Crypto's Collateral Gap: What 1,200+ Holders Told Us About Borrowing Against Digital Assets

New research from Ledn and Protocol Theory quantifies the gap between demand for crypto-backed lending and actual adoption — and identifies what is holding borrowers back.

The gap

We partnered with Protocol Theory, a strategic research and consumer insights firm focused on the future of money, technology, and digital markets, to survey 1,244 cryptocurrency holders across the United States and Australia. We wanted to answer a simple question: if crypto is now a multi-trillion-dollar asset class, why isn't collateralised borrowing against it scaling the way it has for every other asset class of comparable size?

The answer isn't what most people assume.

88% of the crypto holders we surveyed said they would consider borrowing against their digital assets. Only 14% currently do. That is a 6-to-1 consideration-to-adoption ratio between general openness to borrowing and current usage of crypto-backed loans.

It's not comprehension. It's confidence.

When we asked non-users what is stopping them, the barriers were overwhelmingly trust-related, not knowledge-related. The three most commonly cited concerns were managing crypto price volatility, managing liquidation risk, and regulatory uncertainty around crypto-backed loans. Insufficient crypto holdings ranked far below.

When asked what drives their choice of lending platform, rates and features ranked below trust signals. Respondents pointed to risk management practices, platform reputation, ease of use, clarity of terms, and track record as the factors that matter most.

Context: how crypto compares

Collateralised borrowing is a well-established feature of traditional financial markets. Margin lending against equities runs into the trillions. Mortgages account for the majority of US homeowner debt. The broader crypto lending market reached a $73.6 billion all-time high in Q3 2025, according to Galaxy Research — but this figure remains a fraction of the collateralised borrowing that takes place against traditional asset classes of comparable size.

Crypto is, by this measure, the only major asset class where collateralised borrowing hasn't scaled with the holdings.

"Bitcoin is now held by tens of millions of people, managed by regulated institutions, and covered by major ratings agencies — yet collateralised borrowing against it is still in very early innings compared to any traditional asset class of this size," said Mauricio Di Bartolomeo, co-founder of Ledn. "The demand side of the equation is solved. What's still catching up is the trust infrastructure that gives borrowers the confidence to act."

Who is borrowing — and why

The 14% who do borrow are a financially sophisticated cohort. They are actively managing crypto positions, comfortable with leverage as a financial tool, and accumulating for the long term.

These are not borrowers accessing emergency liquidity. They are using loans to unlock capital without selling long-term positions — the same logic that drives margin lending in equities and home equity lines in real estate. The research found that 72% of crypto holders agree crypto-backed loans provide convenient access to funds without needing to sell their crypto, reinforcing the role these products play in helping holders access capital while maintaining market exposure.

US vs. Australia

The research also found notable regional differences. Australian crypto holders were significantly more likely to borrow proactively as part of financial planning than their American counterparts, and more likely to compare lenders before choosing. The Australian market is more structurally fragmented, with no single platform dominating — suggesting more active shopping across providers.

What this means

The data suggests crypto-backed lending is at an infrastructure inflection point. Demand is not the constraint — 88% stated consideration makes that clear. What is lagging is the institutional trust infrastructure that gives borrowers the confidence to act: transparent terms, clearer liquidation protections, stronger custody and risk-management proof points, and greater regulatory clarity.

As those elements mature — and we are seeing the early stages now, with the first S&P-rated crypto-backed asset-backed securities, standardised proof-of-reserves programmes, and clearer regulatory frameworks across the US and Europe — the 6-to-1 gap has significant room to close.

Methodology

The research was conducted by Protocol Theory, a strategic research and consumer insights firm focused on the future of money, technology, and digital markets. The study surveyed 1,244 cryptocurrency holders aged 18+ across the United States (n=621) and Australia (n=623) between 19–24 February 2026, examining attitudes toward crypto-backed lending, borrowing behaviour, platform selection criteria, and barriers to adoption.

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See the full report here.