Using Bitcoin as collateral to access cash has become one of the most useful tools in modern financial services. Instead of selling your Bitcoin and triggering a taxable event, a cryptocurrency loan allows you to borrow against your crypto assets while keeping long-term exposure.

This guide explains how Bitcoin loans work, the risks to consider, and how to decide whether borrowing against your crypto is the right move.

What Is a Bitcoin-backed loan?

A Bitcoin-backed loan is a crypto-backed loan that allows you to deposit your BTC as collateral in exchange for cash. You keep ownership of your Bitcoin, but the lender holds it securely for the duration of the loan.

This type of cryptocurrency loan is similar to a secured personal loan in traditional financial services—your Bitcoin acts as the security. Once the loan is repaid, your BTC is returned to you.

Why people choose Bitcoin loans

Access cash without selling your Bitcoin
Avoid triggering capital gains taxes
Maintain upside exposure to your crypto assets
Get fast approval with no credit check

How a Bitcoin loan works

Here’s a simplified look at the process:

1. Select your loan term

Most lenders let you choose a loan term ranging from a few months to several years. Longer terms mean lower monthly payments. At APX, we provide generous terms to our borrowers, from 3-60 months.

2. Deposit your Bitcoin as collateral

Your BTC is placed into a secure custodial wallet. At APX, collateral is stored in insured, segregated custody.

3. Choose your payment structure

Borrowers can select:

Interest-only monthly payments, or
Amortized monthly payments where the loan principal is gradually paid down

4. Receive your funds

Funds are transferred quickly. With APX, borrowers can access cash in minutes or within 24 hours, depending on whether they choose CAD or USDC.

5. Repay and reclaim your Bitcoin

Once the loan is fully repaid, your BTC is released back to your wallet.

Understanding loan-to-value (LTV)

Loan-to-Value (LTV) determines how much you’re allowed to borrow. For example, at a 40% LTV, depositing $10,000 worth of Bitcoin allows you to borrow $4,000.

Common crypto loan LTV tiers

20% LTV – most conservative, lowest risk
30–40% LTV – standard for many borrowers
50–60% LTV – higher risk, may require quicker response to price swings

Higher LTV = larger loan, but also higher liquidation risk. For context, at APX we offer LTVs from 20% - 60%, among the most generous in the industry.

Risks of Bitcoin loans

Bitcoin loans are powerful tools—but they come with specific risks you should understand.

1. Price volatility

If the price of your Bitcoin falls, your LTV increases. You may need to:

Add more collateral
Make a payment to rebalance LTV
Or risk liquidation

2. Liquidation risk

Lenders issue margin calls when LTV becomes too high. If you don’t respond in time, your collateral may be sold. For a more in-depth look at LTVs and liquidation, check out this primer.

3. Interest rate changes

Rates differ across crypto-lending platforms. For instance, in Canada we offer a flat 12.99% APR. In the U.S., our rates are tiered and depend on your loan size.

4. Platform risk

Always choose a regulated lender with insured, segregated custody. Crypto loan safety depends heavily on the platform’s operational structure and compliance standards.

Benefits of borrowing against your Bitcoin

No credit check

Bitcoin-backed loans rely on your crypto assets—not your credit score.

Keep your long-term exposure

You maintain upside if Bitcoin appreciates.

Avoid taxable events

Borrowing lets you unlock liquidity without selling, which avoids capital gains.

Fast approvals and simple process

Most applications take minutes, and funds are available quickly.

Is a Bitcoin loan right for you?

A Bitcoin loan may be a good fit if:

You believe in Bitcoin's long-term value
You need liquidity but don’t want to sell
You want predictable monthly payments
You prefer a credit-check-free financing option

It may not be right if:

You can’t monitor changing LTV levels
You’re uncomfortable with potential liquidation
You need fixed interest over long periods

How APX Lending delivers a safer Bitcoin loan experience

APX Lending is an authorized, transparent crypto loan platform built for serious holders.

Why APX stands out

Insured (up to $250 M), segregated custody for all crypto assets (with BitGo Trust)
Regulated with FINTRAC, FinCEN and SOC 2 attestation
Flexible loan terms (3–60 months)
Interest-only or amortized payment options
Fast access to cash in minutes
Fully transparent LTV monitoring

Borrowers can view collateral on-chain at all times and maintain full visibility into their loan performance.

Bitcoin loan vs. Traditional loan

Here Bitcoin loans compare to traditional loans:

Feature	Bitcoin loan	Traditional loan
Approval process	Based on BTC collateral	Based on credit score and income level
Funding time	Nearly instant with USDC, typically within minutes with the rest	Days to weeks
Credit check	Not required	Always required
Interest rate	Varies from lender to lender but 9.99% to 12.99% at APX Lending	Varies widely
Asset exposure	Keep your bitcoin	No asset exposure
Regulation	Depends on lender	Fully regulated banks

Final thoughts

Bitcoin-backed loans offer a flexible way to access liquidity while holding onto your most valuable crypto assets. Whether you’re looking to fund an investment, cover expenses, or unlock capital without selling, a cryptocurrency loan can be a powerful financial tool when used responsibly.

If you want to borrow against your Bitcoin safely and transparently, explore APX Lending’s Bitcoin loan options today.

Frequently asked questions about Bitcoin loans

How fast can I get a Bitcoin loan?

At APX Lending, more than 95% of borrowers receive funds within 24 hours.

Do Bitcoin loans affect my credit score?

No. Since your loan is backed by crypto collateral, no credit check is required.

What happens if Bitcoin’s value drops?

If your LTV rises too much, you may be asked to add more collateral or pay back some of your loan. If it reaches the liquidation point, part of your Bitcoin may be sold to repay the loan.

Where is my collateral stored?

At APX Lending, collateral is kept in segregated, non-comingled, insured cold-storage wallets with BitGo, with full 24/7 on-chain visibility.

What is the minimum and maximum loan amount?

In Canada, personal loans start at 10,000 CAD or 10,000 USDC, while in the U.S. the minimum is 25,000 USDC. Business loans can go up to 10 million.

Can I repay early?

Yes. You can repay early at any point in time, however you will need to pay 3 month’s interest if renewing prior to the end of your loan term.

APX Lending is a crypto-backed lender operating in the US, Canada, and globally. APX Lending does not offer financial or tax advice. We strongly encourage you to consult with a certified financial or tax professional for guidance on any related inquiries you may have.

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Beginner’s guide to Bitcoin loans: How to borrow against your crypto

Explainer

December 4, 2025

5min read

This guide explains how Bitcoin loans work, the risks to consider, and how to decide whether borrowing against your crypto is the right move.

What Is a Bitcoin-backed loan?

This type of cryptocurrency loan is similar to a secured personal loan in traditional financial services—your Bitcoin acts as the security. Once the loan is repaid, your BTC is returned to you.

Why people choose Bitcoin loans

Access cash without selling your Bitcoin
Avoid triggering capital gains taxes
Maintain upside exposure to your crypto assets
Get fast approval with no credit check

How a Bitcoin loan works

Here’s a simplified look at the process:

1. Select your loan term

Most lenders let you choose a loan term ranging from a few months to several years. Longer terms mean lower monthly payments. At APX, we provide generous terms to our borrowers, from 3-60 months.

2. Deposit your Bitcoin as collateral

Your BTC is placed into a secure custodial wallet. At APX, collateral is stored in insured, segregated custody.

3. Choose your payment structure

Borrowers can select:

Interest-only monthly payments, or
Amortized monthly payments where the loan principal is gradually paid down

4. Receive your funds

Funds are transferred quickly. With APX, borrowers can access cash in minutes or within 24 hours, depending on whether they choose CAD or USDC.

5. Repay and reclaim your Bitcoin

Once the loan is fully repaid, your BTC is released back to your wallet.

Understanding loan-to-value (LTV)

Loan-to-Value (LTV) determines how much you’re allowed to borrow. For example, at a 40% LTV, depositing $10,000 worth of Bitcoin allows you to borrow $4,000.

Common crypto loan LTV tiers

20% LTV – most conservative, lowest risk
30–40% LTV – standard for many borrowers
50–60% LTV – higher risk, may require quicker response to price swings

Higher LTV = larger loan, but also higher liquidation risk. For context, at APX we offer LTVs from 20% - 60%, among the most generous in the industry.

Risks of Bitcoin loans

Bitcoin loans are powerful tools—but they come with specific risks you should understand.

1. Price volatility

If the price of your Bitcoin falls, your LTV increases. You may need to:

Add more collateral
Make a payment to rebalance LTV
Or risk liquidation

2. Liquidation risk

Lenders issue margin calls when LTV becomes too high. If you don’t respond in time, your collateral may be sold. For a more in-depth look at LTVs and liquidation, check out this primer.

3. Interest rate changes

Rates differ across crypto-lending platforms. For instance, in Canada we offer a flat 12.99% APR. In the U.S., our rates are tiered and depend on your loan size.

4. Platform risk

Always choose a regulated lender with insured, segregated custody. Crypto loan safety depends heavily on the platform’s operational structure and compliance standards.

Benefits of borrowing against your Bitcoin

No credit check

Bitcoin-backed loans rely on your crypto assets—not your credit score.

Keep your long-term exposure

You maintain upside if Bitcoin appreciates.

Avoid taxable events

Borrowing lets you unlock liquidity without selling, which avoids capital gains.

Fast approvals and simple process

Most applications take minutes, and funds are available quickly.

Is a Bitcoin loan right for you?

A Bitcoin loan may be a good fit if:

You believe in Bitcoin's long-term value
You need liquidity but don’t want to sell
You want predictable monthly payments
You prefer a credit-check-free financing option

It may not be right if:

You can’t monitor changing LTV levels
You’re uncomfortable with potential liquidation
You need fixed interest over long periods

How APX Lending delivers a safer Bitcoin loan experience

APX Lending is an authorized, transparent crypto loan platform built for serious holders.

Why APX stands out

Insured (up to $250 M), segregated custody for all crypto assets (with BitGo Trust)
Regulated with FINTRAC, FinCEN and SOC 2 attestation
Flexible loan terms (3–60 months)
Interest-only or amortized payment options
Fast access to cash in minutes
Fully transparent LTV monitoring

Borrowers can view collateral on-chain at all times and maintain full visibility into their loan performance.

Bitcoin loan vs. Traditional loan

Here Bitcoin loans compare to traditional loans:

Feature	Bitcoin loan	Traditional loan
Approval process	Based on BTC collateral	Based on credit score and income level
Funding time	Nearly instant with USDC, typically within minutes with the rest	Days to weeks
Credit check	Not required	Always required
Interest rate	Varies from lender to lender but 9.99% to 12.99% at APX Lending	Varies widely
Asset exposure	Keep your bitcoin	No asset exposure
Regulation	Depends on lender	Fully regulated banks

Final thoughts

If you want to borrow against your Bitcoin safely and transparently, explore APX Lending’s Bitcoin loan options today.

Frequently asked questions about Bitcoin loans

How fast can I get a Bitcoin loan?

At APX Lending, more than 95% of borrowers receive funds within 24 hours.

Do Bitcoin loans affect my credit score?

No. Since your loan is backed by crypto collateral, no credit check is required.

What happens if Bitcoin’s value drops?

If your LTV rises too much, you may be asked to add more collateral or pay back some of your loan. If it reaches the liquidation point, part of your Bitcoin may be sold to repay the loan.

Where is my collateral stored?

At APX Lending, collateral is kept in segregated, non-comingled, insured cold-storage wallets with BitGo, with full 24/7 on-chain visibility.

What is the minimum and maximum loan amount?

In Canada, personal loans start at 10,000 CAD or 10,000 USDC, while in the U.S. the minimum is 25,000 USDC. Business loans can go up to 10 million.

Can I repay early?

Yes. You can repay early at any point in time, however you will need to pay 3 month’s interest if renewing prior to the end of your loan term.

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