Bitcoin-backed loans are surging back into favour as long-term holders look for ways to unlock cash without parting with their coins – and without repeating the bruising failures that hit the crypto lending industry in 2022.
Stricter custody standards, clearer disclosure and tighter risk controls are underpinning a renewed boom in the sector, which Galaxy Research estimates could help push the wider crypto lending market to about $73.6bn by the third quarter of 2025.
The new generation of platforms is pitching a simple proposition: instead of selling Bitcoin – and triggering tax liabilities or missing future gains – investors can use their holdings as collateral to borrow dollars or stablecoins.
How Bitcoin-backed loans work
Under a typical arrangement, a customer transfers Bitcoin to a lender, which locks it as collateral and issues a loan worth roughly half the value of the deposited coins. This ratio, known as the loan-to-value (LTV), is usually around 50%.
Because the loan is secured against Bitcoin, most providers do not carry out traditional credit checks. Once the loan is repaid in full, the borrower’s Bitcoin is returned.
However, this model carries price risk. If Bitcoin’s value falls sharply, the LTV rises. If it approaches a pre-set liquidation threshold, the lender may sell part of the collateral to restore balance. The most conservative platforms warn clients early, allow extra collateral to be added and provide tools to help avoid forced liquidations.
Another key concern is custody. Some lenders re-deploy customer Bitcoin to earn additional yield, exposing users to counterparty risk if those positions fail. Others keep collateral segregated and untouched.
Ledn emerges as conservative market leader
Toronto-based Ledn is increasingly seen by industry analysts as one of the most conservative operators in the sector, combining a clean operating history with detailed, recurring disclosures.
The company has been active since 2018, trading through the 2018–2019 downturn, the 2021 bull market and the wave of collapses in 2022 that brought down centralised lenders including Celsius, BlockFi, Voyager and Genesis. Ledn says it has never halted withdrawals during those episodes.
According to company data cited by CoinDesk, Ledn has originated more than $11bn in loans since launch. Its Bitcoin-backed lending alone passed $1bn in originations during 2025, including a record $392m in the third quarter – almost matching its entire 2024 volume. In November 2025, Tether announced a strategic investment in the firm, a move widely read as a vote of confidence from one of the largest players in digital assets.
Ledn has deliberately adopted a Bitcoin-only strategy, phasing out ether lending to focus on long-term Bitcoin holders. Co-founders Adam Reeds and Mauricio Di Bartolomeo now serve clients in more than 100 countries.
The platform stresses that collateral in its custodied loan product is not lent out and cannot be rehypothecated by Ledn or its funding partners. Coins are stored in segregated on-chain addresses, separated from partner assets.
Ledn publishes a monthly Open Book Report, independently verified by a third party, and introduced Proof of Reserves audits in 2020 – a practice it has since repeated ten times. The firm is also SOC 2 Type 2 certified.
Borrowers typically start at a 50% LTV. Margin calls are triggered at 70%, with liquidation only at 80%. An automatic top-up function can add collateral when prices fall, helping borrowers stay above critical thresholds. Interest rates range from 11.49% APR on smaller loans to 9.25% on larger ones, with no monthly payments, no early repayment penalties and pricing displayed upfront.
Ledn’s limitations include higher headline rates than some rivals, a strict Bitcoin-only collateral policy and products that are not available in every jurisdiction.
Unchained targets self-custody purists
US-based Unchained has built its model around borrowers who are reluctant to trust any single entity with full control of their coins.
Its loans are structured using a 2-of-3 multisignature vault: the borrower holds one key, Unchained another, and an independent key agent the third. No single party can unilaterally move the Bitcoin, which makes rehypothecation far harder. The company says it does not lend out collateral, and clients can verify the vault addresses directly on the blockchain.
Unchained has, however, largely shifted to serving businesses and higher-value borrowers. Minimum loan sizes are around $150,000, excluding many smaller investors. Rates are typically among the highest in the market and funding can take several days.
The service is therefore most attractive to high-net-worth individuals and institutions prepared to pay more and wait longer in exchange for enhanced control over their Bitcoin.
Nexo offers broad access and token-linked discounts
Nexo, another long-standing name in crypto lending, has been operating since 2018 and claims millions of users across multiple regions.
It provides instant credit lines secured against Bitcoin, Ether and more than 100 other digital assets. Borrowers can access amounts from $50 up to $2m, with no credit checks and no fixed repayment timetable. The platform also markets a rewards card and interest-bearing accounts.
Nexo’s borrowing costs are tiered and linked to a loyalty system. Standard rates span from 1.9% to 18.9% APR, but the lowest rates apply only to top-tier users with low LTVs. Achieving those tiers typically requires purchasing and holding NEXO tokens, leaving users to weigh cheaper borrowing against increased exposure to the platform’s own asset.
Coinbase revives Bitcoin loans with on-chain engine
Coinbase re-entered the Bitcoin lending market in January 2025 with a service powered by the decentralised protocol Morpho and running on Base, Coinbase’s layer-2 network.
Customers pledge Bitcoin, which is converted into wrapped cbBTC, and receive USDC directly into their Coinbase account, usually within a minute. The programme surpassed $1bn in originations in its first eight months, pushing the borrowing cap from $1m to $5m.
The chief draw is convenience and comparatively low cost. Interest rates can begin near 5%, tracking Morpho’s on-chain market, and there are no fixed payment schedules or due dates. However, the service is restricted to US customers outside New York, exposes users to smart contract risk, and requires the extra step of wrapping Bitcoin.
Strike targets smaller holders with ‘volatility-proof’ option
Strike, a newer entrant, focuses on Bitcoin-backed loans with a lower entry threshold. Its standard product begins at 9.5% APR, with a maximum initial LTV of 50%, minimum loan sizes of $10,000 and no origination or early repayment fees. Strike says it does not rehypothecate collateral.
In 2026, the firm launched a “volatility-proof” loan that removes price-triggered liquidations, caps the initial LTV at 45% and shortens the term to six months, compared with 12 months for the conventional product.
The offer is aimed at everyday Bitcoin holders who want clear terms and modest borrowing requirements, though Strike’s shorter track record and narrower feature set set it apart from more established rivals.
Risk first, rates second
Analysts say selecting a Bitcoin-backed lender in 2026 is, above all, a question of risk management. Low advertised interest rates may matter little if a platform is re-lending collateral or providing only limited transparency over its balance sheet.
Ledn currently stands out in many rankings because of its long history, Bitcoin-only focus, independent monthly disclosures and risk controls such as auto top-ups. But all of the leading platforms represent different trade-offs between cost, speed, control and counterparty exposure.
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