How Ledn is appealing to bitcoin holders with asset-backed loan options

Following the catastrophic collapse of many crypto lending platforms in 2022, projects aimed at transforming how investors use their digital assets are beginning to re-emerge.

By offering cryptocurrency holders a way to unlock their value without selling their cryptocurrencies, Ledn aims to succeed where others like BlockFi and Celsius have failed, with a new approach to financial management.

Ledn co-founder Mauricio Di Bartolomeo joined Roundtable host Rob Nelson in a recent discussion to explore how the company’s lending services are opening up new possibilities for Bitcoin holders around the world.

Nelson begins the conversation by saying that a common challenge for bitcoin holders is accessing the value of their assets without selling them. He likens it to having a vault full of gold that is valuable but untouchable unless sold, which would reduce the overall value of the asset. Ledn solves this problem by offering bitcoin-backed loans, allowing holders to borrow against their crypto and retain the potential for appreciation.

Mauricio explains that Ledn’s service is simple yet powerful. Bitcoin holders can use their crypto as collateral to secure dollar loans, like borrowing against the value of a house. This method preserves bitcoin’s upside potential, allowing investors to meet their financial needs without sacrificing their long-term returns.

While asset-backed lending is nothing new, Ledn’s focus on bitcoin makes it unique. After struggling to get loans against their bitcoin from traditional banks, Mauricio and his co-founder Adam realized there was a gap in the market. This realization led them to create Ledn, which has since become a pioneer in the crypto lending space.

Today, Ledn’s approach is gaining traction even among traditional financial institutions. Initially skeptical banks are partnering with Ledn as cryptocurrencies become increasingly accepted in mainstream finance. This partnership is particularly valuable in regions like Latin America, where traditional financial services are limited and bitcoin plays a critical role in personal finance.

Ledn’s loans cater to a wide range of needs, from starting a business to covering everyday expenses. The loans are flexible, ranging from $500 to $2 million, and are transferable if the collateral remains healthy. Mauricio argued that the interest rate, currently around 14% per year, is competitive when compared to the historical gains of holding bitcoin.

It’s worth noting that crypto lending is never without its own risks. Legacy crypto lenders like BlockFi, Voyager, and Celsius filed for bankruptcy protection after crypto prices crashed in 2022. Many users who hadn’t even gotten into credit saw their assets wiped out as companies became overexposed to counterparties who couldn’t repay their loans.

Nelson concluded the discussion by emphasizing the appeal of Ledn’s services to some users. By borrowing bitcoin instead of selling it, investors can avoid significant tax liabilities and potentially offset the cost of the loan with the asset’s appreciation. When this strategy works, it gives bitcoin holders access to liquidity while still being exposed to the und