Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets
Crypto lending sector is making a comeback thanks to spot bitcoin ETFs and customers getting their assets back from bankrupt companies, Ledn's co-founder said.Citi's Exploration Into Crypto and the Metaverse
Crypto lending is akin to conventional banking. Customers deposit bitcoin or other cryptocurrencies with a company like Ledn, and earn interest or use that crypto to back loans. The interest paid to depositors is generated by lending their crypto to others and charging them interest. "Bitcoin has gone up from $20,000 to $70,000 and has become the focus of the political race in the U.S.," he said."So that means there's more interest, there is real product market for bitcoin as an asset and for bitcoin as a collateral for lending."more than $690 million in loans in the first quarter, its most successful quarter since its inception in 2018.
When asked why this is the case, he explained that for most of these users, their investment thesis – if you hold them long enough, you will get an appreciation of wealth – has been playing out despite the market downturns. These users were"kneecapped" by some bad actors, but as they start to get their assets back, many of the"hardcore users" won't likely sell, he said.
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