Strike launches Bitcoin loans with higher rates to limit bear-market liquidation risk

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Strike Bitcoin loans launch

Highlights

Strike launches a new 'volatility-proof' Bitcoin loan product with annual percentage rates ranging from 10.7% to 14.2%, up 2.95 percentage points over standard loans.
The new structure prevents Bitcoin liquidation due to price drops, but requires borrowers to stay current on payments, with collateral sold only if they default after a 10-day grace period.
Despite 88% of surveyed crypto investors considering crypto-backed loans, only 14% use them, citing market volatility and weak product confidence as main barriers to wider adoption.

New loan structure targets volatility concerns

As reported by Cointelegraph, Strike CEO Jack Mallers says the new loan follows customer feedback on the company’s first Bitcoin loan product, launched in May 2025, after many liquidations occurred during a period when Bitcoin fell 54% from peak to trough.

Mallers says the new structure means pledged Bitcoin does not move regardless of how far the cryptocurrency falls in price. He says the trade-off is a higher borrowing cost, a shorter repayment period and the requirement to stay current on payments, with the company using the extra charge to fund additional market hedges.

The maximum initial loan-to-value ratio is 45%, meaning a customer posting $100,000 in Bitcoin collateral can borrow up to $45,000. Strike’s standard Bitcoin loans carry annual percentage rates of 7.75% to 11.25%, while the new volatility-proof version can range from about 10.7% to 14.2%, or 2.95 percentage points more than the standard product.

Bitcoin lending adoption remains limited despite investor interest. A June report from crypto lending platform Ledn says 88% of surveyed crypto investors would consider a crypto-backed loan, but only 14% use one, citing weak confidence in lending products and market volatility among the main reasons for the gap.

Borrower obligations and market implications

Strike says borrowers who miss a payment have 10 days to make it or contact the company to explain their situation. If payment is still not made after that period, the company may begin selling part of the Bitcoin collateral to cover overdue amounts, meaning the product is protected from price-driven liquidation but not from borrower default.

The loans are available in most U.S. states for both personal and business borrowers and can be used for new borrowing, refinancing or consolidation. Minimum loan sizes vary by state, with personal loans starting at $10,000 and some business loans available from $5,000.

The launch comes as Bitcoin-backed lenders try to broaden the cryptocurrency’s use beyond savings and long-term holding. Other market participants offering Bitcoin-backed loans include Binance, Coinbase, Nexo and Xapo Bank, while some investors say products that reduce forced selling during downturns could help ease one of the sector’s structural pressures in market crashes.

Our earlier analysis of Strategy (MSTR) focused on the stock’s steep decline and heightened volatility as bearish technical signals and weak quarterly results outweighed longer-term Bitcoin-linked optimism. We also noted investor skepticism around claims that Bitcoin appreciation could sustain dividend payouts, especially amid a large unrealized digital-asset loss and liquidity-focused moves such as selling BTC and raising the preferred dividend yield.

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