Bitcoin holders leverage crypto-backed loans to purchase actual property with out promoting a single sat whereas sidestepping capital positive aspects taxes.
The rising pattern is gaining momentum amongst early crypto adopters, entrepreneurs, and high-net-worth people who’re “Bitcoin rich” however usually don’t meet the normal standards for actual property financing, Mauricio Di Bartolomeo, co-founder of Ledn, instructed Cointelegraph.
Bitcoin-backed lending fashions permit debtors to leverage their crypto with out divesting. Since taking a mortgage doesn’t sometimes rely as a taxable occasion, purchasers can entry liquidity whereas retaining upside publicity.
“Borrowing utilizing your Bitcoin as collateral doesn’t sometimes set off capital positive aspects taxes in most jurisdictions as a result of borrowing in opposition to an asset is often not a taxable occasion — you aren’t promoting your Bitcoin,” Di Bartolomeo stated.
Associated: purchase a house with a crypto-backed mortgage
Bitcoin loans fund properties quick
To safe a Bitcoin (BTC) mortgage, purchasers lock up BTC at a typical 50% loan-to-value (LTV) ratio and obtain fiat or stablecoins. The typical funding time for one lender is 9.6 hours, Di Bartolomeo stated. These funds are then used both as a down cost or to cowl the complete value of a property.
The mannequin additionally gives some flexibility. Curiosity and charges accrue over the mortgage time period, with no obligatory month-to-month funds. Compensation can happen anytime with out penalties, and loans could be renewed if the LTV stays beneath 60%. Debtors additionally retain the correct to withdraw extra collateral if Bitcoin appreciates throughout the mortgage time period.
Di Bartolomeo stated that Ledn’s Bitcoin loans have discovered sturdy adoption in Latin America, the US, and elements of Europe. “The great thing about Bitcoin as collateral is that it’s borderless,” he stated.
A recurring concern with BTC-backed loans is volatility. “As Bitcoin worth drops and the LTV will increase, purchasers will obtain notifications to ship extra collateral,” Di Bartolomeo defined.
If the LTV reaches 80%, the lender sells the required quantity of BTC to repay the mortgage, returning any the rest to the borrower. Since the actual property transaction has already occurred, a liquidation doesn’t reverse the property buy — it merely settles the mortgage.
Associated: Maple Finance, FalconX safe Bitcoin-backed loans from Cantor Fitzgerald — Report
Bitcoin as collateral, no credit score examine wanted
Conventional lenders usually shrink back from crypto because of regulatory uncertainty and credit score threat. Nonetheless, Di Bartolomeo stated Bitcoin loans can bypass the necessity for credit score scores solely. Debtors put up 2:1 collateral, and lenders can liquidate immediately if the worth falls.
“We imagine Bitcoin is the world’s most pristine collateral. It trades 24/7, it’s deeply liquid, and transactions could be despatched globally in real-time,” Di Bartolomeo famous.
Ledn issued over $300 million in retail loans within the first quarter of 2025 and is on tempo to exceed $1 billion by yr’s finish, the agency stated. Moreover, in 2024, purchasers earned eight instances extra from Bitcoin’s appreciation than they paid in curiosity, with over 1,000 BTC withdrawn as extra collateral when costs climbed.
Di Bartolomeo added that increasingly high-net-worth people are turning to Bitcoin-backed loans. Relatively than cashing out, they’re leveraging their BTC holdings to entry onerous property like actual property, sustaining publicity to what they view as their best-performing funding.
“They need to preserve the publicity to their highest and finest performing asset, and nonetheless get to take pleasure in transferring into a brand new property with out promoting their Bitcoin.”
In Might, Seamus Rocca, CEO of the Gibraltar-based personal financial institution Xapo Financial institution, stated Bitcoin holders have gotten extra comfy borrowing in opposition to their crypto as market confidence grows.
On March 18, Xapo Financial institution launched a lending product that enables customers to borrow US {dollars} utilizing their Bitcoin as collateral. With the product, certified purchasers can entry as much as $1 million in loans whereas holding their BTC.
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