Bitcoin-backed loans allow holders to pledge BTC as collateral to borrow dollars or stablecoins while retaining exposure to Bitcoin’s price and often avoiding a taxable sale. Loan-to-value ratios typically range from 30% to 70%: if BTC falls, borrowers must add collateral or repay part of their debt to avoid liquidation. Following Celsius and BlockFi’s 2022 bankruptcies, the market rebuilt more cautiously, with published rates ranging from about 5.8% to 14% depending on the lender and terms. In February 2026, Ledn closed a $188 million securitization of Bitcoin-backed loans, with S&P Global assigning its $160 million senior class a preliminary BBB- rating, while Coinbase reportedly surpassed $1 billion in loan originations.
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