Bitcoin-Backed Loans Expand Beyond Crypto Trading

Bitcoin-backed loans are increasingly funding real-world expenses rather than crypto trades, according to lenders. SALT Lending says borrowers use them for tuition, business working capital, home purchases and debt consolidation. The company reports originating more than $2 billion in Bitcoin-backed loans since 2016, with fixed one-, three- or five-year terms and APRs of 7.49% to 10.50%, depending on loan-to-value. SALT says it does not require credit checks or income verification and usually funds approved loans within 24 to 48 business hours. Its figures and claims, including that all pledged collateral has been returned, are company-reported and not independently verified. SALT operates in 47 US states and Washington, D.C., and says it is seeking licensing expansion in California and Nevada. The trend spans other lenders and products. Ledn says it has funded more than $11 billion in loans since launching in 2018 and serves institutional, wealthy and retail borrowers. Lenders are also working to make crypto-backed credit more predictable: Coinbase added fixed-rate USDC borrowing against Bitcoin through Morpho, complementing variable-rate loans. Morpho had more than $1.4 billion in outstanding loans backed by about $3 billion in collateral. Ledn has also pointed to lending against other hard assets, such as gold, as a possible next step. Bitcoin-backed loans let holders access cash without selling BTC, but carry interest costs and liquidation risk if Bitcoin prices fall. Broader use as collateral may support Bitcoin’s utility, though it does not by itself establish a near-term price direction.