Bitcoin Collateral Loans: 9 Borrowing Routes Compared
A Bitcoin collateral loan lets you obtain cash or stablecoins while pledging BTC to secure repayment. You keep price exposure, but the pledged BTC is restricted and may be sold if the loan breaches its terms. Borrowing also adds a debt and fees; it does not create new wealth. Selling instead may have tax consequences, but whether a loan or a later liquidation is taxable depends on your jurisdiction and circumstances.
I co-founded Ducat, so its entry is an interested perspective. The provider details below were checked against their own pages on 11 October 2026. This is a selection of nine routes, not an exhaustive market ranking.
Nine routes at a glance
| Route | Collateral arrangement | Published pricing approach | Payout and key condition |
|---|---|---|---|
| Lava | Bitcoin vault | App interest quote plus 2% annual capital charge on peak drawn balance | Dollar line of credit; confirm current terms in app |
| Strike | Custodial loan | APR varies by loan size, payment plan, product, and location; 0% origination fee | 12-month product, subject to eligibility |
| Arch | Qualified custodian Anchorage Digital | APR varies by size and payment timing; origination fee included | USD or USDC; up to 60% starting BTC LTV |
| Ledn | Custodied BTC, with limited re-posting permitted under its terms | Fixed APR tiered by size | USD-denominated; payout options vary by location |
| Nexo | Nexo credit-line arrangement | Product and loyalty-tier pricing | Fiat or stablecoins where available |
| Coinbase | BTC converted to cbBTC on Morpho/Base | Variable market interest plus Coinbase fee and processing charge | USDC for eligible customers |
| Hodl Hodl | P2P multisig escrow | Lender-negotiated interest for the full contract term, not APR, plus 1.5% origination fee | Crypto-only loans; counterparty and dispute process matter |
| Unchained | Collaborative multisig custody | Quoted fixed-term interest and fees | Larger loans; minimums differ by borrower type |
| Ducat | Native BTC in a Bitcoin L1 vault | 7% one-time minting service charge; no ongoing interest | UNIT or USDC payout for eligible closed-alpha users; check net proceeds |
The pricing column is not a single comparable APR list. Arch includes its origination fee in the published APR; Lava's capital charge sits beside its interest quote; Hodl Hodl terms vary by lender. Request live offers for the same net proceeds and loan duration before comparing cost.
Match the payout to your use
USD sent to a bank account, USDC sent to a wallet, and a different stablecoin are not interchangeable outcomes. A crypto-only loan may require an additional exchange and withdrawal before you can pay a fiat bill. Ask which asset you actually receive, on which network, whether the provider performs a conversion, and who bears the spread and network fee.
What happens to the BTC?
Custodial loans
You transfer BTC into a provider's loan arrangement. The provider, its custodian, and the contract determine where collateral can move and how it is returned. Arch says BTC remains with Anchorage Digital and is not rehypothecated. Ledn says Custodied Loan collateral may be re-posted to an institutional USD funding partner or financing vehicle but cannot be lent onward to generate yield. Those are materially different arrangements; read each agreement rather than treating “custodial” as one risk level.
Collaborative custody and escrow
More than one signature is needed to move the BTC. Hodl Hodl uses multisig escrow and borrower-lender terms; Unchained uses collaborative custody. Multi-party signing narrows unilateral control but does not remove liquidation, key-loss, dispute, or service risks. Our non-custodial loan guide explains which keys and exits to check.
Bitcoin vaults
The BTC remains on Bitcoin under signing and protocol rules. Lava's current line-of-credit FAQ describes its liquidation process; Ducat describes a threshold-signature Bitcoin L1 vault. Neither description is a guarantee that a borrower can spend pledged BTC freely or that software, oracle, or liquidation failures are impossible.
Wrapped BTC on another chain
Coinbase's loan documentation says BTC is converted to cbBTC and pledged on Morpho on Base. The Coinbase interface does not make the position a conventional custodial BTC loan. The cbBTC issuer and on-chain market add dependencies to review.
What a custody label cannot tell you
“Custodial,” “collaborative,” and “non-custodial” are useful starting points, but a borrower still needs to know who holds each key, when collateral can move, what the loan agreement permits, and how recovery works if a service stops. Verify those details in the current contract or protocol documentation. A lender's public security claim is not a substitute for the actual signing and liquidation terms.
How liquidation changes the comparison
LTV is outstanding debt divided by the value of pledged BTC. A $20,000 loan backed by $40,000 of BTC begins at 50% LTV. If BTC falls 25% without a repayment, the same loan is backed by $30,000 and LTV rises to about 66.7%; accrued interest can raise it further.
Thresholds differ. Ledn describes warnings at 70% and 75% and automatic liquidation at 80%. Arch lists a 70% BTC margin call and 80% partial-liquidation level. Coinbase lists 86% for its documented USDC loan, with a liquidation penalty. Check the current threshold, whether liquidation is partial or full, and whether you can add collateral or repay in time. The highest possible starting LTV is rarely the safest amount to borrow.
Our BTC collateral guide explains why the warning level and the liquidation level are separate numbers.
Practical differences among the nine
Lava
Lava offers flexible dollar borrowing against a Bitcoin vault. Its current line-of-credit FAQ describes a capital charge alongside the interest quote. Include both and any recurring payments shown in your own quote.
Strike
Strike publishes a 12-month term, a maximum initial 50% LTV including principal and interest, and no origination fee. Its FAQ says closing is available on demand after 60 days. Review custodial terms and local availability.
Arch
Arch publishes size-based APR tiers, uses Anchorage Digital custody, and starts BTC loans at up to 60% LTV. Its partial-liquidation design may differ from a lender that sells an entire position, but ask exactly how much collateral can be sold and what fees apply.
Ledn
Ledn offers support, fiat payout routes, and a longer operating record. Its 12-month maturity, fee schedule, and the permitted re-posting of collateral are the key terms to examine. Our Ledn vs Ducat guide goes deeper.
Nexo
Nexo offers a revolving credit line and several payout routes. The advertised low rate may depend on NEXO holdings, LTV, product, and location. Compare the exact product rather than a rate from a different tier.
Coinbase
Coinbase offers an on-chain USDC loan through a familiar app to eligible verified customers. Its rate is variable and BTC becomes cbBTC on Morpho. The ability to use Coinbase does not remove smart-contract, token, or liquidation risks.
Hodl Hodl
Hodl Hodl lets borrower and lender agree on terms in a multisig escrow. The platform says loans are crypto-to-crypto and charges a 1.5% origination fee. Check the lender, dispute rules, loan currency, and repayment route.
Unchained
Unchained focuses on larger loans with collaborative custody. Its current loans page says minimums start at $150,000 for business entities and $500,000 for eligible individuals, trusts, and sole proprietors in most cases, for qualifying commercial or investment purposes. It is not a small-loan option.
Ducat
Ducat uses native BTC collateral on Bitcoin L1 and a 7% one-time minting charge. A one-time fee can be costly for a short loan. Ducat remains in mainnet closed alpha, so access is limited. Eligible users can receive UNIT or USDC; confirm the app's net proceeds, any conversion costs, collateral ratio, liquidation rule, and recovery path before depositing.
Term, renewal, and early repayment
Even loans with the same initial cost can diverge at maturity. Strike and Ledn publish 12-month products; Unchained's terms depend on its borrower and loan agreement; a P2P Hodl Hodl offer is negotiated with a specific lender. Ask whether interest is paid monthly or at maturity, whether early repayment changes the charge, and whether extending a loan creates a new fee or rate.
What to ask before you sign
- How many dollars or stablecoins will actually arrive after all fees and conversions?
- What will repayment cost at three, six, and twelve months?
- Who can move the BTC, and under what contract or signing rule?
- At what BTC price will you receive a warning, and at what price can collateral be sold?
- What is your repayment source if BTC falls or the lender's interface is unavailable?
Common questions
Does a Bitcoin collateral loan let me keep my BTC? You retain Bitcoin price exposure, but the pledged BTC is restricted and may be sold under liquidation rules. “Keep” does not mean “can spend at any time.”
Is borrowing automatically tax-free? No universal answer applies. A sale, a loan, a stablecoin conversion, and collateral liquidation can have different treatment depending on your location and circumstances. Keep records and seek local tax advice.
Which platform has the lowest cost? It depends on net proceeds, expected duration, fees, rate tier, and the live offer. The table above intentionally avoids a single winner based on stale headline APRs.
For a cost calculation, see our 2026 Bitcoin loan rates guide. For Ducat's current product description, see Borrow against Bitcoin.
Provider pages checked on 11 October 2026. Ducat's 7% charge was confirmed for this update on that date. Availability and terms change. General information only, not financial or tax advice.
