According to crypto sources, Bitcoin-backed loans have arrived on Strike. The Bitcoin-focused payment platform, led by Jack Mallers, announced today that eligible customers in 26 US states can now borrow large sums using their Bitcoin as collateral without having to sell their assets.
The new service already lets users buy, sell and transact with Bitcoin. According to the company’s announcement, users can apply for 12-month loans starting at $75,000, up to $2 million depending on state regulations and borrower assessment. Strike is one of the few fintechs offering high-value crypto-backed credit to mainstream users.
“Bitcoin is the best performing asset in human history. You shouldn’t have to sell it just to get liquidity,” said Jack Mallers in a video on X. “Now you don’t have to.”
A New Kind of Crypto Lending
Strike’s Bitcoin-backed loans puts it in competition with companies like Ledn, Unchained and Anchorage Digital which also offer crypto-collateralized lending products. But Strike’s focus on high-value borrowers and regulatory compliance may set it apart from less structured DeFi lending protocols.
According to Strike’s terms, borrowers can get loans at 12% APR or more, backed entirely by Bitcoin. The collateral is held in custody and if the price of Bitcoin drops below a certain threshold, the borrower may need to add more BTC or risk liquidation. No credit checks are required as the loan is secured by the crypto itself.
Some may view 12% APR as high compared to traditional lending products but Strike argues it provides tax benefits and strategic flexibility. Since users aren’t selling their BTC, they avoid capital gains taxes, a growing concern as the asset appreciates.
Strategic Expansion and Institutional Support
Mallers confirmed the company will bring the product to Europe and Latin America next, after licensing and regulatory approvals.
This follows Mallers forming a new Bitcoin treasury company, Twenty One, through a SPAC merger with Tether, Bitfinex, Cantor Fitzgerald and SoftBank. Twenty One will focus on building and managing corporate Bitcoin reserves.
Sources say Strike was instrumental in helping El Salvador roll out its Bitcoin payment infrastructure during the 2021 Bitcoin Law. El Salvador has since backtracked on the legal tender aspect under IMF pressure but the government is still buying Bitcoin and Strike is still in the region.
Regulatory Landscape and Market Timing
Launching Bitcoin-backed loans in the US comes with its own set of regulatory hurdles. But Strike is taking a cautious approach, only enabling the service in states where lending is allowed. They haven’t disclosed which states are eligible beyond saying there are 26.
According to a March 2025 report by Galaxy Digital, institutional lending in crypto grew 30% year over year, with most of the demand coming from corporate treasuries and high net worth individuals looking for alternative financing options.
By anchoring their product on Bitcoin, Strike is tapping into a market that has long sought non-dilutive access to capital. The service may also serve crypto miners, long term holders and companies that prefer to collateralize rather than sell.
Future Outlook
Strike’s entry into Bitcoin-backed lending is a trend in the convergence of crypto and traditional finance. With lending products now added to their suite of Bitcoin services, the company is evolving from a retail payment provider to a full fledged crypto fintech platform.
The success of this service will depend on Bitcoin’s price, user appetite for non-dilutive loans and the company’s ability to expand internationally without regulatory hurdles. For now though, Strike has made clear they believe in Bitcoin.
FAQs
What are Bitcoin-backed loans?
Bitcoin-backed loans ‘are credit products that allow users to borrow fiat or stablecoins using their Bitcoin as collateral without having to sell the asset.
What is the minimum loan amount Strike offers?
Strike offers Bitcoin backed loans starting from $75,000 to eligible US customers. ‘The minimum may vary slightly by state.
What is the interest rate for Strike’s Bitcoin-backed loans?
Strike’s loans start at 12% APR, depending on loan size and collateral terms.
Can I use these loans if I’m outside the US?
No, currently the service is only available in 26 US states. Strike plans to expand to Europe and Latin America.
Will I lose my Bitcoin with these loans?
If the price of Bitcoin drops significantly and you don’t add more collateral, the BTC may be liquidated to cover the loan.
Glossary
Bitcoin-backed loan: A loan where Bitcoin is used as collateral. If the value of Bitcoin goes down, more collateral may be required.
Collateral: An asset used as security for a loan, to be seized if you default.
APR (Annual Percentage Rate): The interest rate on borrowed money, expressed as a percentage.
SPAC (Special Purpose Acquisition Company): A company created to ‘merge with or acquire another company, often used to take companies public.
Liquidity: How easily an asset can be sold without affecting the market price.
References
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