LEDN – a global Bitcoin lending platform based in Toronto – has announced a first-of-its-kind Bitcoin-backed mortgage product. This follows a $70 million Series B funding round which now puts the company’s valuation at $540 million.
Mortgages Backed by Bitcoin
As revealed by LEDN, this funding round was led by 10T Holdings and included new investors such as Raptor Group, Golden Tree Asset Management, and FJ Labs. Furthermore, Dan Tapiero – CEO and Managing Partner of 10T Holdings – plans to join LEDN’s board of directors.
The new funds will be used for a variety of purposes, including strengthening LEDN’s balance sheet and supporting its new bitcoin-backed mortgage product. The mortgage will allow borrowers to provide an equal mix of Bitcoin and real estate as collateral for their loan so that they aren’t forced to sell their crypto stack.
This structure is designed to use the “stability” of real estate as a buffer against Bitcoin’s current volatility. Indeed, the primary cryptocurrency fell 14% last week, spurred precisely by a liquidation cascade of $2.5 billion.
Adam Reeds – co-founder and CEO of LEDN – recognized the limited opportunities Bitcoin HODLers had for qualifying for mortgages.
“Our clients want to diversify their portfolio in order to protect their wealth and then utilize that wealth for instances such as purchasing a home, but one should not come at the expense of the other,” he said regarding the product.
LEDN has seen substantial growth in the past year, increasing its asset holdings on the platform to $1.7 billion – a 4000% increase from Q3 of 2020. Meanwhile, its user base increased by 10X.
LEDN currently offers Bitcoin and USDC borrowing/savings products. It allows people to secure funding without a credit score, instead using overcollateralized Bitcoin loans to ensure profit with every customer. Using a LEDN account, users can earn over 6% APY on their first 0.5% Bitcoin, and 9.5% APY on any amount of USDC. These rates change monthly, however.
Thus far, the platform has become remarkably popular with Latin American investors, which represent 44% of its client base.