Bitcoin backed loans from Strike now include a new product that removes margin calls and price-based liquidations during market crashes. The company calls the product “volatility-proof.” It i
Bitcoin backed loans from Strike now include a new product that removes margin calls and price-based liquidations during market crashes. The company calls the product “volatility-proof.” It is aimed at borrowers who want cash without selling their Bitcoin.
The product gives users access to Bitcoin backed loans under stricter repayment terms. Borrowers get protection from market-driven liquidation. However, they must pay on time. They must also accept a higher interest rate.
Strike CEO Jack Mallers announced the product on Tuesday. He said it came after customer feedback on Strike’s first Bitcoin loan product. That product launched in May 2025.
Mallers said many users faced liquidations during a sharp Bitcoin decline. Bitcoin fell 54% from peak to trough during that period. The new product is designed to reduce that risk.
According to Mallers, the loan has no margin calls. It also has no price liquidations. He said a borrower’s Bitcoin does not move, no matter how far Bitcoin falls.
Source: XBitcoin backed loans allow customers to borrow cash by using Bitcoin as collateral. This lets holders avoid selling BTC when they need liquidity.
The wider Bitcoin industry has spent years building financial products around BTC. The goal is to expand Bitcoin beyond savings and long-term holding.
Still, adoption remains limited. A June report from Ledn said 88% of surveyed crypto investors would consider a crypto-backed loan. Only 14% said they use one.
Ledn said confidence and volatility remain major barriers. It described the gap as a 6-to-1 crypto collateral gap.
The main feature is protection from Bitcoin price swings. Traditional crypto loans can trigger margin calls when collateral value falls. That can force users to add collateral or face liquidation.
Strike’s new structure removes that price trigger. Bitcoin backed loans under this model are not liquidated only because Bitcoin drops.
Mallers said the trade-off is clear. Borrowers must accept a shorter loan term and a higher fee. They must also keep up with payments.
The maximum initial loan-to-value ratio is 45%. A customer who pledges $100,000 in Bitcoin can borrow up to $45,000.
Strike’s standard Bitcoin loans carry annual percentage rates between 7.75% and 11.25%. The volatility-proof product adds 2.95 percentage points.
That means the new loan may carry an APR between 10.7% and 14.2%. Mallers said the extra cost helps fund market hedges. Those hedges are designed to protect both Strike and borrowers.
The product is volatility-proof. It is not liquidation-proof. Mallers made that point clear. If a borrower misses a payment, Strike gives them 10 days. During that period, the borrower can pay or contact Strike to explain the situation.
If there is no response, Strike may sell some of the Bitcoin collateral. The sale would cover the overdue amount. Mallers said this protects the company from borrowers who stop responding.
Bitcoin volatility has long affected crypto lending. Mallers noted that Bitcoin has dropped 30% or more in 10 of the past 12 years.
He also said Bitcoin has seen drawdowns of 50% or more four times since 2014. These declines can create forced selling during stressed markets.
Over the past year, Bitcoin fell 54% from its all-time high of $126,080 in October to $58,190 on June 25. That decline increased attention on safer loan structures.
Bitcoin investor Fred Krueger said the product could address a major structural issue. He said it may reduce forced selling during market crashes.
Krueger said defaults would depend more on a borrower’s ability to service debt. They would not be driven only by short-term price swings.
Source: XRob Topping, executive chairman of Vibes Capital Management, also commented on the product. He said it could help users who need near-term liquidity. He also noted that a 14% APR is expensive.
Strike said the loans are available in most US states. Customers can apply in personal or business names.
The loans can be used for new borrowing, refinancing, or consolidation. Personal loans start at $10,000. Businesses in some states may access loans from $5,000.
Other companies also offer Bitcoin backed loans. These include Binance, Coinbase, Nexo, and Xapo Bank.
Strike’s new product gives Bitcoin holders a way to borrow without facing price-based liquidation. That may appeal to users who want liquidity but do not want to sell BTC during a downturn.
The six-month term also adds pressure. Bitcoin backed loans may reduce forced selling, but they still require steady repayment.
Margin Call: A demand for more collateral when the pledged asset loses value.
Forced Liquidation: The sale of collateral when a borrower fails to meet loan terms.
Loan-to-Value Ratio: The loan amount compared with the value of the collateral.
APR: The yearly cost of borrowing, including interest and fees.
Collateral: An asset pledged by a borrower to secure a loan.
Volatility-Proof Loan: A loan designed to avoid liquidation caused only by price drops.
Market Hedge: A strategy used to reduce risk from market price swings.
Bitcoin backed loans allow borrowers to use Bitcoin as collateral. They can access cash without selling their BTC.
Strike says the product removes margin calls and price-based liquidations. Bitcoin price drops alone will not trigger liquidation.
Yes. Strike may sell part of the collateral if a borrower misses payments and does not respond within the 10-day grace period.
The product carries a higher APR because Strike says the extra charge helps fund market hedges.
ReferencesRead More:Strike Launches Bitcoin-Backed Loans With No Margin Calls for Users">Strike Launches Bitcoin-Backed Loans With No Margin Calls for Users
