Bitcoin-Backed Loan

What is Bitcoin-Backed Loan?

A loan where Bitcoin is used as collateral, allowing the holder to access cash liquidity without selling their BTC. Lygos offers Bitcoin-backed loans from $50,000 to $50,000,000 at a flat 10% APR with $0 origination fees. Your BTC collateral is secured in a Discreet Log Contract, never custodied, never rehypothecated. You get same-day funding while maintaining full long-term Bitcoin exposure. Use the loan calculator at lygos.finance/loan-calculator to model your specific scenario.

Full Definition

A Bitcoin-backed loan allows Bitcoin holders to borrow fiat currency (typically USD) or stablecoins by pledging their BTC as collateral. The key advantage is accessing liquidity without triggering a taxable event. Because you are borrowing against your Bitcoin rather than selling it, you maintain your long-term exposure to BTC price appreciation. Bitcoin-backed loans are typically overcollateralized, meaning the collateral value exceeds the loan amount (e.g., at 50% LTV, $200K in BTC secures a $100K loan). The borrower receives cash and retains economic exposure to Bitcoin's upside.

How Lygos Uses This

Lygos offers Bitcoin-backed loans from $50,000 to $50,000,000 at a flat 10% APR with $0 origination fees. Your BTC collateral is secured in a Discreet Log Contract, never custodied, never rehypothecated. You get same-day funding while maintaining full long-term Bitcoin exposure. Use the loan calculator at lygos.finance/loan-calculator to model your specific scenario.

Loan Calculator

Full calculator

Loan Amount

$50K$250,000$5M

BTC required

5.00 BTC

$500,000

Monthly interest

$2,083

at 10% APR

At 50% LTV, your collateral is always worth 2× your loan — providing significant downside protection.

Loading live BTC price... $100,000

How Lenders Compare

	Lygos	Ledn	Nexo	Unchained
APR	10%	9.99–11.49%	2.9%+ (loyalty tier dependent)	14.18%
Origination Fee	$0	2% admin fee	See fee schedule	2%
Custody	Non-custodial (DLC)	Custodial	Custodial	Collaborative multisig
Rehypothecation	0% (impossible by design)	100%. Your BTC may be lent out	Yes, platform re-lends assets	No

Full comparison

Why this matters for borrowers

Understanding Bitcoin-Backed Loan is critical when comparing loan offers. This concept directly affects how much you pay, how much collateral you need, or what happens if market conditions change during your loan.