As of June 7th, 2021, we have cut our monthly interest rates for newly opened Bitcoin-backed Loans and B2X from 1% to 0.79% making our annual interest rate  9.5% (+ our typical 2% admin fees). 

Just like our savings rates, our loan rates adjust to market conditions. Here are a few reasons why we have been able to make this favourable change:

More USDC in search of yield: 

The market capitalization of stablecoins has grown by more than 3X, resulting in an increase in the balances on our USDC Savings Accounts. This means that there is more USDC looking to earn interest available at Ledn and other institutional venues. This growth in supply has made financing for Bitcoin-backed loans more easily available resulting in lower rates for our clients. 

More institutional investors looking to finance bitcoin-backed loans:

Ledn’s 0% loan loss ratio, scale, and operational track record makes Ledn an extremely attractive counterparty to numerous financial institutions. As a result, several industry players now compete and bid to finance our book at a lower cost of capital. Ledn can take advantage of these market conditions to negotiate better rates and terms from institutions, and pass on these benefits to our clients. 

Compression in alternative market opportunities:

The Bitcoin markets used to be full of high-yielding market-neutral trades. However participants have caught on to the trade making what was once a 20% yield to what is now trading between zero and five percent. As a result, high-single digits interest for lending against bitcoin is more attractive.

At Ledn, we will continue to pass on the best rates to our clients while ensuring they are sustainable for our ongoing operations. Thank you for your continued support, and enjoy the lowered rates.

Have questions? Contact us at support@ledn.io

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