Bitcoin Loans
Borrow USD against your Bitcoin without selling. No forced liquidation. No tax event.
How Bitcoin Loans Work
A Bitcoin loan is a line of credit you can open by using your Bitcoin as collateral. You deposit BTC, receive fiat currency (USD/EUR), and repay the loan with interest — your Bitcoin stays in the platform's custody.
The appeal: Long-term Bitcoin holders often need cash for business, living expenses, or opportunities. Instead of selling (triggering capital gains tax), they can take a loan. The interest may be tax-deductible as a business expense.
The risk: If Bitcoin drops sharply, the platform may liquidate your collateral to protect themselves. Loan-to-value ratios (typically 50-70%) protect against small drops, but large crashes are dangerous.
Use Cases
Emergency Cash
Need liquidity without selling? Take a short-term loan and repay when Bitcoin rebounds.
Business Financing
Use Bitcoin collateral to fund operations or investments. Interest may be deductible.
Tax Strategy
Loan interest might be deductible, while a sale would trigger capital gains tax.
Top Bitcoin Lenders
| Lender | Interest Rate | LTV | Terms |
|---|---|---|---|
| Nexo | 7-12% | 50-60% | Instant, flexible |
| BlockFi | 9.5-11.9% | 50% | 6-36 months |
| Unchained | Variable | 50-70% | Flexible |
⚠️ Risk Warning
If Bitcoin drops below the LTV threshold, your collateral may be liquidated. For example:
- You deposit 1 BTC (worth $40k) at 50% LTV
- You borrow $20,000
- If BTC falls to $25,000, your collateral is now worth less than your loan
- The platform may sell your BTC to recover their funds
Only borrow an amount you're comfortable losing.
FAQ
Is the interest tax deductible?
Possibly. Consult a tax professional. In some countries/circumstances, loan interest is deductible as a business expense.
What happens if Bitcoin crashes?
If collateral value falls below LTV, platforms may liquidate your Bitcoin. Set up price alerts.
Can I get a loan without KYC?
No. All regulated lenders require full identity verification.
Related Resources
Bitcoin Tax Guide 2026
Understand tax implications of Bitcoin loans and interest payments.
Bitcoin Insurance
Protect your Bitcoin collateral with self-custody insurance.
Loan Calculator
Calculate payments and total interest on Bitcoin-backed loans.
Multisig Wallets
Secure your Bitcoin with multisig before using it as collateral.
Ready to explore Bitcoin loans?
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