CRYPTO-LENDING GUIDES

Crypto-backed loans: The complete guide (2026 edition)

Everything you need to know—how they work, rates, risks, tax implications, and how to choose the safest lender.

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What is a crypto-backed loan?How crypto-backed loans work How APX Lending is different Types of crypto-backed loans Who uses crypto-backed loans Borrow vs. sell Crypto loan rates Risks of crypto-backed loans How to choose a safe lender Why APX is safest Tax implications Crypto lender comparison How to get a loan with APX FAQs

What is a crypto-backed loan?

A crypto-backed loan lets you borrow cash or stablecoins using your Bitcoin or Ethereum as collateral. Instead of selling your assets—and triggering taxes or losing upside—you temporarily lock your crypto with a lender and access liquidity.

You retain ownership.

You keep market exposure.

You get cash without selling your strongest long-term holdings.

This guide covers everything you need to know about crypto-secured lending in 2026: how loans work, what has changed in the industry, how rates compare, and how to choose a safe lender.

For a deeper look at borrowing against BTC specifically, see our guide: Guide to Bitcoin loans: How to borrow against your crypto.

How crypto-backed loans work

All crypto loan platforms follow the same core model:

1. The loan application

Don't let this first step intimidate you. The loan application is as straightforward as it gets. Here's a play-by-play look at exactly what most crypto-lending platforms will ask you:

How much you want to borrow
Your interest rate (APR)
The amount of collateral you can pledge (in BTC or ETH)
Your loan-to-value (LTV)
The duration of your loan

No two lenders are the same. One may offer lower rates but add fees, while another prices everything upfront. It's important to find a lender that ultimately aligns to your own goals. We'll help you do that in this guide.

2. Identity verification

In this step, a lender verifies that you are exactly who you say you are. This is done to prevent illegal activities like money laundering and is a compliance requirement for all legitimate lenders. The process is simple. You provide a valid photo ID from your place of residence.

3. Send collateral

Lenders all have a different approach to custody. Whatever the case, you'll want to do your due diligence and ensure your crypto is being custodied with a trusted third-party in segregated and insured cold storage. Proof of reserves provide some transparency into where and how your crypto is being held but there's no replacement for 24/7 on-chain transparency. We'll get into this in more depth when we tackle custody.

4. Receive cash or stablecoins

Once your lender confirms collateral on-chain, they'll disburse your funds to your account or wallet. If speed matters to you, be sure to vet how quickly a lender can fund your loan.

5. Monitor your loan's health

You received your loan, but the process isn't over. Until it reaches maturation, you'll want to make sure your loan maintains a healthy LTV. If it doesn't, you risk liquidation. Some lenders even let you withdraw more loan if the value of your collateral increase, but more on that later.

6. Loan maturation

Once the loan is fully repaid, your crypto is released back to you.

How APX Lending is different (and safer)

APX uses a security model built for long-term trust:

CSA-approved
FINTRAC and FinCEN registered
SOC 2 attested
Segregated BitGo Trust cold-storage wallets
$250M cold-storage insurance
24/7 on-chain asset verification
No pooling. No rehypothecation. No surprises.

Most lenders do not offer this level of protection.

For more on custody, see: BitGo segregated wallets explained.

Types of crypto-backed loans

1. Bitcoin-backed loans

The most common, due to BTC's relative stability, liquidity, and market depth.

2. Ethereum-backed loans

Ideal for borrowers who want liquidity without selling ETH.

3. Stablecoin credit lines

Flexible, revolving access to liquidity for larger borrowers.

4. Business loans secured by crypto

Useful for companies managing treasury reserves or smoothing cashflow.

5. HNW private wealth loans

Tailored terms, flexible durations, and hands-on support. If you're looking for a loan over $200,000, we can help you out right here: APX Private Wealth.

6. Other crypto-backed loans

While Bitcoin and Ethereum are the most commonly accepted crypto collateralized loans on the market, some lenders also accept XRP, Solana, and others.

Who uses crypto-backed loans

Retail borrowers

Short-term liquidity without selling long-term assets.

High-net-worth borrowers

Access liquidity without triggering large capital gains.

Miners

Borrow against treasury reserves to manage operations.

Businesses holding crypto

Access capital without unwinding treasury positions.

Borrow vs. sell: When does borrowing make sense?

Borrowing is ideal when you want to:

Maintain upside exposure
Avoid capital gains
Access liquidity during volatility
Avoid "panic" selling at market bottoms
Extend runway (businesses and miners)

Selling might make more sense when:

You want to de-risk
You believe the asset is overvalued
You need liquidity beyond your safe LTV range

Crypto loan rates: What affects APR?

Rates vary across CeFi and DeFi lenders based on:

LTV (in some cases, lower LTVs equate to lower rates)
Collateral type (BTC is usually lower risk)
Loan size (the bigger the loan size, the better the rate)
Market volatility (this is true of DeFi loans, where rates move with the market)

Shopping rates? We've broken down what every main lender is offering to help you make the most informed decision: Best crypto loan rates: A platform-by-platform comparison.

Risks of crypto-backed loans (and how to reduce them)

1. Liquidation risk

If BTC or ETH prices drop significantly, your LTV may breach the liquidation threshold.

2. Counterparty risk

The #1 hidden risk in crypto lending. Pooled wallets, hot storage, or rehypothecation expose borrowers to lender failure.

3. Insurance limitations

Many lenders use uninsured or lightly insured custody.

4. Unclear collateral practices

If you can't verify collateral on-chain, you cannot verify its safety.

5. Regulatory risk

Unregulated platforms may change terms or freeze withdrawals.

For a deeper dive:

How to choose a safe crypto lender

Here's a simple checklist to help you find the right lender for you.

Choose lenders who:

Custody assets with a qualified custodian
Use segregated cold storage
Are regulated
Offer insurance
Publish liquidation LTVs
Provide on-chain visibility
Don’t pool or rehypothecate collateral

Avoid lenders who:

Offer unusually low rates
Hide custody details
Store assets in hot wallets
Are offshore and unregulated
Don’t publish liquidation rules

APX Lending: The safest way to borrow against Bitcoin or Ethereum

APX Lending is the only crypto-backed lender that offers:

CSA approval
FINTRAC and FinCEN registration
SOC 2 attestation
Segregated BitGo Trust cold-storage
$250M insurance
On-chain collateral verification
Transparent fees
Competitive rates for retail, HNW, and business borrowers

For more context on how APX Lending delivers on its promise to provide the safest lending experience, check out this article: Is APX Lending safe?

Tax implications (Canada and U.S.)

Borrowing is NOT taxable

A crypto-backed loan does not trigger capital gains.

Interest may be deductible

For business loans, depending on how the funds were used.

Liquidation is taxable

If collateral is used to pay off debt.

For a deeper dive into crypto-backed loans and taxes, check out our full primer: Borrow vs. sell: The tax-smart way to access your Bitcoin.

Crypto lender comparison

Here’s how APX compares to other major crypto lenders on rates, custody, and regulation.

Lender	Availability (NA)	Supported Collateral	Min Loan (USD)	APR / Rate	Max LTV	Fees	Term Length	Custody Model	Liquidation Threshold	Licensing / Regulatory	Notes
APX Lending	Canada & U.S. (subject to KYC/AML)	BTC, ETH	Canada: 10,000 CAD / 10,000 USDC U.S.: 25,000 USDC	9.99–12.99% simple interest (tiered by loan size)	20–60%	No origination; early payoff allowed (requires first 3 months’ interest if exiting early)	3–60 months	Segregated BitGo trust wallets; on-chain address per borrower; no rehypothecation	~90% LTV; margin-call alerts	CSA exemptive relief (Canada); MSB registered with FINTRAC & FinCEN	USDC or CAD funding; fixed rates
Ledn	U.S. & Canada (availability varies by state/province)	BTC (bitcoin-only)	≈ US$1,000 in BTC	~12.4% APR; admin fee waived in US/CA	50% (fixed)	2% admin fee (often waived US/CA); no prepayment penalties	12 months	BitGo partner custody; collateral not lent out (per Ledn)	~80% LTV; margin-call alerts ~70% & auto-top-up	Cayman VASP; Proof-of-Reserves reports	BTC-only. Custodied vs standard loans differ by rehypothecation; PoR attestations ~6 months.
SALT Lending	U.S. (state availability varies)	BTC, ETH, USDC, USDT, SALT	$5,000	8.95–14.45% APR (includes origination)	30% / 50% / 70%	~1% origination; no prepayment penalty	≈ 12 months (interest-only or accrue)	MPC wallets via Fireblocks; custody-agnostic; segregated per account	Varies by asset; not universally posted	U.S. lender; KYC/AML; state availability varies	Payout in USD or USDC/USDT
Unchained (Commercial)	U.S. (commercial focus; not consumer)	BTC (bitcoin-only)	≈ $150,000 (typical)	Example ~13% APR (varies; contact sales)	≈ 35–50%	Custom (origination & service fees negotiated)	Custom / negotiated	Collaborative multi-sig (Unchained + independent key agent)	Not publicly posted	Loans via partner banks; state availability varies	No rehypothecation; business/HNW only
Figure (Crypto-Backed Loan)	U.S. only; many restricted states	BTC, ETH	Not publicly posted	8.91% (9.999% APR) @ 50% LTV; typical 12.5–15%	≈ 55–75%	~1% origination; no prepayment penalty; other fees per FAQ	≈ 12 months (interest-only; deferral options for fee)	Decentralized MPC + qualified custodian; no rehypothecation	Courtesy notice ~65% LTV; auto-liquidation ~70% (if uncured)	U.S. product; KYC/AML; state restrictions apply	State availability list maintained on site
Arch Lending	U.S. (extensive state restrictions)	BTC, ETH, SOL	Not publicly posted	~11–13% APR	≈ 60%	1.5% origination; liquidation fee applies	≈ 12 months (interest-only; balloon at maturity)	Qualified custody (Anchorage Digital); no rehypothecation. BTC margin call 70% / partial liquidation 80%; ETH 65%/75%; SOL 55%/65%.	BTC 80%; ETH 75%; SOL 65% (indicative)	U.S. product; KYC/AML; state restrictions apply	Individual & business loans

Want to see how APX Lending stacks up against competitors? Check out our versus series:

HOW IT WORKS

Every step in your loan application, at a glance

From creating your account to repaying your loan, everything happens in a few simple steps—with your collateral insured and visible on-chain the entire way.

1. Create your APX account

2. Prequalify for your loan

Get an instant estimate based on your collateral.

3. Verify your identity

Most clients pass through identity verification within five minutes, max. Make sure to have a piece of government-issued photo ID.

4. Sign your loan agreement

Sign and agree to the terms of your loan.

5. Send your collateral

You get a unique, segregated BitGo Trust wallet.

6. Receive your funds

Once we've verified receipt of your collateral on-chain, we disburse your loan. CAD hits your bank account within twenty-four hours. USDC hits your wallet nearly instantly.

7. Monitor your loan's health

We help with proactive LTV alerts and collateral-management tools.

See what you can borrow

Get liquidity without selling your crypto. Safe, transparent, and fully insured.

Check borrowing power

Got questions?

FAQs

Can I get a crypto loan without a credit check?

Yes. Crypto-backed loans rely on your collateral, not your credit score.

What happens if Bitcoin drops?

Your LTV rises, and you may need to add collateral or repay part of the loan.

How safe is my collateral with APX?

Collateral stays in a segregated BitGo Trust cold-storage wallet—insured, visible on-chain, and never pooled.

How much can I borrow?

LTV typically ranges from 30% to 70% depending on asset and volatility. Our loan minimums in Canada are $10,000 CAD/USDC and in the U.S. are 25,000 USDC.

Is borrowing against BTC taxable?

No. Borrowing does not trigger capital gains. Liquidation does.

Accounts with APX Inc. are not protected by the Canadian Investor Protection Fund (CIPF), Canadian Deposit Insurance Corporation (CDIC), Securities Investor Protection Corporation (SIPC), or the Federal Deposit Insurance Corporation (FDIC). Content made available through the APX Platform, including social media, podcasts, and other materials, is for general informational and educational purposes only and should not be considered legal, financial, investment, or other professional advice. For information on how to submit a complaint, please visit our Complaints page. For more information, see our Terms and Conditions .