Bitcoin Loan Alternatives: A Complete Comparison
Not all Bitcoin loans are the same.
When accessing liquidity against your Bitcoin, you have several options. Understanding the differences between BTC-to-BTC lending and traditional fiat-denominated loans helps you make informed decisions.
In Short
- Two main categories: Fiat-denominated loans (traditional) and BTC-to-BTC loans (Bitcoin-native).
- Key differences: LTV ratios, margin call risk, liquidation protection, and fee structures vary significantly.
- Best fit: BTC-to-BTC loans suit long-term holders who want to avoid margin calls and liquidation risk.
- Compare carefully: Look beyond just LTV and fees—consider liquidation risk, margin call frequency, and structural differences.
The Two Main Categories
Fiat-Denominated Loans (Traditional)
You stake Bitcoin as collateral but receive USD, USDC, or other fiat currencies. The loan amount is fixed in fiat, creating asset mismatch.
Common providers: Ledn, Unchained, Strike, Nexo, and others.
Typical LTV: 50-70%
APR: 10-20% annual interest rates
BTC-to-BTC Loans (Bitcoin-Native)
You stake Bitcoin and receive Bitcoin as the loan. Both sides are the same asset, eliminating margin call and liquidation risk.
Provider: Loan My Coins (introducer)
LTV: Up to 95%
Fee: 5% upfront (no ongoing interest)
How Bitcoin Loan Alternatives Compare
| Feature | Fiat Loans (Ledn, Unchained, etc.) | BTC-to-BTC (Loan My Coins) |
|---|---|---|
| Loan Currency | USD, USDC, or other fiat | Bitcoin (BTC) |
| Maximum LTV | 50-70% (most common) | 95% |
| Margin Calls | Yes - triggered by price drops | None - impossible with BTC-to-BTC |
| Liquidation Risk | Yes - forced sales at 80-85% LTV | None - no liquidation mechanism |
| Fee Structure | 10-20% APR (ongoing interest) | 5% upfront (one-time fee) |
| Price Volatility Impact | High - affects LTV and triggers margin calls | None - LTV remains constant |
| Risk Score (Zone21) | 29-66 (Medium to High) | 10 (Low) |
| Best For | Short-term liquidity needs | Long-term holders avoiding liquidation risk |
What Makes BTC-to-BTC Different
1. Asset Alignment
Fiat loans: Bitcoin collateral + USD loan = asset mismatch. This creates margin call risk.
BTC-to-BTC: Bitcoin collateral + Bitcoin loan = perfect alignment. No mismatch means no margin calls.
2. Liquidation Protection
Fiat loans: Liquidate at 80-85% LTV when Bitcoin price drops. Forced sales during downturns.
BTC-to-BTC: Liquidation is mathematically impossible. Both sides move together, so LTV stays constant.
3. Fee Structure
Fiat loans: Ongoing annual interest (10-20% APR) compounds over time. Total cost increases with loan duration.
BTC-to-BTC: One-time 5% upfront fee. No ongoing interest. Predictable total cost regardless of duration.
4. Capital Efficiency
Fiat loans: Lower LTV (50-70%) means locking up more Bitcoin for less liquidity.
BTC-to-BTC: Higher LTV (95%) means accessing more value while keeping your stack intact.
Which Alternative Fits Your Situation
Choose Fiat Loans If:
- You need immediate USD liquidity
- You're comfortable managing margin call risk
- You want short-term leverage (under 12 months)
- You actively monitor Bitcoin prices
- You can add collateral during downturns
Choose BTC-to-BTC If:
- You're a long-term Bitcoin holder
- You want to eliminate liquidation risk
- You prefer predictable, fixed fees
- You don't want to monitor prices daily
- You want maximum capital efficiency (95% LTV)
- You value Bitcoin-only solutions
Specific Provider Comparisons
For detailed comparisons with specific providers, see our dedicated comparison pages:
Ready to Compare Your Options?
Use our calculator to model different scenarios and see how BTC-to-BTC lending compares to traditional alternatives in your specific situation.
Important: Loan My Coins acts solely as an introducer. All loans and agreements are entered into directly with an independent loan provider. We do not provide financial advice. Always do your own research and consult with professionals as needed.