How to borrow against your crypto without selling (2026)
Borrowing against crypto means pledging your tokens as collateral and taking out a stablecoin loan against them — you keep upside exposure, you don't trigger a sale, and you don't need a credit-bureau pull. The trade-off is liquidation risk: if your collateral's price falls past a threshold, the smart contract sells it automatically.
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 is that if the collateral’s price falls too far, the smart contract sells it automatically.
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 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.
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 and the rate doesn’t change mid-term.
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.
How do I pick the right loan?
Four numbers matter:
- APR. Total interest cost per year. Variable rates can change, so look at the historical range too.
- Maximum LTV. The higher it is, the less collateral you need to lock — but the closer you sit to liquidation.
- Liquidation LTV. The line above which the contract sells collateral. The gap between max-LTV and liquidation-LTV is your safety buffer.
- 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. The full risk framing lives in the Terms of Service, Section 7.
Frequently asked questions
Two reasons. First, you keep upside exposure — if ETH appreciates while the loan is open, that gain is yours. Second, selling can be a taxable event in most jurisdictions, while borrowing typically isn't (though liquidation is). For long-term holders, borrowing is often the cheaper way to get liquidity.
Typically 30% to 70% of the collateral's current market value, depending on the protocol and the asset. Bluechip collateral (ETH, BTC) supports higher loan-to-value ratios than long-tail tokens. Borrow well below the maximum to leave room for price moves.
Your loan-to-value rises. If it crosses the liquidation threshold (usually 5–10 percentage points above the maximum origination LTV), the smart contract sells collateral to pay back the loan plus a penalty. You can prevent this by topping up collateral or repaying part of the principal before the threshold is hit.
Yes — most on-chain lending protocols are permissionless and don't require KYC for the loan itself. KYC may be required for fiat off-ramping or for some affiliate offers, but the borrow transaction is just a wallet signature.
On Layer-2s (Base, Arbitrum, Optimism) gas is cents and stablecoin-borrow APRs are typically lower than on Ethereum mainnet. For BTC, you'll wrap to WBTC or cbBTC before posting collateral. Compare rates across protocols — Teller's offer rail surfaces the lowest live APR for your wallet's chain.
Open Teller and put this into practice
Connect a wallet, build your on-chain credit score, and see real loan offers matched to your position — all in one place.
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