Crypto-Backed Loans, Explained: How to Unlock Cash Without Selling Your Bitcoin
A crypto-backed loan lets holders borrow cash against Bitcoin, Ethereum, or Solana without selling their assets. The crypto stays owned by the borrower, so borrowing is generally not a taxable sale, though liquidation can create tax consequences. Key factors when comparing lenders are: maximum loan-to-value, fixed vs. variable rates, regulatory/licensing status, and how collateral is handled if prices fall. Figure’s loan is presented as fixed-rate, up to 75% LTV, same-day funding with no credit score required, and available through a licensed lender. Optional liquidation protection can delay price-based liquidations in some states. This type of loan can provide liquidity for long-term holders, but it carries risk if crypto prices drop or payments are missed.
