Bitcoin-Backed Loans Based on Collateral Value Instead of Credit Score

Bitcoin (BTC)-backed loan products are spreading in the United States and Canada. These products allow users to borrow dollars or USD Coin (USDC) based on collateral value and loan-to-value ratio (LTV) instead of credit scores. Strike offers an APR starting at 9.5%, with a maximum initial LTV of 50%, no opening fees, and no credit checks, with a minimum loan amount of $10,000. APX Lending provides loans without credit checks within an LTV range of 20-60%, with a minimum loan size of 25,000 USDC. Figure offers 12-month loans backed by Bitcoin, Ethereum (ETH), and Solana (SOL), with an interest rate of 8.91% based on a 50% LTV. Coinbase allows some U.S. users to borrow up to 5,000,000 USDC using Bitcoin as collateral. Ledn has disclosed an APR of 9.25-11.49% and cumulative loan disbursements exceeding $11 billion. Bitcoin-backed loans focus more on the sufficiency of collateral than on the borrower's credit history, and the higher the LTV, the greater the liquidation risk. This product category is presented as a means to secure liquidity without selling Bitcoin, but the loan limits and conditions vary by platform.

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