Bitcoin-Backed Lending Market Could Reach $1 Trillion Within a Decade
Bitcoin-backed loans allow holders to obtain cash using Bitcoin as collateral without selling the asset, meeting liquidity needs while preserving potential upside. Crypto lending platform Ledn believes the growing number of long-term holders and the entry of traditional financial institutions could make such loans an important liquidity tool for asset owners.
A report published by Ledn in 2026 forecasts that the Bitcoin-backed lending market could expand about 300-fold over the next decade to reach $1 trillion by 2036. A survey found that 88% of cryptocurrency holders would consider using collateralized loans, but the current adoption rate is only 14%, with price volatility and regulatory uncertainty remaining the main obstacles.
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The history behind this eventBitcoin-Backed Loans Enter the Capital Efficiency and Cost Debate
Bitcoin holders who also have mortgages, business loans or securities-backed financing can use BTC as collateral to restructure their capital without selling the asset or immediately realizing taxable income. Alec Beckman, Psalion’s vice president for the Americas, said such loans should be compared with HELOCs carrying interest rates above 7% and bridge loans at about 10%–14%. A decline in Bitcoin’s price, however, could still trigger a margin call or liquidation.
CoinDesk published the analysis on May 20, 2026. Psalion’s Bitcoin-backed loans carry a fixed interest rate of 5.5%, a maximum loan-to-value ratio of 60% and a 0.5% origination fee. Ethena’s lending supply on Solana rose from $401 million on May 12 to $1.06 billion on May 16, surpassing $1 billion in four days.
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