Tether makes strategic investment in Ledn to expand bitcoin-backed lending market

Tether has made a strategic investment in bitcoin-backed lending platform Ledn — a move aimed at expanding individual and business access to credit without requiring borrowers to sell their digital assets.

Ledn operates a custody, risk management, and liquidation system designed to keep client assets secure throughout the life of each loan. The company has originated more than $2.8 billion in bitcoin-backed loans since its founding, including over $1 billion so far this year.

In the third quarter alone, Ledn originated a record $392 million in loans, nearly matching its entire 2024 volume, and reported more than $100 million in annual recurring revenue — underscoring growing demand for bitcoin-backed lending products.

By enabling borrowers to use bitcoin as collateral rather than sell it, the firms say they are opening new pathways for wealth preservation, financial resilience, and additional use cases.

"This approach strengthens self-custody and financial resilience, while creating real-world use cases that reinforce the long-term role of digital assets as essential pillars of a more inclusive global financial system," Tether CEO Paolo Ardoino said in a statement shared with The Block, without disclosing the size and further details of the investment.

Growing market for crypto-backed credit

The crypto lending niche suffered significant setbacks following a tumultuous year for centralized services in 2022 — a period that saw the bankruptcy of firms like BlockFi, Celsius, Genesis, and Voyager Digital.

Following those events, it remained unclear to what extent users would trust such services going forward. Ledn co-founder and CSO Mauricio Di Bartolomeo previously told The Block the company survived the period because of its "sound risk management program" and "prioritization of the safety and security" of its clients' assets.

More recently, the firm said the key to its staying power comes down to its simple, transparent, and compliant approach — maintaining a fully collateralized model, conducting regular third-party Proof of Reserves attestations, and operating through regulated VASP entities.

Now, Tether's investment comes as the broader crypto-backed lending market is projected to expand significantly. According to a report from Data Intelo, the sector could grow from an estimated $7.8 billion in 2024 to more than $60 billion by 2033, driven by rising demand for alternative forms of credit that use digital assets as collateral.

"We expect demand for bitcoin financial services to continue soaring, and this collaboration with Tether ensures that Ledn remains well-positioned to lead as the market continues to evolve and grow," Ledn co-founder and CEO Adam Reeds said on Tuesday.