Rates and terms in this article were verified in August 2026. Some links are affiliate links; see our editorial integrity policy for how we handle that.
Lending against collateral is one of the oldest ideas in finance; people have been borrowing against valuable property for thousands of years. What’s new is the collateral itself: instead of a house or a car, you can now put up Bitcoin, Ethereum, or another cryptocurrency and borrow cash or stablecoins against it, without selling a single coin.
The term loan makes some people wary, but the mechanics here are simpler than most traditional loans. At its core, a crypto loan is just one party lending money to another, secured by digital assets instead of real-world property.
Crypto loans have grown from a niche experiment into a mainstream product offered by regulated, publicly traded companies. This guide covers what a crypto loan actually is, how the collateral mechanics work, why people use them, and, just as important, the real risks you should understand before you borrow.
A Crypto Loan Is a Secured Loan Backed by Your Digital Assets
The way a crypto loan works is simple: you’re leveraging cryptocurrency you already own to borrow cash or stablecoins, without giving up ownership of the crypto itself.
Traditional collateral loans work by having the borrower put up an asset (real estate, a vehicle, savings) to secure funding from a bank. A crypto loan works the same way in principle, except the collateral is digital.
You deposit your cryptocurrency with a lender, and in return you receive a loan sized to a percentage of that collateral’s value. When you repay the loan, you get your crypto back. If you don’t, or if the value of your collateral falls too far, the lender can sell it to recover what you owe.
A typical crypto loan flow looks like this:
- Choose a lender and complete identity verification
- Deposit crypto as collateral
- Receive cash or stablecoins, usually within minutes to a day
- Repay the loan (plus interest) according to your terms
- Get your original collateral back
No credit check, no loan officer, and, on the better platforms, full visibility into how your collateral is held.
How Collateral and LTV Determine Your Loan Amount
Every crypto loan is built around a number called the loan-to-value ratio, or LTV. It’s simply the size of your loan as a percentage of your collateral’s value.
Most lenders cap standard Bitcoin and Ethereum loans at around 50% LTV: deposit $20,000 in Bitcoin, and you can typically borrow up to $10,000. That built-in cushion protects the lender (and you) if the price of your collateral drops. Some platforms offer higher LTVs on lower-volatility collateral: Nexo, for example, allows up to 90% LTV against stablecoins like USDT or USDC, since a stablecoin’s price isn’t expected to swing the way Bitcoin’s does.
The lower your LTV, the more room your collateral has to fall in value before you’re at risk of a margin call. Choosing a conservative LTV is one of the simplest ways to make a crypto loan safer.
Qualifying for a Crypto Loan
Qualifying for a crypto loan is far simpler than qualifying for a bank loan. Most platforms only require:
- A government-issued form of ID (passport, driver’s license, or state ID)
- A valid phone number and mailing address
- Enough cryptocurrency to cover the collateral requirement
- A bank account, if you want your loan paid out in fiat currency
There’s no hard credit check and no minimum credit score. Because the loan is fully collateralized, the lender’s underwriting is the collateral itself, not your credit history.
Why People Take Out Crypto Loans
Three reasons come up more than any others:
You keep your crypto exposure. If you sell Bitcoin to raise cash, you give up any future gains (and lock in a loss if the market later recovers without you). Borrowing against it instead lets you access cash while staying invested.
Selling crypto can trigger a taxable event; borrowing against it generally doesn’t. In the U.S. and many other jurisdictions, selling appreciated crypto can create a capital gain you owe tax on. A loan isn’t a sale, so it typically isn’t a taxable event, though tax treatment varies and you should confirm your specific situation with a tax professional before assuming anything. (Weighing the tax angle more broadly? See our comparison of crypto loans vs. crypto IRAs.)
No credit check. Because the loan is over-collateralized, your credit score is irrelevant to approval. That’s meaningful for anyone who is self-employed, has a thin credit file, or simply doesn’t want a hard inquiry on their report.
The Risks: Margin Calls, Liquidation, and Variable Rates
Crypto loans aren’t free of risk, and any honest guide has to say so plainly.
The biggest one is margin calls. If the value of your collateral drops, your LTV rises, and if it rises past the lender’s threshold, you’ll be asked to add more collateral or pay down the loan. Ignore the call, and the lender has the right to liquidate (sell) enough of your collateral to bring the loan back into a safe range, often at a loss to you.
Rates matter too, and not all of them are fixed. Coinbase’s crypto-backed loans, for example, carry a variable rate that’s recalculated continuously based on market demand: cheap when demand is low, more expensive when it isn’t. A fixed-rate loan costs more upfront but is easier to plan around.
Finally, availability and fees vary by state and by platform. Some lenders don’t operate in every U.S. state, and an origination fee can meaningfully change the real cost of a loan that looks cheap on the headline rate alone. Read the fine print before you commit any collateral.
Where to Get a Crypto Loan in 2026
The crypto lending industry went through a painful shakeout in 2022, when BlockFi and Celsius Network, two of the best-known names in the space, both collapsed and filed for bankruptcy. The core problem at both companies was the same: they re-lent or rehypothecated customer collateral into risky bets that eventually blew up. The lesson: prefer lenders who can show you they don’t re-lend your collateral, and who are transparent about where it’s actually held.
The platforms that survived that shakeout (or launched after it with better practices) make up today’s roster of credible U.S. options:
- Nexo – the most flexible option, with 100+ collateral assets accepted, loans starting at $50, and a genuine 0% APR option on qualifying low-LTV loans.
- Ledn – Bitcoin-only loans backed by qualified custodians (BitGo, Anchorage, Fidelity Digital Assets) and monthly proof-of-reserves, with no admin fee for U.S. clients.
- Coinbase – transparent, on-chain loans powered by the Morpho protocol, with the lowest headline rates on the market and loans up to $5M against Bitcoin.
- Strike – competitive fixed rates with no origination, early-repayment, or late fees, plus a volatility-protected loan option that removes liquidation risk entirely.
- Unchained – collaborative multisig custody, where you hold one of three keys, so no single party can move your Bitcoin. Now limited to businesses and high-net-worth borrowers, with a $150,000 minimum.
Full rate, LTV, and fee comparisons, updated as terms change, are on our crypto loan comparison page.
Assets You Can Use as Collateral
Bitcoin and Ethereum are accepted almost everywhere and remain the most common collateral choices. Beyond that, options vary widely by lender: Ledn and Unchained are Bitcoin-only, while Nexo accepts more than 100 different digital assets, including stablecoins at a much higher LTV than volatile coins.
If you’re holding a smaller or less common altcoin, it’s often simpler to convert it into Bitcoin, Ethereum, or a major stablecoin before applying; that widens your choice of lenders and usually gets you a better LTV.
Whichever platform you choose, remember that a crypto loan is still a loan: read the terms, understand your liquidation threshold, and only borrow what you’re genuinely comfortable repaying if HODLing through a downturn is part of your plan.
