Crypto-Backed Loans, Explained: How to Unlock Cash Without Selling Your Bitcoin

In brief

• Crypto-backed loans give holders cash against their coins without selling, generally avoiding a capital-gains event.
• Figure advises borrowers to compare four things when shopping: max loan-to-value, fixed vs. variable rate, licensing, and liquidation terms.
• Licensing and liquidation protection matter more than the headline rate, says the crypto lender, and the product suits only holders comfortable with margin-call risk.

If you believe in your crypto, selling it to cover a short-term cash need is the one move you'd rather not make. Sell, and you trigger a taxable event and give up any future upside. A crypto-backed loan offers another path: borrow cash against your holdings while keeping every coin.

Here's the mechanics. You pledge Bitcoin, Ethereum, or Solana as collateral, and a lender advances you cash—with Figure it’s up to 75% of your collateral's value*. You keep ownership of the crypto the entire time. No sale, and because borrowing isn't a sale, generally no capital-gains event (this isn't tax advice—check with a professional on your situation).

The category has matured fast, and not every lender is built the same. Four things separate a serious platform from a risky one — and they're exactly what you should compare when shopping for the best crypto-backed loan: