Fabian Dori, chief investment officer at Sygnum, emphasizes the advantages of using onchain crypto collateral for borrowers. Unlike crypto held in investment vehicles such as ETFs, onchain assets provide greater liquidity, enabling lenders to perform margin calls on demand, and thus, offer higher loan-to-value (LTV) ratios. Dori highlights that having direct tokens as collateral allows for faster execution of margin calls, particularly during off-market hours. As crypto-backed loans evolve, financial institutions are increasingly accepting crypto as loan collateral, suggesting a growing trend in the sector despite previous declines during the 2022 bear market. A higher LTV ratio allows borrowers to access more credit against their crypto, incentivizing the use of these loans as cryptocurrencies gain broader acceptance. Notably, JP Morgan is exploring options for offering crypto-backed loans to clients in 2026, indicating the traditional financial sector's warming to this form of lending, which aligns with the rising popularity of crypto-backed lending on platforms like Wall Street.

Source đź”—