Bitcoin-Backed Loans Allow Holders to Borrow Against BTC Without Selling

Bitcoin-backed loans enable holders to pledge BTC as collateral to borrow dollars or stablecoins, allowing them to access cash for needs like a house deposit or tax bill while maintaining BTC price exposure and potentially avoiding capital gains tax. Loan-to-value ratios typically range from 30% to 70%, and borrowers face margin calls if BTC's price falls sharply. The market has matured since the 2022 lender collapses, with investment-grade securitization and big banks joining, though published rates range from about 5.8% to 14%. Loans are offered through Centralized (CeFi) platforms like Ledn and Decentralized (DeFi) protocols such as Aave.