Bitcoin Lending Market Rebounds as Banks and Institutional Capital Step In: SVB

The Bitcoin-backed lending market is regaining momentum after the 2022 collapse of major crypto lenders, including BlockFi, Celsius, and Genesis, with the sector becoming more institutional and transparent, according to a new report from Silicon Valley Bank.

Citing Galaxy Research, the report said crypto-backed lending grew to $67 billion in the first quarter of 2026, up 49% year over year, reflecting the market's continued recovery.

As institutional participation increases, several major U.S. banks have started offering Bitcoin-backed loans to select clients. While borrowing rates remain between 7.5% and 16%, Silicon Valley Bank said greater competition from banks, private credit firms, and institutional investors could gradually reduce financing costs.

The report also highlighted the Lightning Network as a potential improvement to Bitcoin lending infrastructure, stating that it could enable real-time collateral posting, margin calls, and liquidations, making lending operations more efficient.

Source: Silicon Valley Bank