Crypto-Backed Loans, Explained: How to Unlock Cash Without Selling Your Bitcoin

In brief

Crypto-backed loans give holders cash against their coins without selling, generally avoiding a capital-gains event.
Figure advises borrowers to compare four things when shopping: max loan-to-value, fixed vs. variable rate, licensing, and liquidation terms.
Licensing and liquidation protection matter more than the headline rate, says the crypto lender, and the product suits only holders comfortable with margin-call risk.

If you believe in your crypto, selling it to cover a short-term cash need is the one move you’d rather not make. Sell, and you trigger a taxable event and give up any future upside. A crypto-backed loan offers another path: borrow cash against your holdings while keeping every coin.

Here’s the mechanics. You pledge Bitcoin, Ethereum, or Solana as collateral, and a lender advances you cash—with Figure it’s up to 75% of your collateral’s value*. You keep ownership of the crypto the entire time. No sale, and because borrowing isn’t a sale, generally no capital-gains event (this isn’t tax advice—check with a professional on your situation).

The category has matured fast, and not every lender is built the same. Four things separate a serious platform from a risky one — and they’re exactly what you should compare when shopping for the best crypto-backed loan:

Fixed vs. variable rates. Some lenders quote a low teaser rate that floats with the market. Figure’s crypto-backed loan carries a fixed rate* for the life of the loan, so your payment doesn’t move when the market does.

Regulation and licensing. The CeFi lender collapses of 2022 taught the market a hard lesson: “crypto lender” and “licensed lender” are not the same thing. Figure Lending LLC is a licensed lender (NMLS #1717824)—a materially different risk profile than an unregulated offshore platform holding your coins.

Speed without a credit drag. Figure funds same-day and requires no credit score. Approval is based on your collateral, not your FICO.

Downside protection. Crypto is volatile, and a sharp price drop can trigger liquidation. Figure offers optional Liquidation Protection** (available in select states) that defers price-based liquidation for the loan term—so a temporary dip doesn’t force a sale at the worst possible moment.

Rate matters, but it’s the last thing that protects you when volatility hits. The lender’s licensing and its liquidation terms** are what actually stand between you and a forced sale. So compare all four: maximum loan-to-value, fixed vs. variable rate, regulatory standing, and what happens to your collateral if the market moves against you.

Crypto-backed loans aren’t for everyone—if a margin call would keep you up at night, this isn’t your tool. But for long-term holders who need liquidity without selling, a fixed-rate*, fully licensed loan is one of the most efficient ways to put your crypto to work while keeping it.

Learn more about Figure’s crypto-backed loan and earn $50 when you deposit $500.

Disclaimer

Figure Lending LLC dba Figure 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. (888) 819-6388. NMLS ID 1717824. For licensing information go to www.nmlsconsumeraccess.org Equal Opportunity Lender.

This site is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated through this site.

Crypto-Backed Loan Availability (Only in select jurisdictions):

Crypto loans are offered to U.S. borrowers by Figure Lending LLC. This product is not available to U.S. residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.

Prior to account opening, customers must read the relevant risk disclosure statements on our Disclosures page. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.

Investing in cryptocurrencies involves significant risks. Cryptocurrency trading is not available in NY. Please click here for risk disclosures on investing and trading in cryptocurrencies.

Figure Payments Corporation offers self-directed investors and traders cryptocurrency services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. Figure Payments Corporation’s NMLS ID number is 2033432, and is located at 100 West Liberty Street, Suite 600, Reno, NV., 89501. You can verify Figure Payments licensing status at the NMLS Consumer Access website. Click here for Figure Crypto’s state license and regulatory disclosures.

Crypto loans are offered through Figure Markets Credit LLC to residents of the state of New York and to international customers except in the following jurisdictions: Crimea (Ukraine), Donetsk (Ukraine), Luhansk (Ukraine), Afghanistan, Albania, Belarus, Central African Republic, Congo (the Democratic Republic), Cuba, Ethiopia, Haiti, Iran (Islamic Republic of), Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Nigeria, North Korea (Democratic People’s Republic of), Pakistan, Palestine (State of), Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen, or Zimbabwe.

*Maximum APR: 12.62% APR (APR includes interest plus applicable fees such as the 1% origination fee). Available interest rates for Figure’s Crypto-Backed Loan are 8.91% (9.999% APR) at 50% LTV or 11.50% (12.62% APR) up to 75%. Repayment period is 12 months.

Representative Example (Total Cost): As an example, a borrower receives a Crypto Backed Loan at 50% LTV of $10,000 for a term of 12 months, with an interest rate of 8.91% and a 1% origination fee of $100, for an APR of 9.999%. In this example, the borrower will receive $10,000 and will make 12 monthly payments of $74.25. Rates will be higher for applications secured by assets with a higher LTV ratio. The Figure Crypto-Backed Loan has a 12 month interest-only repayment term and allows for a maximum initial LTV ratio of 75%. Interest rates change frequently so your exact interest rate will depend on the date you apply and may depend on many factors such as LTV ratio.

** Liquidations will still occur if the loan becomes delinquent. Liquidation Protection applies only to margin calls and liquidations related to price declines, not to missed payments, defaults, or violations of loan terms. Liquidation protection is only available in CA, NY, FL, PA, AL, AK, GA, HI, MA, UT. More information about liquidation protection can be found here.

Crypto borrowing is generally non-taxable, but liquidation triggers an IRS taxable sale. Not tax advice; consult a CPA.

Paid endorsement by Figure Technology Solutions, Inc. The information contained herein is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities. Consult a financial advisor before making any decisions.

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