Ledn Goes Bitcoin Only, Dumps Ethereum
Retreat signals growing institutional preference for Bitcoin collateral over Ethereum in traditional lending markets
Ledn, one of the world's largest cryptocurrency lenders, is abandoning Ethereum entirely to focus solely on Bitcoin. A shift that highlights the growing divide between the two dominant digital assets in institutional finance.
Founded in 2018, Ledn positioned itself as a pioneer in Bitcoin-backed lending, underwriting Canada's first Bitcoin-secured loan and recently announcing what it called the world's first Bitcoin-backed mortgage.
The company added Ethereum support in February 2024 to meet broader market demand, but the asset never gained significant traction among its client base.
Ledn's loan book has grown to $9.9 billion in total volume since inception, with Bitcoin representing the overwhelming majority of that activity.
The Canadian company, which manages a $550 million loan book, announced it will discontinue all Ethereum-backed lending services effective July 1, less than 16 months after adding support for the world's second-largest cryptocurrency.
The decision reflects usage patterns that may surprise crypto enthusiasts.
Despite Ethereum's prominence in decentralised finance and its $300 billion market capitalisation, Bitcoin accounts for more than 99% of Ledn's client activity.
"We're returning to our Bitcoin-first roots, this isn't just about market dominance — it's about aligning with Bitcoin's founding principles." said Adam Reeds, Ledn's co-founder and chief executive, in an interview with Cointelegraph.
The move comes as Ledn transitions to what it calls a "fully custodied" model, ensuring client collateral is never rehypothecated or lent out to generate additional yield.
The approach directly addresses concerns that led to the spectacular 2022 collapses of crypto lenders Celsius and BlockFi, which left billions in client funds frozen.
Industry analysts view Ledn's decision through the lens of institutional risk management rather than crypto tribalism. Bitcoin's lower volatility compared to Ethereum, and clearer regulatory status in many jurisdictions which makes it more attractive as loan collateral.
As Bitcoin trades near $109,000, institutional appetite for crypto lending remains strong despite market turbulence.
Ledn also plans to retire its "Growth Accounts" for both Bitcoin and Ethereum, which offered yields up to 4% annually, to focus exclusively on collateralised lending.
Ledn's shift mirrors moves by other institutional crypto lenders.
Two Prime, another prominent platform, recently dropped Ethereum support in favour of Bitcoin-only services.
The convergence suggests that in traditional lending applications, Bitcoin has achieved something Ethereum hasn't: widespread institutional confidence as stable collateral.
For Ethereum holders who used Ledn's services, the change means seeking alternative platforms in an increasingly competitive landscape. The decision may also signal challenges for Ethereum's role in traditional financial services, even as it dominates in decentralised applications.
Regulatory clarity also plays a role.
Bitcoin faces fewer regulatory uncertainties than Ethereum, which the Securities and Exchange Commission has at times suggested might qualify as a security under certain circumstances.
While retail crypto traders often view Bitcoin and Ethereum as complementary, institutional lenders appear to see meaningful differences in their utility as collateral.