BTC Crypto-Backed Loans Finance Real Estate Without Selling Assets

Bitcoin holders are increasingly using crypto-backed loans to purchase real estate, retaining their Bitcoin positions and avoiding capital gains taxes incurred by liquidating their holdings. This growing trend benefits early crypto adopters, entrepreneurs, and high-net-worth individuals (“Bitcoin wealthy”) who may lack traditional lending qualifications or wish to leverage their largest asset.

Cryptocurrency platform Ledn’s co-founder, Mauricio Di Bartolomeo, told Cointelegraph that Bitcoin-backed lending models enable borrowers to leverage their crypto holdings without selling them. Crucially, since accessing a loan typically isn’t a taxable event, clients can obtain capital while preserving their upside from Bitcoin.

“Borrowing using your Bitcoin as collateral doesn’t typically trigger capital gains taxes in most jurisdictions because borrowing against an asset is generally not a taxable event—you are not selling your Bitcoin,” Di Bartolomeo explained.

BTC Loans Enable Quick Real Estate Transactions

Securing a Bitcoin loan generally involves posting BTC as collateral, commonly at a 50% loan-to-value (LTV) ratio, which can then be used to fund a property purchase. The average funding time reported by Ledn is 9.6 hours, facilitating prompt real estate acquisitions.

This financial model affords considerable flexibility: interest and fees accrue over the loan term without mandatory monthly payments. Borrowers can repay loans at any time without penalties and, provided the LTV remains under 60%, can renew them. Additionally, should the value of their collateral increase during the loan term, borrowers may withdraw the surplus.

Ledn’s Bitcoin loan calculator interface — *Ledn’s Bitcoin loan calculator. Source: Ledn*

Di Bartolomeo noted strong adoption of Ledn’s Bitcoin loans in Latin America, the United States, and parts of Europe. “The beauty of Bitcoin as collateral is that it is borderless,” the executive stated.

Volatility presents a valid concern, but the model provides safeguards: lenders monitor the LTV ratio. If Bitcoin prices fall and the LTV reaches 70%, the lender initiates a margin call requiring more collateral. If a 50% LTV loan reaches 80%, automated mechanisms step in: “If the LTV reaches 80%, the lender sells the necessary amount of BTC to repay the loan, returning any remainder to the borrower. Since the real estate transaction has already occurred, a liquidation doesn’t reverse the property purchase — it simply settles the loan.”

No Credit Checks Required for BTC Loans

Differentiating from traditional financing, cryptocurrency lending often bypasses credit score evaluations entirely. As Di Bartolomeo pointed out, “We believe Bitcoin is the world’s most pristine collateral. It trades 24/7, it is deeply liquid, and transactions can be sent globally in real-time.” This inherent liquidity and constant trading clock make it a preferred security type.

Ledn reported lending over $300 million in retail loans during the first quarter of 2025 and anticipates surpassing $1 billion by year-end. Notably, in 2024, its clients accumulated significant gains from Bitcoin appreciation, with holdings increasing by over 1,000 BTC throughout the year, yielding eight times the interest they paid.

“They want to keep the exposure to their highest and best performing asset, and still get to enjoy moving into a new property without selling their Bitcoin.”

This preference highlights a strategy: high-net-worth individuals utilize BTC loans to access tangible real estate assets while keeping their significant investments in bitcoin. As Di Bartolomeo observed, more clients are choosing this route to transform their Bitcoin holdings into hard assets without crystallizing gains.

As market confidence grows, more institutions are entering the space. CEO Seamus Rocca of Gibraltar-based Xapo Bank recently commented on increasing comfort levels among BTC holders regarding borrowing against their crypto assets. In March, Xapo launched a lending product enabling up to $1 million in USD loans secured by Bitcoin.