What Are Crypto Loans?
Crypto loans allow you to take out loans using your cryptocurrency as collateral. Rather than liquidating your Bitcoin, Ethereum, or other digital assets, you secure them on a platform and obtain a loan, generally in fiat or stablecoins.
This enables you to maintain your investment while accessing liquid funds immediately.
How Do Crypto Loans Work?
The procedure is straightforward:
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Select a platform (centralized like CoinRabbit or decentralized like Aave).
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Put your cryptocurrency up as collateral.
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Obtain a loan based on your collateral’s value, usually between 30–70%.
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Repay the loan whenever you wish.
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Get your cryptocurrency back once it has been entirely repaid.
No credit checks. No need to sell. Just smarter use of capital.
Why Use Crypto Loans?
Crypto loans are advantageous when you wish to:
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Avoid selling during a market downturn — while still accessing liquidity
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Cover real-life expenses — like travel, education, or business
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Reinvest — by using borrowed funds to take new positions
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Postpone taxable events — in certain areas, borrowing does not initiate capital gains
They help you optimize the performance of your crypto without selling your long-term investments.
Popular Use Cases for Crypto Loans
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A long-term BTC investor needs cash for a down payment but wishes to retain ownership
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