Guides to crypto-backed loans and bitcoin OTC trading

These guides answer the questions a lender’s product page will not: how a margin call is triggered and cured, what a lender may do with your collateral, when a crypto loan becomes a taxable event, how an OTC desk prices size, and what the words in the agreement mean. Seven guides and a glossary.

Key takeaways

• Margin calls sit between 65% and 85% LTV at the lenders that publish a level. The range runs from Xapo Bank's top-up demand to Figure's level on loans written at 75% initial LTV, and cure windows run to 24 or 48 hours where one is published at all.
• Rehypothecation is a contract term, not a market convention. The Celsius bankruptcy record shows what turns on it, and lenders publish four different custody models.
• A liquidation is a sale. In many jurisdictions the loan itself is not a disposal, but a forced sale of collateral generally is a taxable event.
• A bitcoin OTC desk quotes one price for the whole size. That is what separates it from an exchange order book, and it is why market impact is the thing being paid for.

Where to start

Three pages carry the market itself: what lenders offer against crypto, what they offer against bitcoin specifically, and how a desk handles size. The guides below go deeper on one question each.

How crypto-backed loans work

How do crypto loans work. A collateralized crypto loan followed from the lender’s first checks to the day the collateral comes back, with the loan-to-value arithmetic that governs everything in between.

Borrow against bitcoin instead of selling. A side-by-side comparison for a holder who needs cash from a bitcoin position: what each route raises, what it costs, what can go wrong, and when selling is the better answer.

Risk and custody

Bitcoin loan margin calls. What pushes a loan past its trigger, what a cure costs in cash or collateral, and what a partial or full liquidation leaves you holding, worked through with the levels lenders publish.

Bitcoin loan rehypothecation. Whether a lender may re-use your collateral, what the Celsius court record decided about borrowers who objected, the five custody models, and the questions to put to any lender before signing.

Tax

Are crypto loans taxable. What the IRS, HM Revenue and Customs, the Australian Taxation Office and the Canada Revenue Agency have published on loan proceeds, collateral, liquidation and interest, and what none of them has said. General information, not tax advice.

Bitcoin OTC

What is OTC bitcoin trading. How a desk quotes a single price for a whole ticket, how principal and agency models differ, how settlement works, and why a legacy peer-to-peer board is not a desk.

Mortgages

Bitcoin mortgage. How pledged-crypto and crypto-as-reserves structures are built in the United States, and where the 2025 FHFA order stands against the guidance the agencies actually publish. Editorial only: we do not take mortgage enquiries.

Reference

Glossary. Thirty-four terms as lenders, desks, regulators and courts use them, from loan-to-value and cure window to rehypothecation, RFQ, the Travel Rule and Form 1099-DA.

Reading order by situation

Most readers arrive with one of five questions. This is the order that answers each of them fastest.

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