Last Updated on July 15, 2025 by Olga Davis
Key Takeaways
- Crypto millionaires use Bitcoin loans to access liquidity without selling their assets.
- This helps them avoid capital gains tax and retain exposure to Bitcoin’s future upside.
- Bitcoin loans fund real estate, business expansion, and portfolio diversification
Why Crypto Millionaires Don’t Sell Their Bitcoin
For many crypto millionaires, selling Bitcoin is no longer the obvious move it once was. It’s not just about belief in the asset — it’s about what’s lost in the process. Selling means giving up future upside, reducing long-term exposure, and turning a strategic holding into spent capital. For someone with a $5 million position, it can also mean a permanent exit from an asset that continues to define long-term digital wealth.
That’s why more and more crypto millionaires are choosing to borrow instead. With Bitcoin loans, they can access capital without selling their coins. The BTC stays in their portfolio, untouched and appreciating, while they receive liquidity in stablecoins — ready to use for anything from real estate to business growth.
How Bitcoin Loans Offer a Tax-Friendly Strategy for Crypto Millionaires
One of the biggest advantages of this strategy is tax efficiency. When Bitcoin is sold, it triggers a taxable event, often incurring 20% to 37% in capital gains tax, depending on the jurisdiction. But when a crypto millionaire borrows against their BTC, no sale occurs. The loan is treated as debt, not income, and that distinction changes everything.
With the asset held as collateral, no gain is realized and no tax is owed. The BTC is simply locked during the loan term and returned after repayment. Meanwhile, the borrower is free to use the funds for any purpose.
For those who need fast access to capital, Bitcoin loans offer speed, flexibility, and a way to put wealth to work without disrupting long-term strategy. Unlike traditional bank loans, most platforms don’t require income checks or credit history, just the crypto itself.
How Crypto Millionaires Use Bitcoin Loans in Real Life
Crypto millionaires are using Bitcoin loans in different ways: some are purchasing real estate in markets where traditional banks hesitate to lend. Others are using loans to fund business expansion, rebalance their portfolios, or cover short-term cash needs — all while keeping their Bitcoin intact and avoiding capital gains taxes. Let’s look at how it works in practice.
Bitcoin Loans to Buy Real Estate
Lana had been in crypto since 2016: she mined ETH back when few people outside the space took it seriously. Nearly a decade later, her portfolio had grown into something substantial. When she came across a villa in Uluwatu, perched above the cliffs, with a view straight out to the Indian Ocean, she knew it was the kind of place she didn’t want to let slip.
The price was just under $1 million. She thought about selling some of her BTC to cover it, but the tax bill alone would’ve taken a quarter of the value. Instead, she used a Bitcoin loan. She pledged $2 million in BTC, borrowed $1 million in stablecoins, and closed the deal in cash – all within the same day.
How Crypto Millionaires Fund Startups Using Bitcoin Loans
Ali, a DeFi founder and long-time crypto holder, had reached a turning point with his analytics platform. Usage was growing, feedback was strong, and he needed $400,000 to scale: hire engineers, launch new features, and accelerate marketing. He considered raising a seed round, but the tradeoff didn’t feel right. Giving up equity and control this early wasn’t part of the vision.
Instead, Ali posted $800,000 in Bitcoin as collateral and took out a loan. The process took less than a day. No investor decks, no negotiation, no dilution — just capital, secured by assets he already held.
“I didn’t need funding, I needed flexibility. Bitcoin gave me that.”
Diversify Without Selling Bitcoin
Luis had been in Bitcoin since the early days — not a trader, but a steady believer. Over the years, his holdings grew into a multi-million dollar portfolio. But as the market matured, so did his thinking. Over time, he began to see that volatility wasn’t the only concern: being too heavily invested in crypto had its own risks. He wasn’t ready to walk away from it, just looking for a smarter way to reduce exposure. But selling wasn’t ideal: it came with tax implications, market timing risks, and a long-term position he still trusted.
Instead, Luis took out a Bitcoin-backed loan. He pledged just over $1.2 million in BTC and borrowed $600,000 in stablecoins. No capital gains, no need to touch the underlying asset.
He split the funds across three investments:
- A clean energy ETF portfolio he’d been watching for months,
- An early-stage AI startup he personally believed in,
- And a residential co-living project in Lisbon with strong rental upside.
None of these were impulsive, Luis did his due diligence. But what made the move possible was the loan structure, since it gave him liquidity without forcing a tradeoff.
How Bitcoin Loans Work?
For all their power, Bitcoin loans are straightforward. Here’s how it works:
- Collateral. You deposit Bitcoin into a lending platform. Most offer 50–90% loan-to-value (LTV).
- Payout. You receive stablecoins in 10 minutes, all without lengthy verifications.
- Loan Term. You pay interest over time. Some loans have no monthly payments; you can repay when ready.
- Redemption. Once the loan is repaid, your Bitcoin is unlocked and returned.
If BTC appreciates while locked, you still benefit. If needed, some platforms allow top-ups or partial withdrawals based on market movement. This structure is ideal for crypto millionaires seeking flexibility, tax efficiency, and capital access — without compromising ownership.
Last Thoughts on the Financial Habits of Crypto Millionaires
For crypto millionaires, the value of a Bitcoin loan lies not in the strategy, but in the execution. Timing, clarity, and security all matter.
CoinRabbit is one of the platforms worth considering, particularly for those who value speed and simplicity. Here’s what makes it stand out:
- Fast access to liquidity — No lengthy approval processes; funds arrive within minutes.
- Fixed interest rates — No surprises during market volatility.
- No credit checks — Only your Bitcoin matters, not your bank history.
- 24/7 availability — Loans can be initiated anytime, from anywhere.
