Crypto-Backed Loans Unlock Cash Without Bitcoin Sales

Crypto-backed loans allow investors to pledge Bitcoin or other digital assets for cash while retaining ownership and exposure to future price gains. Because borrowing generally is not treated as a sale, it may avoid an immediate capital-gains event, though tax treatment varies by jurisdiction. The trade-off is leverage: a decline in collateral value raises the loan-to-value ratio, potentially forcing the borrower to add assets, repay principal or face liquidation.

As of August 2026, Figure Lending lists a $5,000 minimum and a 12-month, interest-only term. Its published pricing is an 8.91% fixed rate, or 9.999% APR, at 50% LTV, while initial LTV can reach 75%. A 90% LTV triggers automatic liquidation; borrowers facing a margin call generally have 48 hours to cure it, and a 2% liquidation fee may apply in some regions. Prospective customers should compare licensing, custody, rate structure and liquidation rules before borrowing.