How to Borrow Against Crypto: Assets, Costs and Risks

Updated 9 September 2026

You can borrow against crypto only when a lender or lending market accepts the asset you actually hold. The next question is whether it provides money you can use for your intended purpose—not merely whether it advertises a high maximum LTV.

Start with the collateral, required payout and repayment plan. A native-BTC holder seeking bank funds is evaluating a different route from someone pledging an on-chain token to borrow a stablecoin. This guide helps you narrow the route before you apply.

Explore borrowing against native Bitcoin with Ledn →

Choose collateral that the product actually accepts

Bitcoin, Ether, stablecoins and other tokens are not interchangeable collateral. Each product sets eligibility and valuation rules. A volatile or less liquid token may support a different borrowing limit from BTC.

Wrapped BTC is also distinct from native Bitcoin. It represents an interest through another token arrangement and can introduce issuer, redemption and blockchain dependencies. Confirm the exact token and network before transferring anything.

Work backwards from the payment you need to make

Suppose you need dollars for an invoice. A stablecoin loan may require an additional conversion and bank withdrawal before the supplier can be paid. If the invoice is payable in a supported token instead, those steps may not be needed. Confirm the recipient's requirements before comparing rates.

For each candidate, write down the starting asset, collateral form, borrowed currency, receiving account and repayment asset. Any conversion belongs in the cost and risk assessment. The existence of a token designed to track BTC does not make it equivalent to native Bitcoin in every agreement or wallet.

Ledn may be relevant where eligible native BTC and an available fiat or stablecoin payout match that route. If you want to pledge another asset, verify an alternative that accepts it rather than assuming Ledn offers every type of crypto-backed loan.

Choose a lender or an on-chain market

A centralised lender generally combines account verification, a contract, custody and funding. A DeFi protocol manages a position through smart contracts, sometimes accessed through an account-based interface. Assess the whole arrangement, including any interface and token issuer.

Read DeFi versus CeFi loans and crypto loan platforms to compare options by borrowing need.

Calculate the amount and risk buffer

LTV equals debt divided by collateral value. A $15,000 balance against $30,000 of collateral is 50% LTV. If the collateral falls to $20,000, it becomes 75%, before interest and fees.

The maximum offered loan is not necessarily the appropriate amount to borrow. Consider how much cash or additional collateral you could access if prices fall. Account for processing time and the possibility that several assets decline together.

Choose a repayment source before a maximum loan amount

Borrowing more increases usable proceeds, but also increases the balance that must be repaid and generally reduces room for a collateral decline at a given collateral value. The available limit is not a personalised borrowing recommendation.

Test a delayed repayment and a lower asset price together. If the reserve intended to support the loan is also entirely exposed to the same crypto market, it may lose value when it is needed most. Consider reducing the loan or retaining other available funds.

Ledn's standard term is 12 months. That structure may fit a defined liquidity need; it should not be treated as an indefinite way to fund expenses without repayment. Compare a partial sale as well as other credit routes.

Review the agreement before moving assets

Confirm interest, fees, term, early repayment, collateral rights, liquidation and location eligibility. Keep a copy of the quote and instructions. Never share wallet recovery words or account credentials with a person claiming to arrange a loan.

After funding, use the platform's actual balance and collateral valuation to monitor the position. Our loan management guide explains top-ups and repayment planning.

Narrow the route, then apply

Choose the product whose accepted collateral, usable proceeds and repayment requirements fit the same job. For native BTC, check Ledn's terms; once the route fits, follow the Bitcoin-loan application guide.

This article is for general information, not financial, investment, tax or legal advice. Borrowing involves interest, fees and the risk of collateral liquidation. Eligibility and terms vary by jurisdiction and may change; the applicable agreement governs. Consult qualified advisers for your circumstances. Read Ledn’s Risk Disclosure Statement and Disclaimers.