Other reasons for taking out a crypto loan include adding leverage to a trading position. For example, if you are bullish on the long term prospects of bitcoin, you could take out a loan against your existing bitcoin holdings and subsequently use the loan proceeds to buy more bitcoin. This “leverages up” your exposure to bitcoin price changes. Flexible is Good The APR (annual percentage rate) for Bitcoin loans can be lower than standard personal loans. For example, companies offer crypto loans starting from 0% with a maximum APR of 13.9%. The strength of your interest rate typically depends on the loan-to-value (LTV) ratio, the ratio of the value of the loan you’re looking to take out against the total value of your portfolio, and your holdings of certain currencies.

What the Banking Crisis Means for NFTs What Are Crypto Loans? Over the past several years, cryptocurrency has grown from a fringe financial interest to an asset traded on mainstream investment platforms. As crypto becomes more mainstream, lenders have begun to offer crypto loans, which let you use your cryptocurrency as collateral — similar to how a house or car could be used to secure a mortgage or auto loan, respectively.