Bitcoin holders are increasingly using crypto-backed loans to buy real estate without selling their Bitcoin, avoiding capital gains taxes in the process.
Mauricio Di Bartolomeo, co-founder of Ledn, explained to Cointelegraph that early crypto adopters and high-net-worth individuals are leveraging Bitcoin-backed loans to access property financing despite not meeting traditional lending criteria.
These loans allow borrowers to use Bitcoin as collateral without triggering taxable events since borrowing against assets typically does not count as a sale.
Clients lock Bitcoin at about a 50% loan-to-value (LTV) ratio and receive fiat currency or stablecoins, often within an average funding time of 9.6 hours. The funds serve as down payments or full payment for real estate.
The loan terms are flexible: interest and fees accumulate over time with no mandatory monthly payments, repayments can occur anytime without penalties, and loans are renewable if the LTV stays below 60%. Borrowers may also withdraw excess collateral if Bitcoin’s value rises during the loan period.
Ledn reports strong adoption of these loans in Latin America, the US, and parts of Europe, emphasizing Bitcoin’s borderless nature.
Loan volatility is managed by requiring additional collateral if Bitcoin’s price falls and the LTV rises. Should the LTV reach 80%, the lender liquidates enough Bitcoin to cover the loan, with any excess returned to the borrower. Real estate purchases remain unaffected by such liquidations.
Unlike traditional lenders wary of crypto due to regulatory and credit risks, Bitcoin-backed loans require no credit checks, relying instead on a 2:1 collateral ratio and instant liquidation capabilities.
According to Di Bartolomeo, Bitcoin’s high liquidity and 24/7 trading make it an excellent form of collateral. Ledn has issued over $300 million in retail loans in Q1 2025 and aims to surpass $1 billion by year-end. Clients have benefited from Bitcoin’s appreciation, earning returns that greatly exceed interest costs, with over 1,000 BTC withdrawn as excess collateral in 2024.
High-net-worth individuals increasingly prefer borrowing against Bitcoin to accessing liquidity for real estate while maintaining exposure to Bitcoin’s growth potential.
In support of this trend, Xapo Bank launched a lending product in March 2025 allowing qualified clients to borrow up to $1 million using Bitcoin as collateral, reflecting growing confidence in crypto-backed borrowing.