Warning: this is a BTC bullish website and platform, the content found here provides tools and information for individuals who already understand about Bitcoin potential long-term and believe in the intrinsic appreciation over time. If you are new to the industry and want to learn more, go to WeAreBitcoin.org and educate yourself.
The Power of Bitcoin-Collateralized Loans
It involves using your Bitcoin as security to borrow funds, typically in USD or stablecoins, without selling your cryptocurrency. You lock your Bitcoin with a lender, receive cash, and once you repay the loan, your Bitcoin is returned to you.
Think of it like owning property in Manhattan. As the property's value appreciates, owners can take out loans against that increased value to access cash without selling their prime real estate. Similarly, as your Bitcoin's value rises, you can leverage it to secure funds while retaining ownership and benefiting from its potential growth.
Why Leverage Your Bitcoin?
Instant Liquidity
Access cash for large purchases or investments without selling your Bitcoin and missing out on future gains.
Retain Your Upside
Your Bitcoin remains yours. If its value increases while on loan, that profit is still yours.
Flexible Terms
Some decentralized options, such as Sovryn Zero, advertise 0% interest with flexible repayment, though adoption is still limited.
Potential Tax Advantages
Borrowing isn't a taxable event like selling. Consult a tax professional for advice tailored to your situation.
How It Works: A Simple 4-Step Process
Lock your Bitcoin in a secure smart contract or a trusted party. You must maintain a minimum collateral ratio (e.g., 70% on Binance).
Get funds in USD or stablecoins. The loan amount is a percentage of your collateral's value (Loan-to-Value or LTV).
Your cash is ready to be used for whatever you need a down payment, a new business venture, or diversifying your portfolio.
Repay the loan on your terms. Once repaid, your Bitcoin is fully unlocked and returned to you.
Crucial: Always monitor your Loan-to-Value (LTV) ratio. If your collateral's value drops, you may need to add more collateral to avoid liquidation and fees.
Borrowing vs. Selling: A Real-World Example
Let's see how leveraging can leave you in a better financial position.
You sell 0.5 BTC to get $50,000.
You are left with 0.5 BTC.
If BTC doubles to $100,000.00, your remaining 0.5 BTC is now worth $50,000.00.
You use your 1 BTC as collateral to borrow $50,000.
You still own 1 BTC.
If BTC doubles to $100,000.00, your 1 BTC is now worth $100,000.00. You repay the $25,000 loan (by selling just 0.25 BTC), leaving you with 0.75 BTC worth $75,000.00.
By borrowing instead of selling, you are $50,000 better off. This is how the loan can effectively 'pay for itself' through asset appreciation.
Understand the Risks
This is the most significant risk. If your collateral's value falls below a certain threshold, the lender will sell your Bitcoin to cover the loan. Constant monitoring is essential.
Bitcoin's price is notoriously volatile. Sudden price drops can trigger margin calls, requiring you to add more collateral on short notice.
The crypto space has seen platforms fail (e.g., FTX, Celsius). Choose reputable, regulated, and secure lenders. Do your own research.
Leading Loan Platforms (as of July 2025)
| Platform | Interest Rate | Max LTV | Key Features |
|---|---|---|---|
Sovryn Zero Est. 2021 Adoption Low Risk Medium Type Decentralized | 0% | Up to 90.9% | No credit checks, flexible repayment, decentralized. |
Unchained Est. 2016 Adoption Medium Risk Low Type Hybrid | 14%+ | Varies | Business-focused, high security, distributed keys. |
Ledn Est. 2018 Adoption High Risk Medium Type Centralized | Varies | 50% | Minimum $1,000 collateral, B2X loans. |
SALT Lending Est. 2016 Adoption Low Risk High Type Centralized | Varies | 70% | Licensed, no credit score needed, global coverage. |
Nexo Est. 2018 Adoption High Risk Medium Type Centralized | Varies | Up to 80% | Instant loans, NEXO token rewards. |
Coinbase Est. 2012 Adoption High Risk Low Type Centralized | From 5% | Up to 60% | Loans up to $1M USDC, instant disbursement, no credit checks. |
Binance Est. 2017 Adoption High Risk High Type Centralized | Varies | Up to 65% | Instant approval, hourly interest, not available in U.S./U.K. |
Milo Est. 2021 Adoption Low Risk Medium Type Centralized | Varies | Up to 100% | Crypto-backed mortgages, 100% financing, U.S.-regulated. |
Aave Est. 2020 Adoption High Risk Medium Type Decentralized | Variable or stable | Up to 75% | Decentralized pools, flash loans, credit delegation |