Crypto exchange Bybit has partnered with lending protocol Avalon to offer Bitcoin yield to its users.

According to an April 14 Avalon Labs X announcement, the centralized decentralized finance (CeDeFi) protocol will now be a part of the exchange’s yield product, Bybit Earn. Avalon said it will allow the platform’s users to earn yield from Bitcoin (BTC) by arbitrating on its fixed-rate institutional borrowing layer.

Source: Avalon Labs

Avalon Labs announced in March that it raised a minimum of $2 billion worth of credit with possible scaling as the need arises. The product allows institutional borrowers to access USDt (USDT) liquidity without liquidating their Bitcoin holdings at a fixed 8% borrowing cost.

In February, Avalon Labs also announced it was considering issuing a Bitcoin-backed debt-focused public fund. Venus Li, co-founder of Avalon Labs, said at the time that the fund could be issued by leveraging a Regulation A US securities exception:

“We have spent years researching how Regulation A has been applied in traditional finance and whether it could be a viable path for crypto companies. While successful precedents in the crypto industry are limited, our analysis of previous SEC-approved cases suggests a viable path forward.”

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Centralized and decentralized finance unite

Avalon Labs’ product is a CeDeFi protocol, somewhere between decentralized finance (DeFi) and centralized finance (CeFi). This product category — with increased control over capital flows and access — often has advantages in meeting regulatory requirements for integrating with CeFi platforms.

The Bybit Earn integration leverages Avalon Labs’ 1:1 Bitcoin-pegged token FBTC, developed by DeFi protocol Mantle and Bitcoin-centric crypto developer Antalpha Prime. These tokens are then bridged onto Ethereum and other blockchains.

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A multi-protocol system

Avalon Labs’ platform accepts FBTC as collateral and lends it at fixed rates. The borrowed USDt stablecoin is then deployed to high-yield strategies through the Ethena Labs synthetic dollar protocol. The assets employed in those strategies include Ethena USD (USDe) and Ethena Staked USD (sUSDE). The announcement claims:

“Returns are stable, secure, and passed back to Bybit Earn users—making Bitcoin a productive asset while maintaining simplicity and risk control.“

In other words, Avalon Labs serves as a bridge between Bybit and the yield-earning potential of Ethena Labs’ protocol. Avalon Labs describes this as a “CeFi to DeFi” bridge.

The news follows Ethena raising $100 million in late February to deploy a new blockchain and launch a token focused on traditional finance. In January, Ethena also announced plans to roll out iUSDe, a product identical to USDe but designed for regulated financial institutions.

Bybit did not respond to Cointelegraph’s inquiries by publication.

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Michael Saylor’s digital asset firm, Strategy, purchased 3,459 Bitcoin for $285.5 million, signaling continued confidence in Bitcoin even as global markets face trade-related headwinds.

Strategy acquired the 3,459 Bitcoin (BTC) for $285.5 million at an average price of $82,618 per BTC. The purchase brings Strategy’s total Bitcoin holdings to 531,644 BTC, acquired for a cumulative $35.92 billion at an average price of $67,556 per coin, achieving an over 11.4% yield since the beginning of 2025, Saylor wrote in an April 14 X post.

Source: Michael Saylor

The $285 million purchase marks Strategy’s first Bitcoin investment since March 31, when the company acquired $1.9 billion worth of Bitcoin, Cointelegraph reported.

According to data from Saylortracker, the firm is currently sitting on more than $9.1 billion in unrealized profit, representing a 25% gain on its total Bitcoin position as of 12:20 pm UTC.

Strategy total Bitcoin holdings. Source: Saylortracker 

Strategy’s continued accumulation comes despite a broader market pullback and declining appetite for risk assets. The downturn has been largely attributed to uncertainty surrounding global trade policy after US President Donald Trump announced a new round of tariffs.

Trump announced a 90-day pause on higher reciprocal tariffs on April 9, reverting the tariffs to the 10% baseline for most countries, except for China, which currently faces a 145% import tariff.

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This is a developing story, and further information will be added as it becomes available.

The crypto lending market’s size remains significantly down from its $64 billion high, but decentralized finance (DeFi) borrowing has made an over 900% recovery from bear market lows.

Crypto lending enables borrowers to use their crypto holdings as collateral to obtain a crypto or fiat loan, while lenders can loan their holdings to generate interest.

The crypto lending market is down over $43%, from its all-time high of $64.4 billion in 2021 to a total of $36.5 billion at the end of the fourth quarter of 2024, according to a Galaxy Digital research report published on April 14.

“The decline can be attributed to the decimation of lenders on the supply side and funds, individuals, and corporate entities on the demand side,” according to Zack Pokorny, research associate at Galaxy Digital.

Crypto lending key events. Source: Galaxy Research

The decline in the crypto lending market started in 2022 when centralized finance (CeFi) lenders Genesis, Celsius Network, BlockFi and Voyager filed for bankruptcy within two years as crypto valuations fell.

Their collective downfall led to an estimated 78% collapse in the size of the lending market, with CeFi lending losing 82% of its open borrows, according to the report.

While the overall value of the crypto lending market has yet to reach its previous highs, DeFi lending made a significant recovery according to some metrics.

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DeFi borrows grow nearly tenfold

The crypto lending market found its bottom at $1.8 billion in open borrows during the bear market in the fourth quarter of 2022.

However, DeFi open borrows rose to $19.1 billion across 20 lending applications and 12 blockchains by the end of 2024, representing a 959% increase over the eight quarters from the 2022 market bottom.

“DeFi borrowing has experienced a stronger recovery than that of CeFi lending,” wrote Galaxy Digital’s research associate, Pokorny, adding:

“This can be attributed to the permissionless nature of blockchain-based applications and the survival of lending applications through the bear market chaos that felled major CeFi lenders.”

“Unlike the largest CeFi lenders that went bankrupt and no longer operate, the largest lending applications and markets were not all forced to close and continued to function,” he added.

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Meanwhile, outstanding CeFi borrows are worth a collective $11.2 billion, which is 68% lower compared to the peak $34.8 billion combined book size of the CeFi lenders achieved in 2022.

CeFi Lending Market Size by Quarter End. Source: Galaxy Research

The three largest CeFi lenders, Tether, Galaxy and Ledn, account for a combined 88.6% of the total CeFi lending market and 27% of the total crypto lending market.

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