Bitcoin-backed loans let you unlock your bitcoin’s buying power, without selling your bitcoin. By using bitcoin as collateral, you can access cash liquidity to fund your lifestyle or make investments, while maintaining benefits of holding bitcoin for the long-term.

How do bitcoin-backed loans work?

Bitcoin-backed loans involve temporarily pledging your bitcoin as secure collateral and receiving a cash loan, to be repaid with interest. The loan size and required collateral is determined by the Loan-to-Value (LTV) ratio – your loan amount compared to your collateral’s value. The larger the loan, the more collateral is required.

Here’s how it works:

1. Post bitcoin as collateral: You use your bitcoin as secure collateral for the duration of the loan.
2. Receive cash: The cash is delivered to you and begins accruing interest.
3. Manage your loan: During your loan, you can track your loan’s health, manage payments, add collateral, or close-out your loan early.
4. Repay your loan: At the end of the loan, you pay back your loan with interest.
5. Receive your collateral: Upon successful repayment, your bitcoin collateral is returned to you.

Due to bitcoin's price volatility, your collateral’s value fluctuates, directly impacting your LTV ratio. If your collateral’s value falls significantly, the lender’s ability to recover funds could be at risk, which is why certain LTV thresholds are set up to trigger margin calls or liquidations. A margin call is a requirement to lower your LTV by adding collateral or repaying part of your loan in a certain time frame, whereas a liquidation is a forced-sale of your collateral to return your LTV to a lower level, with a liquidation fee applied.

What rates and terms are available?

Bitcoin-backed loans at Strike are available at market leading rates:

• Loan term: 12-months
• Loan amount: Minimum $100,000, maximum $2,000,000
• Interest rate: 12% APR*
• Loan types:
  • Payment at Maturity: Principal and interest repaid in a single payment at maturity
  • Monthly Payments: Interest paid monthly, principal repaid at maturity
• Maximum initial LTV: 50%
• Origination fee: 0%
• Early repayment fee: 0%

*Payment at Maturity loans have an effective interest rate of 12.68% APR due to the monthly compounding effect on the deferred interest payments. Learn more about rates and terms.

How do I open a bitcoin-backed loan?

If you are eligible, you can open a loan in your Strike app by visiting your Cash tab and tapping the “Bitcoin-backed loans” card. You will be guided through the setup process of choosing a loan amount, adding collateral, selecting your preferred payment source, and reviewing your Loan Agreement. Read the full step-by-step guide for how to open a bitcoin-backed loan.

Upon opening a loan, your collateral will be debited from your bitcoin balance and the cash will be credited to your cash balance. You can then monitor and manage your loan in the Strike app by visiting your Loan Center, located on your Cash tab.

For more information on bitcoin-backed loans, explore all the in-depth FAQs.