Crypto-Backed Loans, Explained: How to Unlock Cash Without Selling Your Bitcoin
In briefCrypto-backed loans give holders cash against their coins without selling, generally avoiding a capital-gains event.Figure advises borrowers to compare four things when shopping: max loan-to-value, fixed vs. variable rate, licensing, and liquidation terms.Licensing and liquidation protection matter more than the headline rate, says the crypto lender, and the product suits only holders comfortable with margin-call risk. If you believe in your crypto, selling it to cover a short-term cash need is the one move youd rather not make. Sell, and you trigger a taxable event and give up any future upside. A crypto-backed loanoffers another path: borrow cash against your holdings while keeping every coin. Heres the mechanics. You pledge Bitcoin, Ethereum, or Solana as collateral, and a lender advances you cash—with Figure its up to 75% of your collaterals value*. You keep ownership of the crypto the entire time. No sale, and because borrowing isnt a sale, generally no capital-gains event (this isnt tax advice—check with a professional on your situation). The category has matured fast, and not every lender is built the same. Four things separate a serious platform from a risky one — and theyre exactly what you should compare when shopping for the best crypto-backed loan: Fixed vs. variable