How to borrow against your crypto without selling (2026)

If you’re long-term bullish on the crypto you hold, selling for liquidity is the wrong instrument: you give up the upside and, in most jurisdictions, you trigger a capital gain. Borrowing against the position keeps you in. The mechanics are simple: lock the collateral, take a stablecoin loan, pay interest, get the collateral back when you repay. The catch, on most venues, is that if the collateral’s price falls too far, the loan gets liquidated automatically. This guide covers why borrowing beats selling for long-term holders, the practical ways to do it, and how to pick between them.

Why borrow against your crypto?

• Keep your upside. A 30-day loan against ETH doesn’t cap your exposure to ETH appreciation.
• Avoid a taxable event. In most jurisdictions, taking a loan against an asset is not a disposition. (Liquidation is; see the warning further down.)
• Move fast. No income verification, no bureau pull, no underwriter. Wallet signs, funds land.
• Borrow in stablecoins. USDC, USDT, DAI: fungible dollars you can spend, off-ramp, or redeploy.

The tax logic: why borrowing beats selling

The tax point deserves its own section, because it’s the main reason long-term holders borrow at all. Selling appreciated crypto is a disposal: you realize capital gains and owe tax on the difference between the sale price and your cost basis. Borrowing against the same crypto is generally not a taxable event: loan proceeds aren’t income, because you owe the money back, and pledging collateral isn’t a sale. You raise the same cash without forcing a gain the moment you need liquidity.

The edge cases matter. If your collateral is liquidated, that is typically treated as a disposal at that point, so a forced sale can hand you a tax bill in the same year you lost the asset, which is one more reason loan structure matters. Deferring a gain also isn’t erasing it; you’re choosing the timing, not escaping the tax. The full picture, including what happens at liquidation and which records to keep, is in the crypto loans and US taxes guide. This is general information, not tax advice; talk to a tax professional about your situation.

The four practical ways to borrow against crypto

1. Permissionless DeFi lending pools

Aave, Compound, Morpho, Spark, and similar protocols are money-market pools. Deposit collateral, borrow against the global pool, pay a variable rate that’s set by utilization. Fast to open, the rate floats, and the position can be liquidated the moment its health factor crosses the threshold. Our Teller vs Aave comparison goes deep on this model.

Best for: ETH and BTC holders who want a perpetual line of credit and don’t need a fixed maturity.

2. Order-book lending

Protocols like the Teller Protocol match a specific borrower to a specific lender at a fixed term and fixed rate. The loan has a due date, the rate doesn’t change mid-term, and on Teller’s no-margin-call terms a price dip can’t force liquidation before maturity.

Best for: borrowers who want certainty about cost and timing, or who want to use long-tail collateral that pools don’t list.

3. CEX-margin or CEX-borrow

Coinbase, Binance, Kraken offer fiat or stablecoin loans against crypto held in your exchange account. Simpler UX, but custodial (the exchange holds the collateral) and often more restricted by geography.

Best for: users already on the exchange who don’t want to move to a self-custody wallet for the loan.

4. Affiliate / aggregator routing

Loan-offer marketplaces (like Teller) surface live offers from across the above categories, compare APRs and required LTVs, and route you directly to the lender that matches your wallet’s chain, score, and collateral.

Best for: anyone who doesn’t want to manually price-check five different front-ends before signing.

The three structures compared

Strip away the brand names and there are three structures underneath, each with an honest trade-off:

Which structure fits your scenario?

• “I want an open line I can draw and repay forever.” A DeFi money market, if you’ll actively watch your health factor and keep a conservative LTV.
• “I can’t watch charts and refuse to be liquidated on a dip.” A fixed-term, no-margin-call loan. You manage a calendar, not a price line; the mechanics are in the crypto-backed loans guide.
• “My crypto is already on an exchange and I’m staying there.” A CEX borrow is the path of least resistance, if you accept custody.
• “I don’t want to lock up crypto at all.” Then don’t pledge it: a no-collateral personal loan paid out as cash to your bank account is the other honest path, and there is nothing to liquidate.

How do I pick the right loan?

Four numbers matter:

1. APR. Total interest cost per year. Variable rates can change, so look at the historical range too.
2. Maximum LTV. The higher it is, the less collateral you need to lock, but the closer you sit to liquidation.
3. Liquidation LTV. The line above which the contract sells collateral. The gap between max-LTV and liquidation-LTV is your safety buffer.
4. Term and fees. Fixed-term loans have a hard due date; perpetual loans accrue indefinitely. Watch for origination fees and protocol fees on top of interest.

Practical example

Say you hold 4 ETH at $3,500 each ($14,000 total). A protocol offers 50% max-LTV with a 60% liquidation-LTV at 7% APR for a 90-day term.

• You can borrow up to $7,000 USDC against the 4 ETH.
• You decide to borrow $5,000 (a 35.7% LTV at origination) to keep a buffer.
• Liquidation triggers at $5,000 / 0.60 = $8,333 collateral value. That’s 4 ETH × $2,083, meaning ETH would have to fall ~40% before liquidation.
• 90-day interest: $5,000 × 7% × (90/365) ≈ $86.
• You repay $5,086 to get the 4 ETH back.

The two risks you have to internalize

• Liquidation can take 100% of your buffer. If ETH dumps 40% and you can’t top up or repay in time, the contract sells. You lose the loan’s value in collateral plus the liquidation penalty.
• The on-chain due date is the real one.App-side notifications are courtesy only and not guaranteed. Don’t rely on email reminders to know when a loan matures.

Where to get a loan against your crypto

Connect your wallet to Teller; the home tab’s offer rail surfaces live loan offers across chains with the APR, LTV, and due-date displayed before you sign. If you’d rather borrow without pledging crypto at all, check whether you pre-qualify for a no-collateral loan: a soft check with no hard credit pull and nothing locked up. The full risk framing lives in the Terms of Service, Section 7.