Crypto-Backed Loans: Borrow Cash While Keeping Your Bitcoin
Crypto-backed loans let holders borrow cash against Bitcoin, Ethereum, or Solana without triggering a sale, preserving ownership and potentially avoiding capital gains. Figure advises comparing max loan-to-value, rate type, licensing, and liquidation terms; its fixed-rate loans fund same-day with no credit check.
Quick Take
Borrow up to 75% of Bitcoin, Ethereum, or Solana collateral without selling.
Fixed-rate, licensed lender NMLS #1717824 with same-day funding and no credit score.
Compare licensing and liquidation terms before headline rates to avoid forced sales.
Optional Liquidation Protection defers price-based liquidation in select states.
Market Impact Analysis
NeutralSponsored educational article on crypto-backed loans; no market-moving news or direct price catalyst.
Speculation Analysis
Key Takeaways
- Figure now lets crypto holders borrow up to 75% of BTC, ETH, or SOL collateral without selling.
- The loans carry fixed rates for the full term, with same-day funding and no credit score requirement.
- Figure Lending LLC is a licensed lender (NMLS #1717824), a key differentiator from unregulated platforms.
- Optional Liquidation Protection in select states defers forced sales during price drops.
What Happened
Figure is expanding its lending product line with crypto-backed loans that allow holders of Bitcoin, Ethereum, or Solana to borrow cash without selling their assets. The product targets long-term investors who need liquidity but want to avoid triggering taxable events or giving up upside potential. Borrowers pledge crypto as collateral and receive up to 75% of its value in cash, while retaining ownership. The loans come with fixed rates for the entire term, same-day funding, and no credit score requirement. Figure Lending LLC, the entity behind the product, is a licensed lender with NMLS #1717824, which the company says sets it apart from unregulated offshore platforms that collapsed in 2022.
The Numbers
The headline figure is the maximum loan-to-value ratio: 75% of collateral value. That means a borrower pledging $100,000 in Bitcoin could receive up to $75,000 in cash. The fixed rate applies for the life of the loan, eliminating variable-rate risk. Same-day funding means approved borrowers can access cash within 24 hours, and the absence of a credit score check makes the product accessible to those with thin credit files. Figure also offers optional Liquidation Protection in select states, which defers price-based liquidation for the loan term—a feature designed to prevent forced sales during temporary market dips.
Why It Happened
The crypto lending market is maturing after the high-profile collapses of centralized lenders like Celsius and BlockFi in 2022. Those failures underscored the importance of regulatory licensing and transparent liquidation terms. Figure is positioning its product as a safer alternative by emphasizing its licensed status and fixed-rate structure. The demand for crypto-backed loans persists because long-term holders often need cash for expenses but are reluctant to sell assets they believe will appreciate. By allowing borrowing against crypto, Figure taps into a use case that avoids capital gains taxes and preserves upside, while generating interest income for the lender.
What to Watch Next
- Monitor whether Figure expands Liquidation Protection to all states or adds more collateral types beyond BTC, ETH, and SOL.
- Watch for competitor lenders adjusting their LTV ratios or rate structures in response to Figure's fixed-rate offering.
- Track regulatory developments around crypto lending, as licensing requirements could tighten or shift after the 2022 failures.
This article is for informational purposes only and does not constitute financial advice.
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