How to Get a Loan to Buy Bitcoin (in 3 Simple Steps)

This content is for general informational purposes only and is not financial, investment, legal, or tax advice. Borrowing against crypto involves risk, including the risk of liquidation and loss of collateral.

If you hold Bitcoin and want to increase your BTC exposure without selling, some platforms offer crypto-backed borrowing products. One approach is borrowing against BTC collateral and using the proceeds to purchase additional BTC.

Important: This is a leveraged strategy. If Bitcoin’s price falls, losses can be amplified and you may face margin calls or liquidation of collateral. Borrowing costs, fees, and eligibility requirements apply.

This guide explains how to take out a Bitcoin loan in three steps using Ledn’s B2X service, whilst also comparing alternative options.

Read more: How to Earn Interest on Bitcoin

Key risks:

• Leverage amplifies losses: If the market moves against you, losses are greater than holding the asset alone.
• Margin calls and liquidation: Significant price drops can trigger collateral liquidation.
• Fees and interest apply: Costs will reduce overall returns.
• Volatility risk: Bitcoin price volatility may exceed collateral buffers.
• Tax consequences: Selling crypto to repay loans may trigger taxes; laws vary by jurisdiction.
• Availability: Product availability varies by jurisdiction.
• Counterparty/Custody: Platform and custody risks may apply; typically no deposit insurance.

Can you really take out a loan to buy Bitcoin?

Yes, and it’s more common than you might think. Crypto lending platforms like Ledn, Binance, and Nexo provide methods of using collateral to access fiat or other cryptocurrencies. These are often called crypto loans or crypto-backed loans.

Of course, there’s also the option of seeking a fiat loan to buy Bitcoin, meaning you’d go down a more traditional avenue, but these loans can come with certain restrictions, depending on what companies you work with, and if most of your wealth is in digital assets, then you might struggle with finding a company that accepts it as collateral.

3 Steps to Get a Bitcoin Loan with Ledn B2X

Ledn’s B2X service allows eligible users to borrow against Bitcoin collateral and use the loan proceeds to purchase additional Bitcoin, increasing BTC exposure. Loan-to-value limits, interest, fees, and liquidation thresholds apply.

Here’s how it works:

1. Sign Up and Verify Your Ledn Account

Create an account at Ledn.io and complete the identity verification process. This includes submitting identification documents and answering some brief questions.

2. Use The B2X calculator

Visit the B2X page and input how much Bitcoin you want to leverage. The calculator will show:

• The loan amount (in USD)
• Your new total BTC exposure
• Estimated loan-to-value (LTV) ratio
• Liquidation thresholds

Illustrative example (not a guarantee):

A user deposits BTC as collateral, borrows USD (amount depends on LTV), and uses it to purchase additional BTC. Both the deposited BTC and purchased BTC may be held as collateral depending on the product terms.

3. Place your B2X order

Once you’ve reviewed the terms and loan structure, click “Place B2X Order.” Your transaction is generally processed promptly, subject to verification and market conditions, giving you an increased Bitcoin position backed by a crypto loan. You can read about Ledn's custody and risk protocols here.

Read more: How to Use Ledn to Grow Digital Wealth

Product Basics

Before proceeding, it is important to review the specific product terms:

• Rates & Fees: Interest rates, origination fees, and other costs apply and may vary. Check the latest schedule on the platform.
• LTV & Liquidation: Loan-to-Value (LTV) ratios determine how much you can borrow. Specific thresholds exist for margin calls and liquidation.
• Eligibility: Services are subject to jurisdictional availability and user eligibility requirements.
• Terms: Full terms and conditions regarding repayment, collateral management, and risks can be found on the Ledn website.

Bitcoin loan options, compared

Ledn’s B2X may be a suitable option for long-term Bitcoin holders who want to keep their position and increase their exposure without cashing out.

Read more: How To Store Bitcoin Everything You Need To Know

Who should (and shouldn’t) borrow to buy Bitcoin?

Using your Bitcoin to secure a loan for more Bitcoin is a bold move – meaning it’s not for everybody. It may be suitable for users who:

• Are Confident in Bitcoin: They see Bitcoin’s value increasing over time, and understand why it’s so important in the economic world.
• Hold More Value in Digital Assets than Fiat: Some people choose to hold their wealth in BTC and other digital assets, meaning traditional lenders might disallow them loans due to not recognising their worth.
• Have Contingency Plans for Downward Activity: Bitcoin is a volatile asset, and accessing a loan to buy more of it adds increased risk to your portfolio, but if you’re smart about your finances and have plans for margin calls and price volatility then you’re in a strong position.

With that being said, there’s many people who this type of activity does not suit. They tend to:

• Have Little Experience with Digital Assets: Using crypto as collateral for more crypto is an advanced move, as it introduces significant risk – if you’re new to the markets it would be unwise to take this step.
• Lack Contingency Plans: Crypto can feel like a method of getting rich quick, but the volatility of the markets means it’s more complex than that. You need to have guardrails in place in case you’re unable to fulfil your loan requirements.
• Store Their Wealth in Fiat: If you already have a significant amount of fiat, you could simply use that to secure more Bitcoin, rather than use BTC itself. Ledn also offers this more streamlined service.

Understand the Risks Before You Borrow

1. Liquidation risk

If Bitcoin’s price drops and your loan-to-value ratio exceeds the platform’s threshold, you may receive a margin call. If you don’t top up collateral, your BTC may be liquidated, potentially at a loss.

2. Liquidation fees

Forced liquidations often involve platform fees. Review the terms carefully before taking out a crypto loan, especially when using high loan-to-value ratios.

3. Tax implications

Borrowing may not be a taxable event in some jurisdictions, but tax treatment varies. Consult a qualified tax advisor as selling BTC to repay a loan may trigger capital gains tax.

4. Platform and regulatory risk

The crypto lending space is evolving. Choose a platform that provides clear disclosures, transparent terms, and appropriate compliance measures where they operate.

Is it suitable?

Borrowing to buy Bitcoin can generate higher returns, but only if the market moves in your favour. It’s a leveraged strategy, meaning both the upsides and downsides are amplified.

It may be suitable if you:

• Have a long-term bullish outlook
• Want to increase BTC holdings without triggering a taxable event
• Can manage short-term drawdowns, margin calls, and volatility

It may not be suitable if you:

• Need certainty and low-risk investments
• Don’t understand the mechanics of crypto lending
• Cannot afford to add collateral or repay quickly under pressure

Read more: Best Bitcoin Loan Rates In 2026

Final thoughts

Crypto loans are a powerful way to access capital without selling your Bitcoin. Ledn’s B2X product simplifies the process of borrowing to buy more BTC, making it an option that may be suitable for long-term holders looking to increase exposure.

This is a novel approach to building your digital wealth, designed specifically for experienced Bitcoin holders who understand the risks of the asset, but also see how significant it is to the financial world.

Try Ledn’s B2X calculator

See how much you can borrow and preview your loan position at ledn.io.

Disclaimer

This article is sponsored by 21 Technologies Inc. and/or its subsidiaries (“Ledn”) and is for general information, discussion, or educational purposes only and is not to be construed or relied upon as constituting legal, financial, investment, accounting, tax, estate-planning, or other professional advice or recommendation.

Product availability varies by jurisdiction. Terms, rates, and fees may change. Past performance is not indicative of future results. Please read Ledn’s full Risk Disclosure Statement and Disclaimers.

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