here at ConsenSys.

You just came from Bitcoin 2026 in Vegas, and you and I were talking about where we are in the Bitcoin cycle.

So I understand that there are a lot of use cases for Bitcoin and everybody has an opinion when it comes to this crypto major.

So tell us about Bitcoin as collateral.

Yeah, I mean, the exciting thing about Bitcoin is it's the same thing to everybody.

And so because of that, it makes it the most pristine collateral there is.

I mean, I love using gold as an analogy, even though Bitcoin gets compared to gold and being digital gold, gold, because it's physical, has to be jurisdictional.

So if I try to finance gold in Argentina and walk it into my local bank in Argentina, I'm going to get different rates and terms than gold in, say, Switzerland, you know, the premier place to store gold.

So what's great about Bitcoin is, again, it's the same no matter where you have it.

So for that reason, we can offer financing terms the same where we had it.

The ABS that we did was actually the first ever bond structure that treated non-American borrowers the same as American borrowers, which was really groundbreaking for us because now we have something that can really pass on equal rates to everybody no matter where they are.

And Adam, for the layperson who is watching this right now, how would you explain Bitcoin credit markets?

Yeah, I mean, I think when we were explaining it to investors on a roadshow, we really just thought about trying to change one variable at a time.

So let me make a comparison to auto loans, right?

So, you know, how is auto loans done?

Well, your individuals go by the car, they sign a loan agreement, they do a credit score, they have a loan agreement.

And then, of course, the car is, you know, being used in the environment.

And there's companies behind that that want to earn yield that are financing those types of auto loans.

In our case, instead of a car, it's Bitcoin.

But the better thing about Bitcoin is actually sits in the garage of the lender.

Right.

So we have the custody of it, which provides far better asset protection.

So what's interesting is like we're drawing these other comparisons to traditional assets.

But Bitcoin, in our view, is far better collateral for these types of loans.

And with opportunity comes risk.

So Adam, I do have to ask you, when it comes to the risks for Bitcoin-backed loans, how are investors protected?

Sure.

So the biggest risk is definitely the volatility.

But it's always, you know, what type of slippage would occur if you try to execute and trade the asset that you've taken collateral of, right, or taken security of, excuse me.

So, you know, again, drawing a real estate comparison is real estate is far more stable collateral from a pricing perspective, but it takes a long time to sell real estate.

There's also repossession risk.

You know, you have to step into the, you know, get, you know, work with the courts to take that home, you know, then list it.

And so, you know, it's all about the time from when you need to realize on collateral to the time to sell that collateral to protect the principle that you've loaned out.

What I love about Bitcoin is, again, although the price may be moving, The time to execute is seconds.

So when we need to sell Bitcoin, we can get it done and there's tons of liquidity in the market.

There's far more liquidity than the amount of loans that stand today.

So ample protection for lenders that are interested in participating.

And Adam, I'm glad you highlighted that because when it comes to alternative assets, there's always that question of liquidity.

So thank you so much for breaking that down.

So finally, before I let you go, I do want to ask you about security.

Give us your perspective on security when it comes to crypto.

Sure.

So the thing that's developing is there's really two types of ways to store Bitcoin, right?

There's the technical custody of it, which is how do you keep effectively the passwords behind Bitcoin with the industry cause private key is offline.

And then there's the legal custody of it.

You have the right to move that.

Right.

So we worked with on the bond.

We worked with Fidelity being one of the premier name brands in TradFi.

They've been working and building up Bitcoin custody for many years.

They were one of the first to do it.

So we wanted to pick one of the premier custodians to store Bitcoin and keep it safe.

And that's the premier security that we have behind that.

In addition to that, we also have traditional loan agreements.

It's really not that different than an auto loan or a mortgage.

There's a piece of paper behind that that says that the borrower is required to pay us back.

So you have the loan agreement, you've got the collateral, it's protected.

There's lots of work behind the scenes to do that.

And that's how we put it all together.

Well, Adam, it was great having you join us here at Consensus 2026.

So thank you so much for joining us and thank you so much for breaking all of it down.

Thank you.

Appreciate it.