Putting bitcoin to work - Episode 02: Borrow Without Selling
What if you could unlock the value of your bitcoin without ever selling it? That’s exactly what bitcoin-backed loans make possible.
Instead of selling your bitcoin to cover expenses, fund a project, or capture an opportunity, you can borrow stablecoins against it. All while hodling your long-term position.
TL;DR
Borrowing against bitcoin lets you access liquidity without selling your holdings.
You lock up your bitcoin as collateral, borrow stablecoins, then repay to reclaim it.
It’s a smart, flexible way to stay long bitcoin while using your capital.
How it works
A bitcoin loan is simpler than it sounds.
Here’s the process in four clear steps:
1. Lock your bitcoin as collateral
You deposit your bitcoin into a secure wallet or smart contract. Depending on the platform, this might be handled by a company (CeFi) or directly on-chain (DeFi).
2. Borrow stablecoins
You receive stablecoins like USDC, USDT, or DAI, usually worth 30–60% of your bitcoin’s value. This is called your Loan-to-Value ratio (LTV).
3. Use your liquidity
Pay bills, reinvest, or fund something meaningful. Your bitcoin stays locked, but your stablecoins are yours to use freely.
4. Repay and reclaim
When you repay the loan (plus interest), your bitcoin is released back to you. Ready for the next bull run.
It’s like temporarily parking your bitcoin for a short-term job, then getting it back when the work’s done.
Why borrow instead of sell?
For most hodlers, the goal isn’t to trade their bitcoin, it’s to hold it.
Borrowing keeps that goal intact while still letting you use your capital in the real world.
Here’s why many prefer borrowing over selling:
Stay exposed to the upside: Your bitcoin can keep growing in value while you use your liquidity.
Avoid taxable sales: In many places, borrowing isn’t treated as a sale event (NFA - please confirm based on your jurisdiction).
Maintain flexibility: You can cover costs, fund opportunities, or manage cash flow. All without losing your position.
CeFi and DeFi loans
There are two main ways to borrow against bitcoin—centralized finance (CeFi) and decentralized finance (DeFi).
Here’s the difference at a glance:
CeFi | DeFi |
Managed by a company | Managed by code, on-chain smart contracts |
You trust a custodian | You trust code and transparency |
Feels familiar, with support and apps | Fully on-chain and verifiable |
Often fixed-rate | Usually variable-rate, based on liquidity |
Both achieve the same thing: letting you borrow without selling. But they differ in control, transparency, and flexibility.
How Borrow by Sats Terminal fits in
At Sats Terminal, we built Borrow to make this process as simple and transparent as possible.
It’s a non-custodial bitcoin loan marketplace that aggregates top lenders (both CeFi and DeFi), so you can compare real offers side by side.
You’ll see loan terms, LTVs, and risk factors before you commit.
No guesswork.
No hidden levers.
Think of it like comparing flights—except instead of airlines, you’re comparing bitcoin loan platforms.
FAQs
Do I have to move my bitcoin to borrow against it?
Yes. Your bitcoin is temporarily held as collateral. How it’s held depends on the platform (custody wallet vs. smart contract).
What happens if bitcoin’s price drops?
If your LTV rises too high, your position can be liquidated. Borrowing conservatively (20–40% LTV) can give breathing room.
Can I repay early?
Usually, yes. Most DeFi loans allow early repayment anytime, and some CeFi lenders do too. Make sure to check each platform’s terms.
Ready to borrow smarter?
You don’t have to sell your bitcoin to use it.
With Borrow by Sats Terminal, you can unlock liquidity, compare options, and stay fully transparent about the risks.
Compare live bitcoin loan offers today at: borrow.satsterminal.com