Crypto-Backed Loans
If you hold Bitcoin, Ethereum, or other major cryptocurrencies, you don’t need to sell to access liquidity. A crypto-backed loan lets you borrow against your digital assets while keeping your position intact – avoiding a forced sale and the tax event that can come with it.
At a Glance
| Minimum loan size | Typically from around £100,000 |
| Loan-to-value | Commonly around 50% for Bitcoin and Ethereum; ranges from as low as 10% for volatile coins up to 70% for the most established assets |
| Eligible collateral | Bitcoin and Ethereum most commonly; Solana and major stablecoins with some lenders |
| Speed | Underwriting is often faster than conventional lending, since crypto can be valued and liquidated quickly |
| Regulatory status | Generally unregulated borrowing in the UK |
How Much You Can Borrow
The amount available depends heavily on which specific coin you’re pledging. Bitcoin and Ethereum, being the most liquid and widely accepted, commonly support an LTV around 50% – so a portfolio valued at £200,000 might support a £100,000 loan. More volatile or less established coins are treated far more cautiously, sometimes as low as 10%, and many lenders won’t accept them as collateral at all.
Why Few Mainstream Banks Offer This
High street banks remain largely absent from crypto-backed lending, not from lack of interest, but because their compliance and anti-money-laundering frameworks are built around standard asset classes like property and listed securities, and documenting source of funds for cryptocurrency remains genuinely difficult for them. This is why the market is served by specialist and boutique lenders rather than mainstream institutions.
What Happens if the Value of Your Crypto Falls
If your pledged cryptocurrency falls significantly in value, the lender will typically require additional collateral to restore the agreed loan-to-value – a margin call. If you can’t provide this within the required timeframe, the lender may partially liquidate your pledged assets. Exact thresholds vary by lender and custody arrangement. Many borrowers choose a more conservative loan-to-value than the maximum on offer specifically to reduce this risk.
What Proceeds Are Used For
Common uses include funding a UK property purchase, refinancing existing liabilities, business investment, working capital, or general liquidity management, without triggering a capital gains liability on an appreciated holding the way an outright sale would.
Custody Arrangements
Your pledged cryptocurrency is typically held by the lender or a specialist custodian for the loan term and returned once the balance is repaid in full.
Tax Considerations
Borrowing against cryptocurrency isn’t itself a disposal for capital gains tax purposes – no CGT arises simply from pledging crypto as collateral. A disposal only arises if the pledged crypto is later sold. Given how actively HMRC’s approach to cryptoasset taxation continues to develop, it’s worth taking current, qualified tax advice; we are lending specialists, not tax advisers.
Comparison With Traditional Securities Lending
| Crypto-Backed Loan | Stock Loan | Lombard Loan | |
| Collateral | Bitcoin, Ethereum, select others | Listed equities | Diversified portfolio |
| Typical LTV | ~50%, range 10-70% | 45-65% | Up to 65% |
| Speed | Often very fast | Days to weeks | 1-3 weeks |
If you hold both crypto and conventional investments, it’s often worth comparing this against our Stock Loans and Lombard Loans pages.
Using Proceeds for a UK Property Purchase
Our High Value Mortgages page covers how larger UK property transactions are generally assessed, relevant if you’re combining crypto-backed proceeds with conventional property finance.
Our Process
- Initial consultation – we discuss your holdings, amount, and intended use of funds
- Collateral assessment – we confirm which assets are acceptable to lenders and at what LTV
- Lender matching – we approach specialist providers genuinely suited to your coins and amount
- Custody and documentation – we manage the transfer and finalise terms
- Funding – funds are typically released quickly once confirmed
Frequently Asked Questions
What’s the minimum loan size?
Typically from around £100,000, though this varies by lender.
Which cryptocurrencies can I use?
Bitcoin and Ethereum are most widely accepted; some lenders also accept Solana and major stablecoins.
Does borrowing against crypto trigger a tax event?
Not at the point of borrowing – only a later sale of the pledged crypto creates a taxable disposal.
Why don’t mainstream banks offer this?
Their compliance frameworks are built around traditional asset classes and haven’t yet fully adapted to digital assets.
Get in touch with details of your crypto holdings and funding requirements, and we’ll help you understand whether this is the right route for you.
