Putting Bitcoin to Work - Episode 6: Fixed vs Variable Bitcoin Loans
Choosing the right loan type to match your goals, timeline, and risk comfort.
When you borrow against your bitcoin, you’re unlocking liquidity without selling. But before you choose a loan, there’s one big decision: fixed-rate or variable-rate.
The good news? Both work. They just work differently.
Below is a simple breakdown so you can pick the one that actually fits your situation.
TL;DR
Fixed‑rate: steady payments, predictable cost.
Variable‑rate: flexible, often cheaper at the start, adjusts with market conditions.
How to choose: depends on your time horizon, risk tolerance, and how actively you want to manage your loan.
Fixed-rate loans: steady and predictable
A fixed-rate loan keeps the same interest rate from start to finish. Many CeFi providers offer fixed terms because they’re easy to understand.
Why people choose fixed:
Your cost stays the same for the entire loan.
No surprises if market rates rise.
Good for longer-term plans (taxes, business expenses, personal budgets).
What to keep in mind:
Generally starts slightly higher than variable. You pay for the certainty.
Term-based. You may need to commit to 3–12 months.
Usually custodial, so check who holds your bitcoin.
Variable-rate loans: flexible and market-driven
Variable-rate loans change with supply and demand. When liquidity is strong, rates often start lower than fixed.
Why people choose variable:
Often cheaper in the beginning.
Flexible to repay early. No penalties.
Fully transparent on-chain if using DeFi.
What to keep in mind:
Rates can rise quickly when markets tighten.
Works best if you monitor your loan occasionally.
Quick comparison
Fixed-rate: great if you want clarity and don’t want to check rates.
Variable-rate: great if you want flexibility and are okay with rate changes.
How to choose in practice
Ask yourself:
How long do I need the cash? Months = fixed. Weeks = variable.
Do I want predictable payments or flexibility? Pick based on comfort.
Would a rate spike stress me out? If yes, fixed may fit better.
Will I monitor health and rates? If not, variable may be risky.
There’s no right answer for everyone. Only a right answer for your situation.
FAQs
Is one safer than the other?
Not necessarily. Liquidation risk exists in both. The key is borrowing at a conservative LTV.
Can a variable loan become more expensive than fixed?
Yes. If market rates rise, your total cost can increase.
Why do fixed loans start higher?
Certainty has a premium. Lenders price in future rate changes.
Borrow smarter, not harder
Whether you prefer fixed or variable rates, the real edge comes from clarity: knowing your terms, understanding custody, and managing your loan with intention. A well‑structured bitcoin loan lets you unlock liquidity without losing your long‑term position.
At Sats Terminal, we surface custody details, rehypothecation status, and risk signals so nothing is hidden. When you can see who holds your BTC and how your loan works, every decision becomes smarter.
Ready to compare real offers—custodial and non‑custodial, fixed and variable?
Visit Borrow by Sats Terminal to explore transparent loan terms and choose the path that fits your strategy.