Bitcoin Collateral Loans: Every Platform Compared for 2026
You own Bitcoin. You need dollars. Selling triggers a tax event and kills your upside. A Bitcoin collateral loan solves both problems: you deposit BTC, borrow against it, and get your Bitcoin back when you repay.
The concept is simple. Choosing the right platform is not.
Nine platforms currently offer Bitcoin-backed loans, and the differences between them are bigger than the rates suggest. Custody model, chain, KYC requirements, liquidation mechanics, and fee structures all vary. Some hold your BTC on their balance sheet. Some lock it in a multisig. One keeps it on Bitcoin L1 in a vault only you control.
I have spent the last three years building in this space, so I will be upfront about my bias: I co-founded Ducat Protocol. But I have tried to make this comparison fair. Where a competitor does something better, I will say so.
The comparison table
Here is the full picture before we get into the details.
| Platform | Rate (APR) | Custody | KYC | Min Loan | Max LTV | Loan Currency |
|---|---|---|---|---|---|---|
| Lava | 5-6.5% | Non-custodial (DLCs) | No | Low | 50% | USDT |
| Strike | ~9.5% | Custodial | Yes | Varies | 50% | USD |
| Arch Lending | 9-12% | Custodial | Yes | $5,000 | 70% | USD/USDC |
| Ledn | 10-13% | Custodial | Yes | $1,000 | 50% | USD/USDC |
| Nexo | 6.9-13.9% | Custodial | Yes | $50 | 50% | USD/USDC/EUR |
| Coinbase | 8-14% | Custodial | Yes | Varies | 40% | USD |
| Hodl Hodl | Varies (P2P) | Multisig escrow | No | Varies | ~50% | USDT/USDC |
| Unchained | ~12%+ | Collaborative (2-of-3) | Yes | $150,000 | 40% | USD |
| Ducat | 1% origination, 0% ongoing | Non-custodial (FROST vault) | No | No minimum | 50% | UNIT/USDC |
Rates as of April 2026. Check each platform directly before borrowing.
What "custody" actually means for your Bitcoin
This is the single most important decision you will make, more important than the rate. Custody determines what happens to your Bitcoin if the platform fails.
Custodial means the company holds your BTC. Ledn, Nexo, Strike, Coinbase, and Arch Lending all fall into this bucket. Your Bitcoin moves to their wallet. If the company goes bankrupt, your BTC sits in a bankruptcy estate alongside every other creditor's claim. Ask anyone who deposited with Celsius how that process works. Three years later, some people still have not been made whole.
Custodial lenders can also rehypothecate your collateral, meaning they lend it out to someone else to earn additional yield. Ledn has explicitly said they do not do this. Others are less clear. If a platform is paying you yield on deposited BTC, your collateral is almost certainly being rehypothecated. The extra return you earn is compensation for the risk that the platform loses your Bitcoin while lending it out.
Collaborative custody means the keys are split. Unchained uses a 2-of-3 multisig: you hold one key, Unchained holds one, and a third-party key agent holds the last. Moving Bitcoin requires two of three signatures. This prevents Unchained from unilaterally moving your BTC, which is a genuine improvement over full custody. The catch: Unchained now only offers business loans with a $150,000 minimum.
Multisig escrow is what Hodl Hodl uses. Your BTC goes into a multisig address. Neither you nor the lender can move it alone. Disputes go through an escrow process. This is peer-to-peer lending with real trust minimisation, though the experience is more manual than CeFi alternatives and the liquidity is thinner.
Non-custodial means your BTC stays under your control. Lava uses Discreet Log Contracts (DLCs) on Bitcoin. Ducat uses FROST threshold signature vaults on Bitcoin L1. In both cases, no company holds your Bitcoin. If the platform's website goes down tomorrow, your collateral is still sitting in a vault you can interact with independently.
Platform-by-platform breakdown
Lava: the cheapest rate
5-6.5% APR is the lowest you will find. Lava is non-custodial, runs without KYC, and is built for short-term liquidity (one to three months). If your need is "I want dollars for 60 days and I want to pay as little interest as possible," Lava is hard to beat.
The limitation is the time horizon. Lava is not designed for twelve-month loans. The architecture favours quick, high-turnover borrowing. If you need longer-term capital, the rolling costs can add up.
Strike: no hidden fees
Strike charges around 9.5% APR with zero origination fees, zero closing fees, and zero nonsense. The rate is the rate. For borrowers who have been burned by platforms advertising "from 5.9% APR" and then tacking on a 2% origination fee plus closing costs, Strike's transparency is genuinely refreshing.
The tradeoff: it is custodial and requires KYC. But if you are already a Strike user (and millions of people are), the borrowing flow is built into an app you already trust.
Arch Lending: highest LTV
70% LTV is the headline. If you deposit $100,000 in BTC, Arch will lend you up to $70,000. That is $20,000 more than most competitors would offer against the same collateral. For borrowers who need maximum liquidity, that gap matters.
The risk: a 70% LTV means your liquidation threshold is much closer. A 30% BTC price drop could wipe out your collateral. At 50% LTV, you need a 50%+ drop. Arch targets larger, more sophisticated borrowers who understand this tradeoff. Their $5,000 minimum reflects that.
Ledn: the proven survivor
Ledn has been around since 2018. They have originated over $4 billion in Bitcoin-backed loans. They published proof of reserves when competitors were quietly insolvent. They survived 2022 without freezing withdrawals. In an industry where half the lenders went bust, Ledn's track record is their strongest selling point.
Rates are not the lowest (10-13% APR), but you are paying for institutional credibility. The B2X product, where loan proceeds are used to buy more BTC, is popular with borrowers who want to increase their position without fresh capital.
I wrote a if you want the full picture on how the two differ.
Nexo: lowest minimum
$50 minimum loan. That opens Bitcoin-backed borrowing to people who cannot meet the $1,000 or $5,000 minimums elsewhere. Nexo also offers the widest range of loan currencies (USD, EUR, GBP, stablecoins).
The catch is the tiered rate system. Nexo rewards holders of their NEXO token with lower rates. Base tier pays 13.9%. Platinum tier (10%+ portfolio in NEXO) pays 6.9%. If you do not want to hold a platform token to get a decent rate, that structure might annoy you.
Coinbase: brand you know
If you already hold BTC on Coinbase and want to borrow against it with zero new onboarding, this is the path of least resistance. The rate (8-14%) is competitive. The 40% LTV is conservative, which means you get less liquidity per BTC but also a bigger buffer before liquidation.
The convenience factor is real. No new account, no new app, no new KYC process. For many retail holders, that simplicity outweighs a percentage point or two on the rate.
Hodl Hodl: true peer-to-peer
Hodl Hodl has been facilitating Bitcoin-collateralised P2P loans since 2018 with no platform custody, operating through multiple bear markets without incident. Your BTC goes into a multisig escrow. You negotiate terms directly with lenders. Rates vary because every loan is an individual agreement.
The experience is more manual than CeFi. You are browsing offers, negotiating terms, and managing the loan yourself. Liquidity is thinner than centralised platforms. But for borrowers who want genuinely trust-minimised lending without a company in the middle, Hodl Hodl delivers.
Their sister platform Debifi targets institutional borrowers with loans up to 5 years, using a 4-key multisig (3-of-4 required to sign). Average APR around 10%.
Unchained: collaborative custody for businesses
Unchained pioneered the collaborative custody model for Bitcoin loans. Their 2-of-3 multisig means they cannot move your BTC without your signature. That is a meaningful improvement over pure custodial lending.
The major caveat: Unchained stopped offering consumer loans in January 2024. Business loans only now, with a $150,000 minimum. If you are a company or fund borrowing six figures against a BTC treasury, Unchained is worth considering. For individual borrowers, it is no longer an option.
Ducat: non-custodial with USDC output
Full disclosure: I built this.
Ducat charges a 1% origination fee and zero ongoing interest. No annual percentage rate ticking up while you hold the loan. Repay when you are ready and get your BTC back.
Your Bitcoin goes into a on Bitcoin L1. It is a 2-of-2 Taproot multisig: one key is yours, the other belongs to a Guardian network (11-of-15 MPC threshold). Neither party can move the BTC alone. If Ducat the company disappeared, your vault is still there on Bitcoin, governed by protocol rules.
You can borrow UNIT (Ducat's native stablecoin, issued as a ) or choose USDC directly. If you pick USDC, the protocol mints UNIT behind the scenes and converts it 1:1 via the Circle SDK. You get USDC, the second-largest stablecoin by market cap, without your BTC ever leaving Bitcoin L1. We covered this in detail in our .
No KYC. No minimum loan amount. No ongoing interest. The tradeoff: Ducat is newer than every other platform on this list. Less track record. Protocol risk rather than company risk. If that tradeoff concerns you, the custodial options above exist for a reason.
How to choose: the honest decision tree
If rate is everything: Lava at 5-6.5%. Nothing else comes close.
If you refuse to give up custody: Lava, Ducat, or Hodl Hodl. These three are the only options where no company holds your BTC.
If you want zero ongoing interest: Ducat. One-time 1% origination fee and nothing after that.
If you want the longest track record: Ledn since 2018, or Hodl Hodl since 2018.
If you need the highest LTV: Arch Lending at 70%.
If you need a tiny loan: Nexo at $50 minimum.
If you want USDC without custody risk: Ducat is currently the only platform offering this combination.
If KYC is a dealbreaker: Lava, Ducat, or Hodl Hodl.
What happened to Celsius, BlockFi, and Voyager?
If you are reading this article, you might be wondering about the platforms that are conspicuously absent. Celsius filed for bankruptcy in July 2022. BlockFi followed in November 2022. Voyager filed in July 2022.
All three were custodial. All three rehypothecated customer assets. All three used depositor funds to make risky bets that went wrong when the market turned. Celsius had $4.7 billion in customer assets when it froze withdrawals.
The common thread is not "lending is dangerous." It is that custodial platforms with opaque balance sheets had no external check on how they used your Bitcoin. The collateral went to their wallet, and from there, you had to trust them. That trust was misplaced.
This is not ancient history. It was less than four years ago. If you are considering any custodial Bitcoin loan platform, the single most important question to ask is: "What happens to my collateral if this company becomes insolvent?" If the answer is "it's on their balance sheet," you need to understand what that means.
For more on this, read our piece on .
What to look for in a Bitcoin loan platform
Rates get all the attention, but they are not the only thing that matters. A few questions worth asking before you deposit any BTC:
What is the real cost? Some platforms quote low APRs but charge a 1-2% origination fee on top. A 10% APR with a 2% origination fee is more expensive than 12% APR with no fees, depending on how long you hold the loan. Always calculate the total cost for your expected loan duration, not just the headline rate.
What happens during extreme volatility? In March 2020, Bitcoin dropped 50% in 48 hours. If your platform liquidates via market sell orders during a crash, you can get a worse price than the oracle reported. Ask how the platform handles liquidation: is it an auction, a market order, or a protocol-level mechanism? Ducat liquidates via on-chain protocol rules. Ledn and Nexo handle it internally.
Can the platform lend out your collateral? This is rehypothecation, and it is what killed Celsius. If the answer is "yes" or "we don't disclose that," treat it as a red flag. Non-custodial platforms eliminate this risk entirely because no company ever holds your BTC.
What is the track record? A platform can have the best rate and the best UX, but if it launched six months ago and holds your Bitcoin, you are the beta tester. Ledn and Hodl Hodl have survived since 2018. Ducat and Lava are newer but non-custodial, so the risk is protocol failure, not company insolvency. Different failure modes.
Do you actually need a loan? Worth asking honestly. If you need $2,000 for two months and you have $50,000 in BTC, borrowing makes sense. If you are borrowing at 70% LTV because you need every dollar you can get, you are one bad week in the market away from liquidation. That is not a loan; that is a leveraged bet. Be honest with yourself about which one you are doing.
Borrowing against Bitcoin and taxes
In most jurisdictions, taking a loan against Bitcoin is not a taxable event. You are not selling your BTC, so there is no capital gains trigger. Compare that to selling $50,000 of BTC to raise cash: if you bought that Bitcoin at $10,000, you are looking at $40,000 in taxable gains.
The tax advantage of borrowing versus selling is one of the main reasons this market exists. But two caveats: if your loan gets liquidated, that may constitute a taxable disposition in some jurisdictions. And tax law varies by country. The IRS FAQ on virtual currency covers the US side, but talk to a tax professional about your own situation.
We covered the tax angle in more detail in our .
FAQ
What is a Bitcoin collateral loan?
A Bitcoin collateral loan is a secured loan where you deposit BTC as collateral and receive dollars or stablecoins in return. You keep your Bitcoin position (no selling, no taxable event) and get liquid capital. When you repay the loan plus interest, you get your BTC back. If BTC drops below the liquidation threshold, the platform sells enough collateral to cover the loan.
Can I get a Bitcoin loan without KYC?
Yes. Lava, Ducat, and Hodl Hodl all offer Bitcoin-backed loans without identity verification. These are non-custodial or P2P platforms where no company holds your funds. Custodial platforms (Ledn, Nexo, Coinbase, Strike, Arch, Unchained) all require KYC because they hold your assets and must comply with financial regulations.
What is the best interest rate for a Bitcoin-backed loan?
Lava offers the lowest at 5-6.5% APR. Ducat charges a 1% origination fee with no ongoing interest, which is cheaper than any APR-based loan if you hold the position for more than a few months. Among custodial lenders, Strike at 9.5% (no fees) and Nexo at 6.9% (Platinum tier) are competitive, though Nexo's best rate requires holding their platform token.
What happens if Bitcoin price drops during my loan?
If BTC drops and your collateral falls below the platform's liquidation threshold (typically 120-135% of loan value), the platform sells enough of your BTC to cover the outstanding loan. You keep the dollars or stablecoins you borrowed, but lose some or all of your Bitcoin collateral. Higher LTV means you are closer to liquidation from the start. Keeping your LTV below 50% gives you significant breathing room against price drops.
Is it better to sell Bitcoin or borrow against it?
It depends on your tax situation and your conviction about Bitcoin's future price. If you believe BTC will be worth more later, borrowing lets you access cash now without giving up your position. You also avoid a taxable capital gains event. The risk: if BTC drops hard, you could lose your collateral to liquidation and end up worse off than if you had just sold. Borrowing is not free money. It is a bet that your Bitcoin will still be there when you repay.
Rates and terms accurate as of April 2026. Always check platforms directly before borrowing. This is not financial advice.
