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5/27/2025 9:58 pm  #1


Loan against Bitcoin

A Bitcoin collateralized loan is a form of crypto financing in which the owner of a digital asset pledges their Bitcoins as collateral to receive fiat money or stablecoins without having to sell the asset itself. This mechanism allows you to preserve the potential for cryptocurrency growth while at the same time gaining liquidity for business, investment or personal needs.

The process usually begins with the transfer of Bitcoins to a special collateral account or smart contract, after which the lender — which can be a centralized crypto platform (e.g. Nexo, Binance, CoinLoan) or a DeFi protocol (Aave, Compound) — issues a loan. The loan amount is determined by the LTV (Loan-to-Value) principle: most often it is 50–70% of the market value of Bitcoins at the time of the transaction. If the market falls, the borrower may need to provide additional collateral or return part of the loan — otherwise the collateral is liquidated.

The conditions depend on the type of platform: centralized services offer convenient interfaces and quick access to funds, while the user entrusts their assets to a third party. DeFi platforms operate without intermediaries, but require technical literacy and carry other risks - for example, vulnerabilities of smart contracts https://globalcapitalmonetization.com/loanagainstbitcoin

A loan secured by bitcoins is not only convenient for a crypto investor, but also tax-advantaged in some jurisdictions: you do not sell the asset, so you do not record a profit and do not pay capital gains tax. At the same time, it is important to be aware of market volatility: crypto is not a stable collateral, and you need to be prepared for rapid changes in conditions. 


  
 

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