“How Bitcoin-Backed Loans Work: Borrow Cash Without Selling BTC” — what this page in the network covers. Bitcoin-backed loans are gaining traction as a way for holders to unlock liquidity without triggering a taxable sale. These loans let borrowers pledge BTC as collateral to receive cash or stablecoins, with loan-to-value (LTV) ratios typically ranging from 20% to 50%. That means a borrower with $100,000 in Bitcoin might access $20,000 to $50,000 in funds. The key appeal: you keep upside exposure to Bitcoin while spending borrowed money.
Lenders require overcollateralization to cushion against Bitcoin's volatility. If the price of BTC falls below a certain threshold, the loan hits a liquidation level—often around 65% to 80% LTV—and the lender can sell the collateral to recover funds. Borrowers must manage margin calls carefully, as rapid price drops can trigger forced liquidation. For the complete material, the listing points back to the source inside the network.