Your Loan-to-Value (LTV) ratio is your principal (including any accrued unpaid interest) divided by the current value of your bitcoin collateral. The maximum initial LTV is 50% for the line of credit and standard loans, and 40% for volatility-proof loans.
What affects the LTV?
Bitcoin’s price fluctuates, and so does the value of your collateral. A price decrease raises your LTV, and an increase lowers it.
For term payment-at-maturity loans, LTV increases each month as unpaid interest accrues. Monthly payment loans keep LTV unaffected by interest since you pay it monthly.
For the line of credit, LTV is based on your drawn principal, not on your total credit line. Drawing more increases LTV, and repaying principal decreases it.
Monitor your LTV on the “Cash” tab via your “LTV Tracker”. You can lower your LTV at any time by paying down principal or adding collateral.
Volatility-proof loans are subject to liquidation if you miss a monthly or maturity payment, but they are unaffected by LTV movements that affect standard loans and lines of credit:
| LTV range | Status | What happens |
|---|---|---|
| 0–40% | Healthy | Eligible for collateral retrieval 60+ days after origination |
| 40%–65% | Healthy | No action needed |
| 65% | Warning | Consider adding collateral or repaying principal |
| 70% | Margin call | 72 hours to lower LTV to 65% or below |
| 85% | Liquidation | Immediate partial liquidation to return LTV to 65% |
When is there a margin call?
A margin call triggers if the LTV of your line of credit or non-volatility-proof loan reaches 70%, even temporarily. You have 72 hours to reduce your LTV to 65% or below by making a partial repayment from your cash balance or by adding bitcoin collateral. You’ll be notified by phone call, email, and push notification (if enabled).
If the bitcoin price recovers enough during the 72-hour window to bring your LTV back to 65% on its own, your margin call is automatically canceled.
If you don’t resolve your margin call on time, Strike liquidates only the minimum amount of collateral needed to bring your LTV back to 65%. At 70% LTV, that means roughly 14% of your collateral would be sold. After you repay the outstanding principal and interest, you’d get back the remaining 86%, assuming no further liquidations occur.
When is a partial liquidation?
If your LTV reaches 85% at any time, an automatic partial collateral liquidation immediately triggers for lines of credit and non-volatility-proof loans.
Similar to an unresolved margin call, Strike sells only enough collateral to bring your LTV back to 65%. At 85% LTV, that’s roughly 57% of your collateral. You keep the 43% as long as you face no further liquidations.
Suppose you deposit 0.2 BTC as collateral when bitcoin is at $100,000 and borrow $10,000 (50% LTV). Then bitcoin drops to $58,824, and you make no early repayments or collateral additions, pushing your LTV to 85%. Strike would sell approximately 0.114 BTC ($6,706), reducing your outstanding principal to $3,294. Your remaining collateral would be about 0.086 BTC ($5,059).
What if you miss monthly or maturity payments?
Even volatility-proof loans are subject to partial collateral liquidations if you fail to pay what’s due:
- Monthly interest payments: If a scheduled interest payment on a monthly payment loan or line of credit is not covered, you get a 10-day grace period. After that, sufficient collateral is liquidated to cover the overdue amount.
- Payment at maturity: If you miss your loan’s maturity payment, you get a 10-day grace period. After that, sufficient collateral is liquidated to cover your total outstanding amount. Your loan closes and any remaining collateral returns to your Strike account within 3 business days.
Any liquidation of bitcoin collateral, including using collateral as a payment source, is treated as a bitcoin sale on your behalf and incurs a taxable event.
How is the collateral value determined?
Strike uses aggregated bitcoin price data from multiple liquidity providers. Strike normalizes individual bid and ask quotes to mid-market rates, groups them to remove outliers, and averages them to produce a composite reference price. This methodology smooths short-term market volatility and helps prevent liquidation from temporary price spikes.