Bitcoin loan margin call: thresholds, cures and liquidation

By Crypto Loans HQ Published 19 September 2026 Last reviewed 19 September 2026

A bitcoin loan margin call is the lender's demand that you add collateral or repay part of the loan after a fall in the bitcoin price lifts your loan-to-value (LTV) ratio past a published trigger. If you miss the cure window, 24 or 48 hours where lenders publish one, or LTV reaches the liquidation level, the lender sells bitcoin, and that sale is generally a taxable disposal.

Key takeaways

The trigger is arithmetic. Starting at 50% LTV, a 28.6% fall in the bitcoin price reaches 70% and a 37.5% fall reaches 80%. Starting at 40%, the same levels are 42.9% and 50% away.
Published levels differ widely. In September 2026 lenders published margin calls or top-up demands between 65% (Xapo Bank's top-up demand) and 85% (Figure, on loans written at 75% initial LTV), and liquidation levels between 80% and 90.91%.
Cash cures with less money than collateral. To bring a loan at 70% LTV back to 60%, you repay 14.3% of the balance or add collateral worth 23.8% of it.
A partial liquidation at 80% LTV that restores 60% sells half the collateral, before fees. A full liquidation at 80% sells four-fifths of it and returns the rest.
A liquidation is generally a taxable sale. The proceeds go to the lender, but the gain is yours.

How a margin call is triggered

Your loan-to-value (LTV) ratio is the loan balance divided by the market value of the collateral. The lender recalculates it against its own price feed, not the price on your exchange: Unchained uses the CME CF Bitcoin Real Time Index, which “updates every minute”, and Arch a CoinMarketCap feed updated every 60 seconds (both accessed September 2026). Ask whether one reading past a trigger is enough, or whether the level must hold; the documents should answer.

Two things raise LTV: a lower collateral price and a higher balance. Where interest accrues rather than being paid monthly, and counts toward the balance, LTV climbs even at a flat price. Morpho's documentation lists “debt increasing due to accrued interest” as one route to liquidation.

The schedules lenders publish have up to three levels above the starting LTV: a warning, a margin call that opens a cure window, and a liquidation level at which the lender sells without waiting.

The levels lenders publish

Margin-call and liquidation levels published by lenders, September 2026
Lender	Starting LTV	Warning or margin call	Cure window	Liquidation	What is sold
Ledn	50% typical	Alerts at 70% and 75%	Not stated	Automatic at 80% or above	Enough to cover the balance, plus a 0.50% spread; remainder returned
Xapo Bank	20%, 30% or 40%	Add collateral or repay above 65%	Not stated	At 80%	Collateral to cover what you owe
Arch	Up to 60%	Margin call at 70%	24 hours, back to 60%	Partial at 80%	Enough to restore 60%; a 2% fee typically applied to the amount sold, where not prohibited by state law
Figure (50% loans)	50%	Notice at 75%; margin call at 80%	48 hours, back to the starting LTV	Automatic at 90%	2% processing fee on crypto sold, where allowed
Figure (75% loans)	Up to 75%	Notice at 80%; margin call at 85%	48 hours, back to the starting LTV	Automatic at 90%	2% processing fee on crypto sold, where allowed
Unchained	200% CTP (50%)	Violation below 150% CTP (about 66.7%)	24 hours	Foreclosure at 120% CTP (about 83.3%)	Enough to repay the loan and fees; remainder returned
SALT	30%, 50% or 70%	Warning at 75%; margin call at 83.33%	Not stated	Margin event at 90.91%	“Just enough collateral” to restore its target
Milo	Pledge twice the loan (about 50%)	Margin call at 67%	Not stated	Set in the loan documents	Not stated
Sources: each lender's published pages, accessed 19 September 2026. CTP is collateral-to-principal; the LTV equivalents are our arithmetic (LTV = 1 ÷ CTP). Ranges lenders published as of September 2026; terms depend on the lender, the collateral and the borrower, and are set only by the lender. A description of what each firm publishes, not a comparison or recommendation.

The headline numbers vary less than three things beneath them: the gap between the margin call and the liquidation level (15 points at Xapo, 10 at Arch and on Figure's 50% loans, 5 on Figure's 75% loans, under 8 at SALT), whether a cure window is published at all, and whether the lender sells a slice or the whole position. Firms are named here as examples of published terms; how we are paid explains our compensation.

How far the price has to fall

The fall from a starting LTV to a given level is one minus the starting LTV divided by that level.

Bitcoin price fall needed to reach each LTV level
Starting LTV	To 65%	To 70%	To 80%	To 90%
30%	53.8%	57.1%	62.5%	66.7%
40%	38.5%	42.9%	50.0%	55.6%
50%	23.1%	28.6%	37.5%	44.4%
60%	7.7%	14.3%	25.0%	33.3%
Price fall = 1 − (starting LTV ÷ level). Assumes a constant loan balance; interest added to the balance and fees shorten every distance. Illustrative arithmetic, not a forecast.

Worked example

A US$1,000,000 loan against 20 BTC, bought at an illustrative US$100,000. The collateral starts at US$2,000,000 (50% LTV). At US$71,000 it is worth US$1,420,000 (70.4%), and a lender with a 70% trigger issues a margin call. At US$62,500 it is worth US$1,250,000 (80%), the level at which Arch publishes a partial liquidation and Ledn an automatic one. At US$54,000 the LTV is 92.6%, past every liquidation level in the table above.

Prices are illustrative, not a forecast. Terms are set only by the lender.

Curing a margin call: cash or collateral

Lenders publish the same two cures. Xapo's wording is typical: “add more collateral or pay back some of your loan”. The cure usually has to restore a stated level, not just get back under the trigger: Arch requires 60%, the same as its maximum starting LTV, and Figure's current FAQ requires a return to the starting LTV.

The two cures do not cost the same. Take a US$1,000,000 loan whose collateral has fallen to US$1,428,571 (70% LTV), with a 60% cure level:

Repay US$142,857. The balance falls to US$857,143, which is 60% of the collateral's value.
Or add US$238,095 of bitcoin. The collateral rises to US$1,666,667, and the unchanged US$1,000,000 balance is 60% of it.

A cash cure is the cheaper of the two in dollars, and it cuts future interest as well. A collateral cure keeps the loan's size and your bitcoin position, but the added bitcoin is exposed to the same falling price.

Timing is part of the cure. A window measured in hours can fall on a weekend or holiday while bitcoin trades every day, so settle in advance how the lender accepts a cash payment and how many confirmations a bitcoin deposit needs. Some lenders offer a standing cure: Ledn's optional Auto Top-Up moves bitcoin from your Ledn account when LTV touches 70%, bringing it back to 68%.

Corporate facilities work the same way at larger scale. MARA's quarterly report for the period to 30 June 2026 says that if its posted collateral falls below the margin call limit it “must promptly post additional collateral”, and that failing to do so is an event of default letting the lender liquidate pledged bitcoin. A MicroStrategy subsidiary, MacroStrategy LLC, took a US$205.0 million term loan from Silvergate Bank in March 2022 that capped LTV at 50%; above it the borrower had to add bitcoin or prepay to 25% or less, or to 35% at the cost of a 25 basis point rate increase. Bitcoin treasury financing covers these facilities.

Partial and full liquidation

If the cure window closes, or LTV reaches the liquidation level first, the lender sells. Two approaches are published:

Partial. Arch “will sell just enough to reduce your LTV” to 60%, with a 2% fee typically applied to the amount sold “to the extent not prohibited by state law”; SALT states that it sells “just enough collateral” in a margin event.
Full, with the remainder returned. Ledn “sells collateral to cover the outstanding balance, applies a 0.50% trade spread, and returns any remainder”. Unchained, after foreclosure, liquidates enough to repay the loan and fees and returns the rest; Xapo sells collateral “to cover what you owe”.

The arithmetic of a partial sale is steeper than it looks. Restoring 60% from 80% means selling half the collateral:

What a liquidation at 80% LTV leaves you holding
US$1,000,000 loan, US$1,250,000 collateral	Partial, back to 60%	Full, loan repaid
Collateral sold	US$625,000	US$1,000,000
Share of collateral sold	50%	80%
Collateral left	US$625,000	US$250,000
Loan left	US$375,000	US$0
Your equity (collateral less loan)	US$250,000	US$250,000
Before fees and spreads, which increase the amount sold. Illustrative arithmetic, not a forecast.

Your equity is the same either way before costs; the difference is exposure. After a partial sale you still hold bitcoin and owe a loan at 60% LTV, so a further fall can bring the next call. After a full sale you are out of the position. Either way the execution price in a fast market can be below the trigger price, and the fee or spread comes out of your collateral. A sale of this size is itself an execution question, set out in bitcoin OTC.

The tax consequence of a liquidation

A liquidation is a sale of your bitcoin, and a sale is generally a taxable event. The IRS treats digital assets as property, and its FAQs state that “when you sell virtual currency, you must recognize any capital gain or loss on the sale”. The IRS has published no guidance specific to loans, collateral or liquidation, so the general sale rule is the starting point.

In the UK, HMRC's guidance on DeFi lending treats a platform that liquidates collateral the borrower still beneficially owns as the borrower's nominee, and “any gain or loss on a disposal of the tokens held as collateral” is deemed the borrower's. That guidance is written for DeFi platforms; how it applies to a centralized lender is a question for a tax adviser.

The practical problem is cash. The proceeds go to the lender, but the gain is yours, and on a long-held position with a low cost basis it can be most of the sale price. See are crypto loans taxable for the treatment in more detail.

Loans without price-triggered liquidation

Some lenders publish products under which a price fall does not trigger a margin call during the term. None of them removes liquidation altogether:

Figure's Liquidation Protection. An optional, up-front, non-refundable fee that Figure states is used to purchase a hedge. Loans with it do not face price-based margin calls or liquidation during the term, but “Liquidations will still occur if the loan becomes delinquent”. Figure lists a 50% maximum LTV for it and a limited set of states.
SALT Shield. SALT publishes an optional paid feature under which, once activated, price moves do not trigger a margin call for the rest of the term. Its page states that it is available to loans above US$50,000, to loans with LTV under 70%, and only if bought at least three months before the loan's maturity date, and in certain jurisdictions only (SALT, accessed September 2026). SALT publishes no default terms for it, so read what happens if a payment is missed.
Galaxy's collar loans. Galaxy's lending desk describes a “structured product pairing a loan with a derivative risk management solution”, with non-recourse financing and “no margin calls”, for qualifying institutions and accredited individuals.

The protection is paid for somewhere: in a fee, a lower maximum LTV, eligibility conditions or the cost of a derivative. And any loan can still end in a sale if you miss payments or cannot repay at maturity. Read “without liquidation” as “without price-triggered liquidation during the term”, and read the default clauses.

Risk

Risks to weigh before borrowing

Margin calls and forced liquidation. A fall in the bitcoin price can move a loan from a margin call to its liquidation level inside one cure window, and some lenders sell automatically at that level.
Execution and cost. A forced sale in a fast market can fill below the trigger price, and fees or spreads (2% at Arch and Figure where allowed, 0.50% at Ledn) come out of your collateral.
Counterparty and custody risk. The collateral you top up goes to the same lender or custodian. If the lender may rehypothecate it and then fails, you may be a creditor rather than an owner, as Celsius borrowers found in 2023.
Tax on a liquidation. A forced sale is generally a taxable disposal, and the tax falls on you even though the proceeds went to repay the loan.

For the collateral side of the risk, see custody and rehypothecation.

General information, not advice. This guide describes how margin calls and liquidations on bitcoin-backed loans work in general terms and what named lenders publish, as accessed in September 2026. Worked examples use illustrative prices and are not forecasts. It is not an offer to lend or to arrange a loan on particular terms, and it is not investment, legal or tax advice. Terms are set only by the lender. Take advice from a qualified tax adviser before borrowing against, or selling, a crypto asset. How we are paid.

Margin calls: questions

What happens if you miss a margin call on a bitcoin loan?

The lender sells collateral. Depending on its published terms, it sells enough to restore a target loan-to-value ratio, or enough to repay the whole loan and returns any remainder, usually after a fee or spread. The sale is generally a taxable disposal of your bitcoin, and after a partial sale a further price fall can trigger another margin call.

Can a lender liquidate a bitcoin loan without a margin call?

Yes, where its terms provide for it. Several lenders publish a liquidation level above the margin-call level at which they sell without waiting for a cure; Ledn, for example, states that liquidation at or above 80% loan-to-value is automatic. A fast price fall can pass the margin-call level and reach the liquidation level inside one cure window.

How much can bitcoin fall before a margin call?

It depends on the starting loan-to-value ratio and the lender's trigger. The fall needed is one minus the starting ratio divided by the trigger. Starting at 50%, it is about 28.6% to reach a 70% trigger and 37.5% to reach 80%; starting at 40%, about 42.9% and 50%. Interest added to the balance shortens those distances.

Is there a bitcoin loan without liquidation?

Not in the sense of a loan that can never be liquidated. Some lenders publish optional products that remove price-triggered margin calls during the term, such as Figure's Liquidation Protection and SALT Shield, but Figure states that liquidations still occur if the loan becomes delinquent, and any loan can end in a sale of collateral if it is not repaid.

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