What is a crypto-backed loan?
A crypto-backed loan uses eligible digital assets as collateral so you can access liquidity without selling the asset first.
Collateral Mechanics Lab
Access Liquidity Without Selling The Asset First.
Deposit collateral. Control the LTV. Borrow. Repay. Release the collateral. Do not open a crypto loan before you understand the liquidation line.
- 01Collateral
- 02Asset value
- 03LTV
- 04Borrowing power
- 05Interest
- 06Repayment
- 07Release
Key Answers
Collateral creates borrowing power. LTV sets the pressure line.
What is LTV?
LTV is the loan-to-value ratio: borrowed amount relative to collateral value. A higher LTV leaves less room if collateral value falls.
What creates borrowing power?
Borrowing power depends on the collateral value and the LTV chosen or allowed for that asset.
What happens if collateral value falls?
LTV can rise. A higher LTV may require more collateral, repayment, or trigger liquidation under platform rules.
Loan mechanics
Follow the position from collateral to release.
A wallet controls access. A loan uses the asset as collateral. They are not the same product.
What collateral does
Eligible crypto is locked as security for the Credit Line. The asset position remains collateral while the loan is open.
How LTV works
LTV compares borrowing against collateral value. Lower starting LTV usually leaves more distance before action thresholds.
Borrowing power
Borrowing power is the amount available based on collateral value and LTV. It is not a guarantee of final economic cost.
Interest and time
Interest is part of the borrowing cost while the loan remains open. Review the platform interest structure before borrowing.
Collateral health
Monitor collateral value against the open borrowing balance. Health depends on price movement and repayment actions.
Price decline
If collateral value falls, LTV rises. That can reduce available capacity and increase liquidation pressure.
Additional collateral or repayment
Adding collateral or repaying part of the loan can lower LTV and restore distance from the liquidation line.
Liquidation mechanics
When LTV reaches the platform threshold, collateral can be liquidated under the product rules. Liquidation is a process risk, not an impossibility.
Partial and full repayment
Partial repayment can reduce debt and LTV. Full repayment closes the borrowing position according to platform rules.
Collateral release
After repayment, borrowing capacity and collateral status change. Confirm the release or unlocked capacity in the platform account.
Calculator interpretation
Model the loan before opening it.
Official calculators can show indicative borrowing power, interest cost, or liquidation distance. Treat those outputs as scenarios, not guaranteed terms.
Next steps
Move from mechanics to the partner review.
Borrow Against Crypto vs SellCompare keeping the asset as collateral with selling for final liquidity.Nexo Review for Crypto LoansReview the Credit Line partner after the mechanics.Best Crypto WalletsSeparate custody decisions from borrowing decisions.On and Off Ramp HubCompare cash-access options when selling is the chosen approach.Crypto Record Keeping GuideKeep collateral, repayment, and transfer records together.
Final Nexo CTA
Compare collateral, LTV, and repayment before borrowing.
FAQ
Crypto-backed loan questions
How do crypto-backed loans work?
Eligible digital assets are deposited as collateral. Borrowing power depends on collateral value and LTV. Interest accrues while the loan is open, and repayment changes borrowing capacity and collateral status.
What is loan-to-value (LTV)?
LTV is the borrowed amount relative to collateral value. If collateral value falls, LTV rises and the position can move closer to platform action thresholds.
Does borrowing avoid selling forever?
Borrowing preserves the collateral position while debt exists, but it adds interest and liquidation risk. Selling ends exposure on the amount sold and creates no loan balance.
How should I read a loan calculator?
Treat calculator outputs as indicative scenarios for borrowing power, interest cost, or liquidation distance. They are estimates for modeling, not guaranteed terms.
Where does Nexo fit?
Nexo is the featured A Crypto Box partner for a collateral-backed Credit Line. Review collateral, LTV, repayment, and liquidation mechanics before opening a position.
How can tax rules differ between borrowing and selling?
Selling and borrowing can be treated differently under applicable tax rules. Tax treatment depends on the jurisdiction and the transaction.