Galaxy

Bitcoin

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For most <a href="https://www.thestreet.com/crypto/bitcoin" rel="noopener noreferrer nofollow">Bitcoin</a> holders or HODLers, selling does not feel like taking profit.
It feels like giving up something they spent years holding onto, the asset they kept through the 80% crashes of <a href="https://www.thestreet.com/crypto/markets/veteran-trader-2018-bitcoin-collapse" rel="noopener noreferrer nofollow">2018</a> and 2022. So instead of cashing out, a growing number are borrowing against their Bitcoin and keeping every coin.
Over 88% of holders based in U.S. and Australia said they would consider borrowing against their digital assets, but only 14% currently do. The findings come from <a href="https://www.ledn.io/post/lending-research" rel="noopener noreferrer nofollow">research</a> commissioned by Ledn, a Bitcoin-backed lending platform, which partnered with research firm <a href="https://protocoltheory.com" rel="noopener noreferrer nofollow">Protocol Theory</a> to survey 1,244 crypto holders across the U.S. and Australia.
Ledn calls it the "collateral gap," a 6-to-1 ratio between the people open to borrowing and the people actually doing it.
<h2 id="what-ledn-is">What Ledn is</h2>
Ledn has been making Bitcoin-backed loans since 2018 and says it has crossed more than <a href="https://www.ledn.io/" rel="noopener noreferrer nofollow">$10 billion in loan originations</a>.
Its core product lets a holder pledge Bitcoin as collateral and borrow dollars against it without selling the coins, and it also runs savings accounts, a borrow-to-buy product called B2X, and a trading desk.
Ledn is SOC 2 Type 2 certified, publishes <a href="https://www.ledn.io/proof-of-reserves" rel="noopener noreferrer nofollow">proof-of-reserves</a> and an <a href="https://www.ledn.io/open-book-report" rel="noopener noreferrer nofollow">open-book report</a>, and is a registered virtual asset service provider with regulators in the Cayman Islands and Spain. It also recently issued what it billed as the <a href="https://www.thestreet.com/crypto/markets/ledn-launches-new-first-of-its-kind-bitcoin-backed-abs-with-bbb-rating-from-s-p" rel="noopener noreferrer nofollow">first S&amp;P-rated Bitcoin-backed asset-backed security</a>, carrying a BBB rating.
<h2 id="new-details-emerge-from-the-research">New details emerge from the research</h2>
When Protocol Theory asked the non-borrowers what was holding them back, the answers were about trust, not understanding.
The three most-cited concerns were managing Bitcoin's price volatility, managing liquidation risk, and regulatory uncertainty around crypto-backed loans. Not having enough crypto ranked far below.
Rates and features ranked below trust signals: risk-management practices, reputation, clarity of terms, ease of use, and track record were what mattered most.
<blockquote>
 "Bitcoin is now held by tens of millions of people, managed by regulated institutions, and covered by major ratings agencies — yet collateralised borrowing against it is still in very early innings compared to any traditional asset class of this size," said Mauricio Di Bartolomeo, co-founder of Ledn. "The demand side of the equation is solved. What's still catching up is the trust infrastructure that gives borrowers the confidence to act."
</blockquote>
<h2 id="why-holders-borrow-instead-of-sell">Why holders borrow instead of sell</h2>
The 14% who do borrow are not accessing emergency cash.
The research describes a financially sophisticated group, comfortable with leverage and accumulating for the long term. Among current crypto-loan users, 62% are buying more Bitcoin and just 1% are selling.
The logic is the same one behind margin loans on stocks and home equity lines on property, which is to unlock cash without giving up the asset.
In the survey, 72% agreed that crypto-backed loans give them convenient access to funds without needing to sell. Taxes reinforce it, since selling Bitcoin usually triggers a capital gains bill while borrowing against it generally does not. (Tax treatment varies by jurisdiction, and this is not tax advice.)
Over five of the past six years, Bitcoin has outpaced those borrowing costs by a wide margin, so a holder with conviction treats the interest as the price of staying invested. Ledn's Di Bartolomeo said that calculus holds even for the wealthiest clients.
<blockquote>
 "High-net-worth clients with access to Morgan Stanley and traditional banking still choose crypto-native lending, not because it's cheaper, but because it fits how bitcoin actually works." added&nbsp;Di Bartolomeo.
</blockquote>
<h3 id="trending-on-thestreet-roundtable">Trending on TheStreet Roundtable</h3>
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<h2 id="still-tiny-next-to-traditional-lending">Still tiny next to traditional lending</h2>
The broader crypto lending market hit a record $73.6 billion in the third quarter of 2025, <a href="https://www.galaxy.com/insights/research/crypto-leverage-q3-2025-defi-cefi-lending-digital-asset-treasury-debt-futures-perpetuals" rel="noopener noreferrer nofollow">according to Galaxy Research</a>.
That is a fraction of the collateralized borrowing that happens against traditional assets of similar size, margin lending against equities alone runs into the trillions, and mortgages make up the bulk of U.S. household debt.
Crypto, by that measure, is the only major asset class where collateralized borrowing has not scaled with the holdings. Ledn's argument is that the trust infrastructure is starting to catch up, pointing to the first S&amp;P-rated crypto-backed securities, standardized proof-of-reserves programs, and clearer rules taking shape in the U.S. and Europe.
<h2 id="a-regional-split">A regional split</h2>
The survey also found a divide between the two markets.
Australian holders were more likely to borrow proactively as part of their financial planning and to compare lenders before choosing one, which the report links to a more fragmented Australian market where no single platform dominates.
While U.S. holders, by contrast, showed a more measured borrowing posture, with trust-building and confidence playing a bigger role in conversion.
<a href="https://www.thestreet.com/crypto/markets/bitcoin-crash-wipes-out-billions-in-market-rout" rel="noopener noreferrer nofollow">Related: Bitcoin crash triggers billions in liquidations</a>

New research finds a 'collateral gap' in Bitcoin lending

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