Clapp launches crypto-backed revolving credit line with 0% interest on unused funds
Clapp has launched a crypto-backed revolving credit line that lets users borrow against Bitcoin (BTC) and Ethereum (ETH). Users deposit BTC or ETH as collateral and receive a borrowing limit tied to the market value of the collateral. Unused credit carries a 0% interest rate; interest only accrues on amounts actually drawn and is calculated by loan-to-value (LTV). The line supports on-demand draws, flexible penalty-free repayments with no fixed maturity, and interest stops immediately on repaid amounts. Clapp stresses conservative risk management — keeping LTVs low (for example, under 20%) reduces liquidation risk and lowers borrowing costs — and positions the product for short-term or intermittent liquidity needs rather than long-term leverage. Operational details: Clapp operates as a licensed VASP and uses Fireblocks for custody. Key SEO keywords: crypto credit line, BTC, ETH, 0% interest, loan-to-value, revolving credit.
Neutral
This product is unlikely to move BTC or ETH prices strongly by itself. Positive aspects: easier access to short-term liquidity may increase on-chain activity and make it marginally easier for holders to avoid selling assets in a pinch, which can be price-supportive. The 0% interest on unused credit is mainly a marketing point; interest is charged on drawn amounts based on LTV, and Clapp explicitly markets the line for short-term/intermittent liquidity, not long-term leverage. That reduces systemic leverage risk. Risks: easier credit access can modestly increase borrowing demand, but conservative LTV guidance (eg. <20%) and custody via Fireblocks plus licensed VASP status limit counterparty and liquidation risks. Overall, the immediate price impact on BTC and ETH is likely neutral — small supportive effects possible if many users opt for non-sale liquidity, but significant bullish or bearish pressure is unlikely absent large-scale adoption or aggressive LTV lending.