Bitcoin lending is entering a new institutional era, according to Silicon Valley Bank
The bank said bitcoin lending has emerged from the 2022 crypto credit collapse with stronger risk controls, growing institutional participation and a path toward lower borrowing costs.
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Summary
- Silicon Valley Bank said bitcoin lending has shifted toward overcollateralization, transparency and institutional risk management following the failures of BlockFi, Celsius and Genesis.
- Institutional momentum is building as banks expand bitcoin-backed lending, crypto-backed loans reach $67 billion, and Ledn completes the first investment-grade-rated BTC-backed ABS.
- More bank and private credit capital could drive borrowing costs lower, while the Lightning Network may improve the speed and efficiency of bitcoin-backed lending, the report said.
