A first-person walkthrough of how to borrow against my Bitcoin: mental checkpoints, LTV choices, deposit steps, monitoring, and repayment habits.
Arkadii Kaminskyi
Arkadii Kaminskyi
Head of Operations at Sats Terminal
Head of Operations at Sats Terminal with 5 years of experience in crypto. Specializes in DeFi, yield farming, and borrowing — has reviewed 50+ crypto products.
The first time I seriously considered how to borrow against my Bitcoin, I had a very specific tension in mind. I wanted cash. I did not want to sell. And I didn't trust myself to make that decision in a rushed afternoon, so I slowed down and built a mental process I could repeat. This post is the walkthrough of that process. Not a generic tutorial: the actual sequence of questions I would ask myself, the mental checkpoints I use, what I look for on-screen at each step, and the moments where I'd deliberately pull back before signing a transaction. If you're coming to this fresh, pair it with the beginners' guide to borrowing against Bitcoin so the terminology lands before the decisions do.
Whenever I'm about to borrow against my Bitcoin, I run through the same interrogation. It's not a checklist I invented to sound thorough — it's the set of questions whose answers have, in the past, either stopped me from making a poor decision or given me confidence to proceed. None of them are about the lender. They're all about me.
The first question is always: what specifically am I going to do with the stablecoins? If the answer is vague ("build up some liquidity" or "have dry powder"), that's usually a signal I'm not ready. Borrowing against a volatile asset to hold idle cash means paying interest for no productive reason. The good answers tend to be specific: pay a defined bill on a defined date, deploy into a defined position, cover a defined gap in income. When I can name a concrete use, I can also measure whether the borrowing cost is worth it.
The second question is blunt: if BTC fell 40% tomorrow, would my position survive? This isn't a prediction — it's a stress test. I walk the math in my head. Current BTC price, current collateral amount, current loan amount, resulting LTV. Then I imagine a 40% drop and run the numbers again. If that hypothetical LTV would pierce the liquidation threshold of whichever lender I'm considering, I know I'm overextended before I even begin. I'd rather feel uncomfortable doing that math now than watch my collateral get liquidated later. For a deeper look at this habit, the guide on optimizing your LTV ratio is where I send friends who ask me this exact question.
The third question is about time horizon: how long do I plan to carry this loan? A three-week bridge is a different product than a twelve-month runway extension, even at the same interest rate. Longer horizons punish me for variable rate spikes and compound interest. Shorter horizons make fees and gas disproportionately expensive. I match my expected duration to the rate type (variable vs fixed) and the protocol I'm likely to pick.
The fourth question is about control: who is holding my Bitcoin while the loan is open? I want to know whether my collateral is sitting in a smart contract I can inspect, or on a company's balance sheet I have to trust. Neither is automatically better, but the answer changes my risk calculus entirely. I think of it as the difference between code risk and counterparty risk — and I want to choose, not stumble into it.
The fifth and final pre-loan question I always ask: what's my repayment plan, in writing? Not a vibe. A plan. If the answer is "I'll repay when I have it," that's not a plan — that's a wish.
That last item sounds soft, but it's the one I respect the most. Bitcoin-backed loans are reversible in theory (you can always repay and close), but they are emotionally sticky once opened. Sleeping on it filters out most impulse borrowing.
Once I've answered my own questions, the second stage of thinking is about who I want to borrow from. This is where the aggregator view is invaluable, because I can see the trade-offs side by side instead of trusting a single provider's marketing copy. When I open Borrow by Sats Terminal, the panel lays out offers from Aave v3, Morpho Blue, and several CeFi lenders, each with a current rate, a max LTV, an estimated liquidation price, and a custody label.
I don't just pick the lowest rate. A lower headline APR on a custodial lender might carry counterparty risk I'm not willing to absorb. A higher rate on Aave v3 might be worth it because the terms are enforced on-chain and the liquidation mechanics are transparent. Before I even look at numbers, I decide which bucket I'm shopping in: DeFi-only, CeFi-only, or open to either. If you're torn on that choice, the walkthrough on comparing DeFi vs CeFi lending is a good reset.
Once I've narrowed the bucket, I compare the specifics. I think of it as a four-column scan:
| Dimension | What I look for | Why it matters | Red flag |
|---|---|---|---|
| Rate structure | Variable vs fixed, current APR, historical volatility | Determines carrying cost over the life of the loan | Only a single teaser rate is shown without range |
| Max LTV | Typically 70–80% on wBTC markets like Aave v3 | Sets my ceiling for how much I can draw at a given collateral | Promoted max LTV leaves almost no buffer below liquidation |
| Liquidation threshold | Typically 75–85% on DeFi wBTC markets | The actual line where my collateral could be sold | Threshold is barely above max LTV |
| Custody model | Non-custodial smart contract vs custodial balance sheet | Determines whether I face code risk or counterparty risk | Custody type is vague or unavailable in the offer UI |
The reason I use a table even in my own head is simple: side-by-side forces honesty. A rate that looked great in isolation can look worse when I put it next to a non-custodial alternative with a similar APR and a wider buffer between LTV and liquidation. If you want a longer treatment of how to parse these rows, the piece on how to read a crypto loan offer is worth bookmarking.
The setup itself is the least dramatic part of the whole process, which is exactly how I like it. On Borrow, I enter my email, confirm a code, and a self-custodial Privy wallet is created automatically in the background. No seed phrase ceremony, no KYC, no uploading a passport. That last part matters: I'm not handing over identity documents before I even know what rate I'll be offered. If you want the FAQ-level walkthrough, how to create an account on Borrow covers it cleanly.
The mental checkpoint here is small but real: I always confirm what "self-custodial" actually means for me in this context. Borrow doesn't hold my keys. The Privy wallet is mine, the signature is mine, and every state-changing action — supplying collateral, borrowing, repaying — requires me to approve it. If you've never used this kind of embedded wallet before, I'd read what a Privy wallet is so you know what's generated on your behalf. The underlying idea is the same as what I expect from any wallet: I'm the one who moves funds, not the interface. For the conceptual foundation, the self-custody glossary entry is short and worth reading.
I also ask myself whether I want to use the generated Privy wallet or bring my own. Borrow supports a range of external wallets, and for users who already have a hardware wallet habit, routing through something like that is often the right call. What wallets Borrow supports is the canonical list. My personal default is: if the loan is small and short-term, I use the embedded Privy wallet. If the loan is large or long-lived, I connect a hardware wallet and keep the ceremony.
Before I move on, I do one last sanity check: the wallet address is displayed somewhere visible, and I double-check that it matches what I've copied if I'm going to send funds in. An address mismatch at this stage is rare but catastrophic — and developing the habit of verifying now saves me from a much worse mistake at step three.
Now the decisions actually start to matter. When I'm configuring a loan, I'm making four choices at once: how much to collateralize, how much to borrow (or, equivalently, what LTV), which stablecoin, and on which chain. On Borrow, the interface lets me set the inputs and then surveys the supported lenders to surface the best current terms. If you want a higher-level explainer of what's happening under the hood, how Borrow works is a good ten-minute read.
I usually start by entering the BTC amount rather than the stablecoin amount. That's because I want LTV to be an output of my thinking, not an accident of whatever round number I typed into the borrow field. With a given collateral, I can move a slider up and down and watch the estimated liquidation price move with me. The UI makes that cause-and-effect concrete: drag LTV up, liquidation price rises toward spot, and my safety margin shrinks in real time.
The mental checkpoint at this stage is specific: I pick my LTV by working backwards from my drawdown tolerance, not forwards from what I want to spend. If I'm comfortable assuming BTC could fall 30% before I'd want to act, I pick an LTV that keeps me below the liquidation threshold even in that scenario. That usually lands me well below the advertised max. Max LTV is a ceiling, not a target. The optimizing LTV ratio guide has the frameworks I borrow from when I'm feeling greedy.
Then I pick my stablecoin. USDC is my default on most chains because of its liquidity and its role in broader DeFi integrations. USDT is an option on some networks and lenders. Whichever I choose, I look once at where the stablecoin will actually land — which chain, which wallet — and make sure that aligns with how I plan to deploy it. Borrowing USDC on Arbitrum and then needing to bridge it to Ethereum before using it adds friction and fees I'd rather avoid.
Chain selection is usually dictated by two things: which lender offers the best terms and where I want the stablecoins to end up. BASE, Ethereum, Arbitrum, Polygon, Optimism, and BSC are all on the supported list. If a Morpho Blue market on BASE shows the best combination of rate and liquidation buffer for my configuration, that's where I go. I don't chain-shop for its own sake.
Before I confirm, I do one final read-through. I look at the rate (and whether it's variable or fixed), the fees, the estimated liquidation price, the custody type, and the chain. If any of those surprise me — even mildly — I stop and re-examine. A surprise at configuration stage is always cheaper than a surprise on the dashboard after the position is live.
The deposit step is where the abstract becomes concrete. Borrow generates a unique deposit address for my loan and asks me to send BTC to it from wherever I currently hold my Bitcoin — cold storage, a hot wallet, an exchange withdrawal. The interface shows confirmations in real time, and once the required confirmations are reached, the system moves into the collateral preparation phase.
What I watch for here is three things, in order. First, the address itself. I don't just copy and paste. I read the first four and last four characters out loud to myself, I compare them on screen, and if I'm sending from a hardware wallet, I verify the same characters on the device display. Address-swap malware is rare but real, and the act of reading the characters aloud forces me to slow down at the moment when I'm most tempted to speed up.
Second, I watch the amount. The stablecoin I receive is a function of how much BTC confirms on-chain, not how much I typed into the configuration screen. If I intended to deposit 0.5 BTC and only 0.49 arrives (network fee, rounding, whatever), the loan will reflect 0.49. Usually not a big deal, but I want to see it rather than be surprised by it.
Third, I watch confirmations. Bitcoin is the one blockchain where I'm patient on purpose. Six confirmations is roughly an hour, and I don't try to rush it. The UI tracks them for me, which means I can close the tab, grab coffee, and come back. If I'm borrowing against a meaningful amount of BTC, sitting with the confirmation count is the exact right pace for the decision to sink in. If you want the mechanics of what Borrow does during this window, the how-Borrow-works FAQ covers the handoff into collateral preparation.
During collateral preparation, Borrow bridges and wraps my BTC to whatever form the selected lender's market expects — wBTC on Ethereum, cbBTC on BASE, BTCB on BSC, and so on — and supplies it into the protocol. Each of those steps requires my signature, and each one is presented to me with the details in plain view. I read each one. It's tedious, and that's the point. A tedious review at deposit time has saved me from exactly the kind of mindless approval that users regret later.
Once the collateral is supplied and the borrow is executed, the stablecoins show up in my self-custodial wallet. That moment is always a little anticlimactic, which is exactly as it should be. The dashboard now shows a live position: collateral value, outstanding principal, current LTV, accrued interest, and estimated liquidation price. From here forward, the loan is a thing I manage, not a thing I set up.
Before I do anything with the stablecoins, I confirm three things on the dashboard. The collateral amount matches what I deposited. The borrow amount matches what I requested. The liquidation price is where the configuration said it would be. If all three are where I expect them, I proceed. If anything looks different, I stop and investigate before I deploy the stablecoins anywhere — because once I send them somewhere, unwinding a mistake gets a lot more expensive.
Where the stablecoins go next is entirely a function of the purpose I defined in my pre-loan checklist. If the purpose was to cover a bill, they go to an off-ramp or a payment destination. If the purpose was to deploy into a position, they go to that position and nowhere else. If the purpose was to bridge an income gap, they sit in the stablecoin wallet and I spend them down intentionally. The discipline I try to hold is this: the stablecoins are not idle capital. They're borrowed capital, accruing interest, backed by collateral that is moving in price. Treating them with any less care than I treat the original BTC is how I would end up in trouble.
I also make a quiet mental note of where I am on the rate curve. If it's a variable rate on Aave v3, I know the APR can move with pool utilization. If it's a fixed rate from a Morpho market or a CeFi offer, I have more predictability but probably paid a small premium for it. Either way, I know which one I signed up for, and I'll be checking the dashboard with that lens.
The monitoring phase is where most borrowers either stay calm or stumble. My rule is simple: I check the dashboard daily, and I act on a defined trigger, not a feeling. The Borrow dashboard shows me the numbers I care about — current LTV, collateral value, outstanding principal plus accrued interest, and the implied liquidation price — all in one place. If you want the granular walkthrough, how to monitor loan health on Borrow covers it screen by screen.
The daily check takes less than a minute. I look at current LTV versus the liquidation threshold, and I note how much headroom I have. I glance at the BTC price relative to my mental "bad day" number — the price at which I want to be actively managing rather than passively watching. And I confirm that accrued interest is moving at roughly the rate I expect. If any of those three are off, I pay closer attention. If they're all fine, I close the tab.
My defined triggers for action are written down somewhere I can reach. There's a "top up collateral" trigger at one LTV level, and a "repay partially" trigger at a more uncomfortable level. Having these written ahead of time means I'm not making decisions in the middle of a drawdown, which is exactly the worst time to make them. The broader framework I use is laid out in monitoring your crypto loan health, and the habit of pre-committing to triggers is one of the highest-value things I've picked up from it.
One non-obvious part of monitoring is watching the rate itself. If I took a variable-rate loan and pool utilization on Aave v3 climbs meaningfully, my APR moves with it. I don't need to act on every basis point, but I do want to notice when the carrying cost of my loan has drifted far enough from my original assumption that my repayment plan deserves a second look. A loan that was cheap at 4% might justify different behavior at 9%.
Repayment is the step people underestimate. It's not automatic. I decide when and how to repay, and I can do it in one shot or in pieces. On Borrow, I go to the position, enter the amount I want to repay in the borrowed stablecoin, and approve the transaction. The outstanding balance drops, the LTV drops with it, and the position moves back toward close. When the full balance is repaid, I can withdraw my collateral — which, depending on the setup, may involve unwinding the wrapping or bridging step and returning native BTC to my Bitcoin address. How to repay a loan on Borrow walks through the exact screens.
The mental checkpoint I use here is: I'd rather repay early and partially than late and fully. Paying down a portion of the principal when I happen to have liquidity pulls my LTV away from the liquidation threshold immediately, reduces the interest I'll accrue going forward, and gives me optionality. Waiting to close the whole thing in one perfect move is satisfying in theory and rarely how it plays out in practice.
When I'm ready to fully close, I make sure I repay the entire outstanding balance — principal plus any final accrued interest — and then initiate the collateral withdrawal. The UI shows me where my BTC will be returned (chain, address, format), and I verify it the same way I verified the deposit address. Same habit, same caution, same payoff. When the withdrawal settles, my Bitcoin is back where I want it, the loan is closed, and the dashboard reflects a zero-balance position.
Closing a loan is also when I debrief. I ask myself what surprised me. Did a rate move I didn't expect? Did a fee eat more than I'd estimated? Did a bridging step take longer than I'd hoped? I write down the answers, because the next time I borrow against my Bitcoin, those notes are more valuable than any re-read of a tutorial.
Borrow by Sats Terminal is the layer that makes this process coherent rather than fragmented. It isn't a lender — it's an aggregator. That distinction matters because the value isn't in issuing a loan but in surfacing, in one view, the offers from providers like Aave v3, Morpho Blue, and supported CeFi lenders across BASE, Ethereum, Arbitrum, Polygon, Optimism, and BSC. I get to compare rates, max LTVs, liquidation thresholds, and custody models before I commit, and I get automatic bridging and wrapping so I don't have to orchestrate that myself.
The self-custodial posture is what keeps the experience honest. Borrow never takes custody of my BTC or my stablecoins. Every state-changing action requires my signature. The Privy wallet that's created at signup is mine, not the platform's. That architecture is why I'm willing to do this at scale: the trust surface is limited to the lenders I choose, the smart contracts they run on, and my own discipline.
The ongoing dashboard is the other piece that does real work. It gives me current LTV, collateral value, outstanding balance, accrued interest, and liquidation price in one place — which is exactly the data I need to execute my monitoring habit. I'm not stitching together block explorer tabs and spreadsheet cells to figure out my own position. For a broader tour of how the product sits in the Bitcoin-borrowing landscape, the 2025 complete guide to Bitcoin borrowing is where I'd start.
Common Questions
The answer depends on the lender's max LTV, not on a single universal number. On Aave v3, typical max LTVs for wBTC are in the 70–80% range, meaning if you deposit Bitcoin worth $100,000, you could in principle borrow up to $70,000–$80,000 in stablecoins. Borrow by Sats Terminal surfaces these figures per lender so you can compare. My personal approach is to borrow well below the advertised max to preserve a buffer against price drawdowns. Anything close to the ceiling leaves almost no room for BTC volatility, and volatility is the one variable I cannot control.
