What Is Crypto As Collateral?

When you want to buy something – a new set of wheels, the ultimate gaming setup, a bar of gold, anything you choose – but don’t want to sell your crypto to buy it, you can collateralize your crypto. Pass it to us to hold on your behalf, and you can borrow as much as 50% of its value in fiat currency (e.g. US dollars).

When the loan is repaid, the crypto is returned to you. This means that you don’t need to sell your crypto, and that you still benefit from any gain in the value of it. You’re turning one asset into two…

How it works

How Do Crypto Loans Work?

  • Apply for a loan

    We are able to provide you with a loan in USDC, for up to 50% of the value of the crypto that you’re using as collateral.

    There is no credit check – your crypto is good enough for us.

  • Deposit your crypto

    Deposit your crypto with our custodian partner (where it’s insured and protected by bank-level security).

  • We use your crypto as collateral for your loan

    You’re now free to use your loan however and whenever you wish. There are no fees, and your interest is added to the principle of the loan, so there’s no monthly interest payments to make either.

  • Borrow, repay, borrow again

    You can borrow as little or as much as you want with your loan, up to your borrowing limit – and as often as you choose. As long as your crypto is held with our custodian you’re free to use the facility at your own discretion – and you only pay interest on what you’ve borrowed.

  • Take your crypto back

    Your crypto stays as crypto, and is returned to you in full when you no longer need your loan and have repaid your borrowing.

Why use your crypto as collateral?

  • You’ve been holding crypto through the depths of the market – why sell it now when you can use it as collateral and benefit from any future increase in its value?
  • There’s no need to move your crypto into a fiat currency – your crypto stays as crypto. You won’t incur exchange fees for conversion and withdrawal to fiat.
  • Because you’re not realising any investment gains, you’re not creating an extra tax liability for yourself.

Frequently asked Questions

What cryptocurrencies Can I Use As Collateral?

We’re currently accepting Bitcoin and Ethereum as collateral for our crypto loans, and plan to add other cryptocurrencies to the list very soon.

Do I Need To Sell Any Of My Crypto To Fund My Loan?

No, you do not need to sell any of your crypto to fund your loan. Your crypto stays as crypto, held with our custodian partner over the duration of the loan.

Does My Crypto Change In Value While It Is Deposited With BlockLender?

As the price of crypto changes, so the value of your crypto deposited with us changes. This means that you do not lose out on any potential appreciation in the value of your crypto during the life of the loan.

Can I Access My Crypto While It Is Deposited With BlockLender?

You are not able to access your crypto while it is deposited with BlockLender in support of your crypto mortgage. However, it is held in custody by our custodian partner, and becomes yours again when the loan is repaid.

What Happens When The Value Of My Crypto Falls?

When the value of your crypto falls below a certain level, e.g. 55% of its original value, we contact you to arrange a top- up. If it falls further without being topped up, e.g. to 45% of its original value, we may liquidate all or part of it to cover any outstanding borrowings for the cash down-payment.

Get in touch.

Any questions? Contact us at hello@blocklender.io
Founded in 2022, we’re on a mission to bring crypto to life in the real world.
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