Bitcoin lending market recovers with banks and institutional capital

The Bitcoin lending market is undergoing a serious recovery after the major crashes of 2022, in which BlockFi, Celsius and Genesis went under. That is according to Silicon Valley Bank (SVB) in a new report. The market is now moving towards more institutionalised and transparent structures, with an increasing number of large banks and institutional players entering the space.

Bitcoin is available at OKX and Bybit.

Crypto-backed lending grows sharply to $67 billion

According to figures from Galaxy Research, the total market for crypto-backed lending reached a value of $67 billion in the first quarter of 2026. That is a growth of no less than 49% compared to a year earlier. Several major US banks now offer Bitcoin-backed loans to selected clients, indicating that traditional financial institutions are taking the market seriously.

A notable milestone is the deal by Ledn, which managed to place an asset-backed security worth $188 million. This is the first Bitcoin-backed deal to receive an investment-grade rating from an officially recognised rating agency. Such an assessment shows that Bitcoin loans are increasingly aligning with existing financial frameworks and standards.

Interest rates remain high, but a decline is possible

Interest rates for Bitcoin-backed loans are still relatively high at the moment, somewhere between 7.5% and 16% on an annual basis. That is higher than comparable traditional products. Nevertheless, SVB states that these rates could decline as more banks, private credit funds and institutional capital enter the market and competition increases.

Furthermore, the report points to the role of the Lightning Network as a potential accelerator for the Bitcoin lending market. Thanks to the ability to post collateral, execute margin calls and handle liquidations in real time and at low cost, the Lightning Network can significantly improve the infrastructure for Bitcoin loans and payments. This makes the market more efficient and accessible for both large and smaller players. The Bitcoin price currently stands at $59K, a decline of 0.7% in the past 24 hours.