The loans offer a maximum 45% loan-to-value ratio and six-month terms, with interest rates ranging from approximately 10.7% to 14.2%. While Bitcoin price declines will not trigger liquidation, borrowers must make repayments on time or risk losing their collateral.
Strike Introduces Volatility-Proof Bitcoin Loans
Strike launched a new Bitcoin-backed loan product to solve one of the biggest problems faced by crypto borrowers: forced liquidations during periods of extreme market volatility. The company's latest offering removes margin calls and price-based liquidations entirely, and allows customers to keep their Bitcoin collateral even if the crypto experiences a sharp decline.
However, this added protection comes at a cost. Borrowers now face higher interest rates, a shorter repayment period, and strict repayment requirements.
Strike CEO Jack Mallers said the new loan product was developed after customers provided feedback on the company's original Bitcoin loan offering, which launched in May of 2025. During the following bear market, Bitcoin fell approximately 54% from its peak to its lowest point, which triggered liquidations for many borrowers whose collateral value declined below required thresholds. The new product is designed to eliminate that risk by ensuring that Bitcoin collateral is never sold simply because the market price falls.
Instead of relying on margin calls, Strike is charging borrowers a higher annual percentage rate (APR) to cover the cost of hedging against Bitcoin's volatility. According to the company, the maximum loan-to-value ratio is 45%.
This means that a customer who deposits $100,000 worth of Bitcoin as collateral can borrow up to $45,000. The loan term is limited to six months, and borrowers must make their repayments on time. While market movements alone will not trigger liquidation, failure to meet repayment obligations can still result in the loss of collateral.
Strike's volatility-proof loans carry an APR that is 2.95 percentage points higher than the company's standard Bitcoin loan products. Since Strike's regular loans currently charge between 7.75% and 11.25% APR, borrowers using the new product could pay interest rates ranging from approximately 10.7% to 14.2%. Mallers explained that the additional interest is used to purchase market hedges that protect both Strike and its customers from big price swings.
The launch comes as Bitcoin-backed lending faces adoption challenges despite growing interest from investors. According to a recent report from crypto lending platform Ledn, 88% of surveyed crypto investors said they would consider using a crypto-backed loan, yet only 14% have actually done so. The report identified concerns over market volatility and confidence in lending platforms as the primary reasons for this gap between interest and adoption.
Bitcoin's history of dramatic price swings made collateralized lending risky. Mallers said that Bitcoin has experienced declines of at least 30% in 10 of the past 12 years, while suffering drawdowns of 50% or more on four occasions since 2014. These large corrections frequently triggered automatic liquidations across the crypto lending sector, which forced borrowers to sell their Bitcoin at depressed prices.
Some analysts believe Strike's approach could address this long-standing issue. Bitcoin investor Fred Krueger argued that removing price-based liquidations could eliminate one of Bitcoin's biggest structural weaknesses during bear markets. Instead of temporary price declines forcing borrowers out of their positions, defaults would only occur if borrowers were unable to repay their loans. This could reduce forced selling during market downturns and help stabilize borrowing activity.
The product also received positive feedback from others. Rob Topping, executive chairman of Vibes Capital Management, described the offering as a useful option for borrowers looking for short-term liquidity without the risk of liquidation, although he acknowledged that the interest rate is relatively expensive.
