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Bitcoin-Backed Loans · Complete Guide
Borrow Against BTC
Without Selling
Use your Bitcoin as collateral to access cash or stablecoins while keeping full exposure to any future price appreciation.
Cheapest Way to Borrow Against BTC Right Now
Platforms accepting Bitcoin as collateral, sorted by lowest loan rate.
How to Borrow Against Bitcoin: Step by Step
Compare platforms and lock in your rate
Compare BTC loan rates, LTV limits, and origination fees. Pay attention to both APR and origination fee — a low rate with a high fee can cost more than a slightly higher rate with no fee on short-term loans.
View current rates →Create an account and complete KYC
Most CeFi lending platforms require identity verification before you can borrow. This typically involves a government ID and proof of address. Processing takes 24–48 hours. DeFi platforms like Aave don't require KYC but require a self-custody wallet.
Deposit your Bitcoin as collateral
Transfer your BTC to the platform's custody address. Your collateral is locked — you can't spend it until the loan is repaid, but you retain ownership. Verify custody arrangements and any insurance before depositing.
Choose your loan amount and LTV ratio
A 40% LTV on $100,000 BTC means borrowing $40,000. Lower LTV means a lower rate and a larger buffer against price drops. Most experienced borrowers stay at 40–50% LTV to weather corrections without a margin call.
Model your LTV →Receive your funds
Loan proceeds are disbursed in USD, EUR, USDC, USDT, or other stablecoins depending on the platform. CeFi platforms typically fund within 24–48 hours of collateral confirmation.
Monitor your position and repay
If BTC drops significantly, your LTV rises. Most platforms issue a margin call around 75–80% LTV — you'll need to add collateral or make a partial repayment. Set a price alert before that threshold.
Benefits and Risks of Borrowing Against Bitcoin
Benefits
Risks
LTV Safety Guide
How much price drop your collateral can absorb before a margin call
Frequently Asked Questions
Can I borrow against Bitcoin without selling it?
Yes. BTC-backed loans let you use your Bitcoin as collateral to borrow cash or stablecoins while keeping ownership. You get liquidity now and recover your BTC when you repay the loan plus interest.
How much can I borrow against my Bitcoin?
Typically 25–75% of your BTC's current market value, depending on the platform and LTV tier you choose. At $50,000 BTC value and 50% LTV, you'd receive $25,000. Use the loan calculator to estimate any scenario.
What happens to my BTC while it's collateral?
On CeFi platforms, your BTC is held in the platform's custody — usually a regulated third-party custodian. You can't spend or transfer it until the loan is repaid, and you won't receive any yield on it during the loan period.
Is borrowing against Bitcoin taxable?
In most jurisdictions, borrowing is not a taxable event — you haven't sold, so no capital gains are triggered. However, if the platform liquidates your collateral, that may be treated as a sale. Consult a tax professional familiar with crypto.
What if I can't repay the loan?
The platform sells your collateral to recover the loan amount plus interest. Any remaining collateral value is returned to you. Borrow conservatively and maintain a cushion above the liquidation threshold.
Which platform is safest for a BTC-backed loan?
Safety depends on custody arrangements, insurance, and regulatory standing. Read each platform's review and verify their custodial setup before depositing. Compare platforms here.
