Galaxy Digital has secured a $500 million warehouse lending facility from Grove to expand its institutional crypto-backed lending business. This marks another step in the adoption of traditional credit structures within digital asset markets.
Under the agreement, Grove will provide the capital that enables Galaxy to originate institutional loans secured by digital assets. Galaxy will then underwrite, service, and manage the lending portfolio.
Grove to finance Galaxy’s institutional lending
The facility applies a warehouse lending model commonly used in traditional finance to crypto-backed lending.
Warehouse facilities provide lenders with lines of credit to finance loan origination before those assets are packaged or refinanced. Under the new arrangement, Galaxy will originate institutional loans backed by digital assets. Grove will supply capital through a dedicated lending vehicle funded in USDS.
According to the companies, the structure is designed to support Galaxy’s institutional lending operations while providing Grove with exposure to a portfolio of overcollateralized crypto-backed loans.
Facility backed by BTC and ETH collateral
The warehouse facility includes several institutional risk controls.
Eligible collateral is limited to Bitcoin [BTC] and Ether [ETH], including natively staked and liquid-staked ETH, with assets held by qualified custodians Anchorage Digital and BitGo.
The underlying loans are overcollateralized. Loan-to-value ratios are monitored continuously using Chronicle price feeds, and concentration limits restrict ETH-backed loans to no more than half of the facility.
The companies said eligible loans must also meet defined underwriting standards. This includes senior secured status, original terms of no more than two years, and regular interest payments.
Partnership builds on earlier tokenized credit deal
The announcement expands an existing relationship between the two firms.
In December 2025, Grove participated in Galaxy’s first tokenized collateralized loan obligation [CLO] with a $50 million investment.
Unlike that transaction, which provided exposure to an existing portfolio of originated loans, the new warehouse facility moves Grove earlier in the credit chain by financing the creation of new institutional loans.
The companies said the structure could support additional institutional crypto-backed lending facilities in the future, subject to further counterparties, approvals, and transaction terms.
Final Summary
- Galaxy Digital has secured a $500 million warehouse lending facility from Grove to finance the origination of institutional loans backed by BTC and ETH collateral.
- The partnership applies a traditional warehouse lending model to crypto-backed credit, building on the firms’ earlier tokenized credit collaboration.
