Bitcoin Loans Reshape Real Estate Financing
A growing number of Bitcoin investors are turning to crypto-backed loans to buy real estate, unlocking liquidity without having to sell their BTC holdings. This strategy allows them to preserve potential future gains while avoiding capital gains taxes—an increasingly popular approach among high-net-worth individuals, crypto-native entrepreneurs, and early adopters.
Avoiding Capital Gains by Borrowing, Not Selling
According to Mauricio Di Bartolomeo, co-founder of crypto lending platform Ledn, Bitcoin-backed loans are appealing because they don’t count as taxable events in most jurisdictions. “Borrowing against Bitcoin doesn’t trigger capital gains taxes in most jurisdictions because it’s not a taxable event—you’re not selling the asset,” he explained.
This means Bitcoin holders can use their crypto as collateral, access cash or stablecoins, and purchase real estate—all without selling their core digital assets or paying taxes on appreciated value.
A Quick and Flexible Loan Process
To obtain these loans, users typically lock up their BTC at a 50% loan-to-value (LTV) ratio. They then receive fiat currency or stablecoins, often in less than 10 hours, which can be used as a down payment or to fund the full property purchase.
What sets these loans apart is their flexibility. Borrowers can repay at any time without penalties and are not bound to fixed monthly payments. Moreover, if Bitcoin appreciates during the term of the loan, the borrower can withdraw some of the excess value of the collateral—allowing them to benefit from BTC’s growth even while it’s locked.
Managing Risk: Bitcoin’s Volatility Still Matters
Of course, Bitcoin’s volatility presents challenges. If BTC’s price drops and the loan’s LTV ratio rises above 80%, lenders may liquidate part of the collateral to protect the value of the loan. This ensures the lender is covered but can impact the borrower’s holdings if not carefully managed.
Still, most platforms, like Ledn, have systems in place to notify users in advance so they can deposit additional BTC or repay part of the loan to avoid forced liquidation.
Ledn Reports Surging Demand and Record Volume
The model appears to be working. Ledn reported issuing over $300 million in Bitcoin-backed loans in Q1 2025 alone, with expectations to surpass $1 billion by year-end. The platform has also noted that, in 2024, many clients earned 8 times more from Bitcoin appreciation than they paid in interest—highlighting the financial upside of holding BTC while borrowing against it.
“Bitcoin as collateral is borderless, deeply liquid, and trades 24/7, making it an ideal form of collateral,” said Di Bartolomeo. The growth in demand spans across markets, especially in Latin America, the U.S., and Europe, where crypto adoption is strongest.
Institutional Adoption Expands the Market
The trend isn’t limited to retail borrowers. Wealthy investors and institutions are increasingly using BTC loans to acquire hard assets like real estate without reducing their crypto exposure.
One example is Gibraltar-based Xapo Bank, which introduced its own Bitcoin-backed lending product in March 2025. The program allows clients to borrow up to $1 million against their Bitcoin holdings. CEO Seamus Rocca pointed to rising global trust in BTC and said the trend reflects “growing market confidence in Bitcoin as a long-term store of value.”
Bitcoin Becomes a Bridge to Real Assets
This shift demonstrates how Bitcoin is evolving from a speculative asset to a financial tool with real-world applications. By using BTC as collateral, crypto investors are bridging the gap between digital wealth and physical property, helping them diversify into real estate while keeping upside exposure intact.
A Trend That’s Here to Stay?
As Bitcoin continues to gain institutional acceptance and global regulatory clarity improves, crypto-backed lending is likely to grow. It gives investors a way to access liquidity, preserve tax advantages, and participate in both digital and traditional markets.
For Bitcoin believers who don’t want to sell, borrowing against BTC might just be the smartest path from crypto to concrete.
