Crypto loans are gaining popularity, and banks offering such services are beginning to favor onchain assets as collateral.
Advantages of Onchain Assets
Fabian Dori, chief investment officer at the digital bank Sygnum, notes that banks offering crypto-backed loans prefer onchain assets due to their higher liquidity. This allows lenders to execute margin calls on demand and offer higher loan-to-value (LTV) ratios to borrowers, as collateral can be liquidated in real-time.
Dori said: > "It's actually preferable to have the direct tokens as collateral, because then you can do it 24/7. If you need to execute a margin call on an ETF on Friday at midnight, when the market is closed, then it's more difficult. So, direct token holding is actually preferable from that point of view."
The Crypto Loan Market
Loan-to-value ratios in crypto refer to the total amount of a loan versus the collateral backing the loan. A higher LTV allows the borrower to access more credit relative to their posted crypto collateral, while a lower LTV means smaller loans for the same amount of collateral.
Dori also mentioned that the crypto loan market is still in its infancy, but he is confident that the sector will grow as cryptocurrencies become more widely adopted.
Figure Technology's Nasdaq Debut
The company Figure Technology, focused on crypto-backed lending, made its debut on Nasdaq, with its shares surging by over 24% on the first day of trading. The current market capitalization of the company exceeds $6.8 billion. This news highlights the growing interest of traditional financial institutions in crypto-backed lending, with JP Morgan also considering offering such services in 2026.
With the increasing interest in crypto loans and the growing number of financial institutions accepting cryptocurrencies as collateral, further development of this sector can be expected.
