Last Updated on July 2, 2025 by Olga Davis
Key Takeways
- CoinRabbit – Fast & Easy Bitcoin Backed Loans
- Unchained – Best for High-Security BTC Loans
- YouHodler – Best for Advanced Tools & Multi-Asset Flexibility
- Binance Loans – Best for Existing Binance Users
- Aave – Best DeFi Option for BTC Loans (via wBTC)

What Are Bitcoin Backed Loans?
Bitcoin backed loans let you borrow cash or stablecoins by using your BTC as collateral — without having to sell it. Instead of triggering capital gains tax, you temporarily lock your Bitcoin with a lending platform and receive liquidity in return. Once you repay the loan (plus interest), you regain access to your BTC.
These loans are fast, often don’t require credit checks, and help you maintain long-term exposure to Bitcoin. But beware — if the price of BTC drops and your loan-to-value (LTV) ratio exceeds the limit, your collateral could be liquidated.
How Do Bitcoin Backed Loans Work?
Taking out a Bitcoin backed loan is actually pretty simple — especially if you’ve ever used collateral before. Here’s how it works:
1) You send in your Bitcoin.
First, you deposit some BTC into the platform. This acts as your collateral — kind of like handing over your car title when getting a traditional secured loan.
2) You get a loan based on your BTC’s value.
The platform checks how much your Bitcoin is worth right now and lets you borrow a percentage of that — called the Loan-to-Value (LTV) ratio.
For example: If BTC is worth $10,000 and the LTV is 70%, you can borrow $7,000.
3) You pay interest as you go.
Over time, you repay the loan — plus a bit of interest. Some platforms have flexible deadlines, others set fixed terms. Some even let you repay early with no fees.
4) Once you pay it back, your BTC is returned.
After you’ve paid off the loan, you get your full Bitcoin back, just like it was — minus the stress of selling it during a dip.
But here’s the catch:
If Bitcoin’s price drops too far and your loan becomes too “high-risk” (meaning your LTV gets too high), the platform might liquidate your BTC — selling some or all of it to cover the loan. You could lose your collateral if you’re not careful.
That’s why it’s important to:
1) Watch your LTV ratio
2) Add more BTC as collateral if needed
3) Or repay part of the loan to rebalance things (if necessary)
Best Bitcoin Backed Loans in 2025

🥇 1. CoinRabbit – Best Bitcoin Loans for Speed and Simplicity
CoinRabbit is a crypto lending platform that enables users to borrow over 12 stablecoins by using Bitcoin or more than 300 supported crypto assets as collateral. The platform offers a streamlined, credit-check-free process designed for speed and simplicity.
Borrowers can access up to 90% of their collateral’s value, with no fixed repayment deadlines. This open-term structure provides flexibility for users who need fast, frictionless access to stablecoins without rigid loan schedules.
Pros:
- Instant approval, no credit checks
- High LTV (up to 90%)
- Fixed interest, no deadlines
Cons:
- Centralized platform
✅ Perfect for: crypto users who value speed and ease of use without overcomplicating the process.

🥈 2. Unchained – Best Bitcoin Backed Loans for Security
Unchained is a leading name in Bitcoin-native financial services, offering USD loans backed by BTC. The key difference? Your BTC collateral is held in a multisig vault where you retain one key, Unchained holds another, and a third is held by a trusted third party.
This transparency appeals to institutional clients, miners, and serious holders who demand custodial control and compliance.
Pros:
- Multisig custody with shared control
- Loans paid in fiat (USD)
- Excellent security and transparency
Cons:
- U.S. only
- Higher loan minimums
- Slower onboarding than crypto-native options
✅ Perfect for: high-net-worth individuals and businesses that require transparency and custody assurance.
🥉 3. YouHodler – Best for Advanced Tools & Multi-Asset Flexibility
YouHodler offers much more than basic Bitcoin backed loans. It supports over 30 crypto assets as collateral — including ETH, LTC, and stablecoins — and provides innovative tools like Turbocharge and MultiHODL for users who want to experiment with leverage or stacked loan structures.
Pros:
- Supports many cryptocurrencies
- Innovative tools for experienced users
- Quick setup and crypto-to-crypto lending
Cons:
- Riskier tools (not beginner-friendly)
- Centralized platform
✅ Perfect for: power users looking to borrow against multiple assets and explore advanced strategies.
4. Binance Loans – Best for Existing Binance Users
If you already use Binance for trading, its loan service is well integrated. You can borrow against BTC and other assets directly from your spot wallet, with flexible terms and relatively low interest rates.
However, Binance custody means full control over your BTC is relinquished, and the service is not available to U.S. residents.
Pros:
- Seamless for Binance users
- Competitive APR
- Flexible repayment terms
Cons:
- Not available in the U.S.
- Centralized custody
- Limited transparency on loan mechanics
✅ Perfect for: active Binance traders who want to borrow without leaving the ecosystem.

5. Aave – Best DeFi Option for BTC-Backed Loans (via wBTC)
Aave is the most established decentralized lending platform on Ethereum. While it doesn’t accept native BTC directly, users can wrap BTC into wBTC and borrow against it using Aave smart contracts.
It’s non-custodial, permissionless, and transparent — ideal for users who value decentralization and don’t mind some technical overhead.
Pros:
- Fully decentralized and trustless
- Non-custodial lending
- Transparent interest rates and logic
Cons:
- Requires wrapped BTC (wBTC)
- Smart contract risk
- UX complexity, high gas fees
✅ Perfect for: DeFi-native users who want to avoid centralized platforms altogether.
How to Choose the Right Bitcoin Backed Loan
Before choosing a lender, ask yourself:
Factor | What to Consider |
---|---|
LTV | How much can you borrow against your BTC? Higher LTV = more risk + more reward. |
Custody | Who controls your Bitcoin during the loan? You or the lender? |
Speed & Verification | Do you need it fast? Do you want to skip identity checks? |
Fiat vs Crypto | Do you want fiat cash or crypto (USDT/USDC) as the loan? |
Extra Features | Do you need tools for leverage, automation, or portfolio strategy? |