Collateral, Loan Amount, and LTV
Three numbers are linked: the amount you borrow, the collateral you post, and your loan-to-value (LTV) ratio. Fix any two and the third is determined.
The formula
Required collateral value = Loan amount ÷ LTV. For a $40,000 loan at 40% LTV, you need $100,000 of BTC. At today's price, that's converted into a specific amount of Bitcoin.
Try It Yourself
Use the calculator to see how the required collateral changes as you adjust the loan amount and LTV. A lower LTV asks for more collateral but gives you a larger safety buffer.
Liquidation Price
BTC price at which your loan may be liquidated
Annual Percentage Rate
Variable rate based on market conditions
Estimated Interest
Based on current loan amount and APR
Lower LTV, bigger cushion
At 40% LTV, Bitcoin would need to fall a long way before you approach liquidation. Borrowing at the maximum 60% leaves much less room.
What's Deducted Before You Receive Funds
Your required collateral also accounts for the small costs taken out of the loan — chiefly the 2% origination fee and a network fee — so the amount you actually receive is slightly less than the headline loan amount.
Was this article helpful?