TL;DR
- Borrowing against Bitcoin gives you liquidity without selling your BTC, but the BTC must secure the debt and can be liquidated if the position becomes unsafe.
- Liquidium offers two paths. Simple creates one address-based loan without requiring an account. Advanced requires sign-in and uses eligible assets in a combined portfolio as collateral.
- Simple sign-in is optional. It lets you sync loans across devices, reuse saved addresses, and apply your profile email to loan notifications.
- Rates, liquidity, fees, LTV limits, confirmation times, and supported routes can change. Review the live app before funding or confirming a transaction.
Borrowing against Bitcoin can free up stablecoin liquidity while you keep exposure to BTC. You avoid a sale, but you take on debt, interest, and liquidation risk. The decision only makes sense when you understand how the loan opens, how you will repay it, and how far BTC can fall before the protocol can sell collateral.
Liquidium supports Bitcoin-backed borrowing through Simple Loans and the signed-in Advanced portfolio. This guide explains both paths and the checks that matter before you use either one.
What does it mean to borrow against Bitcoin?
A Bitcoin-backed loan uses BTC as collateral for a debt in another asset, often a stablecoin such as USDC or USDT. The protocol locks the collateral under its lending rules and releases the borrowed asset through a supported route.
You keep the economic exposure to Bitcoin while the loan is open. The BTC is not available to spend from your wallet during that time. If you repay the debt in full, including accrued interest, the protocol processes the return of eligible collateral. If the loan reaches its liquidation threshold first, the protocol can sell collateral to repay debt.
The loan-to-value ratio, or LTV, compares debt value with collateral value:
LTV = debt value / collateral value
At 50% LTV, a $500 debt is backed by $1,000 of collateral. If BTC falls while the debt stays the same, LTV rises. Interest also increases the debt over time. Both changes move the position closer to liquidation.
The app sets maximum borrowing limits below the liquidation threshold to leave a buffer. Current limits and thresholds can change, so use the values shown in Liquidium when you create or adjust the position.
Why borrow instead of selling BTC?
The main reason is liquidity. You may want stablecoins for expenses, trading, business operations, or another use while keeping your Bitcoin exposure.
Borrowing also creates a different tax event from selling in some jurisdictions. It does not guarantee that no tax is due. Interest, liquidation, use of borrowed funds, and local rules can change the outcome. Ask a qualified tax adviser about your situation.
Keeping the BTC position cuts both ways. You still benefit if Bitcoin rises, but you also carry the downside while paying interest. Borrowed money can amplify losses if you use it for another volatile investment.
Choose Simple or Advanced
Open the Liquidium app and use the selector at the top to choose Simple or Advanced.
Choose Simple for one dedicated loan
Simple is the direct, address-based path. You choose the borrow asset, set Bitcoin as collateral, enter refund and destination addresses, generate the loan, and send BTC to its supply address.
You can continue without an account or wallet connection. While signed out, Liquidium saves recent Simple Loans in the current browser. Optional sign-in with Internet Identity or a supported wallet keeps the loans on your profile and lets you reuse saved addresses.
Each Simple Loan has its own six-character Loan ID, supply address, repay address, refund address, destination address, and lifecycle.
Choose Advanced for portfolio borrowing
Advanced requires sign-in. You first supply BTC to your Advanced portfolio, then borrow against eligible collateral from the Borrow tab. Advanced calculates risk across the supplied and borrowed positions in that profile.
Use Advanced when you want to supply assets for variable yield, manage several positions together, or borrow and repay through a combined portfolio.
How to borrow against Bitcoin with Simple
1. Set the borrow amount and collateral
Select Simple, then Borrow. Enter the amount you want to receive, choose a supported borrow asset, and set Bitcoin as collateral.
Review the required BTC, borrow APY, LTV, and network fees. Leave room for BTC price movement and accrued interest. Borrowing the maximum gives the loan less space before liquidation.
The live asset picker is the source of truth for supported assets and networks. A route that is available today may be limited later by pool liquidity, market settings, or network support.
2. Keep native assets and ICP assets straight
This guide uses native BTC on the Bitcoin network as collateral. With ICP assets disabled in the Simple token picker, Bitcoin means native BTC and supported stablecoins use their displayed native networks.
Enabling ICP assets changes the picker to supported chain-key assets such as ckBTC, ckETH, ckUSDC, and ckUSDT on ICP. ckBTC and native BTC are different assets on different ledgers, even though ckBTC is backed by Bitcoin. Do not send native BTC to a ckBTC address or ckBTC to a native Bitcoin address.
Simple has its own ICP-assets switch inside the token picker. Advanced uses a separate setting and address flow. For current formats and ckAsset instructions, read ICP assets and Oisy.
3. Sign in or continue without an account
Select Borrow after reviewing the form. Liquidium offers sign-in through Connect a wallet or Internet Identity. Close the sign-in prompt to continue without an account.
Signed-out loans stay in that browser unless you later sync them to a profile. Save the Loan ID and receipt even if you sign in. Browser data can be cleared, and the receipt records the addresses needed to manage the loan.
4. Set the refund and destination addresses
The refund address must accept BTC on Bitcoin. Liquidium returns collateral there after full repayment or after a failed loan opening is processed.
The destination address must accept the borrowed asset on the network shown in the app. Liquidium sends the borrowed funds there after the BTC deposit confirms and the loan opens.
Signed-in users can save compatible addresses and reuse them across Simple and Advanced. Check the asset, network, and full address before generating the loan. Refund and destination addresses cannot be changed afterward, and an incompatible transfer may not be recoverable.
If native ETH is the destination, use a standard Ethereum wallet address. Smart contract wallet addresses are not supported for native ETH destinations.
5. Generate the loan and fund it with BTC
Open Advanced settings if you need to change the available LTV buffer or delivery window. Confirm that the addresses are correct, then select Generate loan.
Liquidium creates the Loan ID, BTC supply address, repayment address, and receipt. Save the Loan ID and receipt before sending BTC.
Send the amount shown by the app to the BTC supply address. The current Bitcoin funding flow waits for four confirmations. Bitcoin blocks average about 10 minutes, so four confirmations often take around 40 minutes. Block timing varies, and Liquidium still needs to detect and finalize the deposit. Follow the live loan status instead of treating 40 minutes as a guarantee.
BTC can move between loan generation and deposit processing. If the resulting LTV exceeds the accepted opening range, the loan may wait for more collateral. If it cannot open, Liquidium processes a refund to the refund address. Do not send extra BTC unless the loan state and app instructions call for it.
6. Manage, top up, and repay the loan
Open Simple, then Portfolio. The Simple Portfolio shows loans saved in the browser or synced to your profile, with groups such as Active, Awaiting deposit, and Closed.
You can find a loan with its Loan ID, a related address, or a transaction ID. Open an active loan to review LTV, debt, accrued interest, transaction history, and notification settings.
To lower LTV, send more BTC to the supply address or repay part of the debt with the borrowed asset through the repay address. Partial repayment lowers debt after it confirms, but it does not release part of the collateral. Liquidium returns the collateral after the full debt has been repaid and processed.
Interest continues to accrue while the debt remains active. Check the current full-repayment amount immediately before sending funds. A pending repayment does not protect the position until it confirms and becomes active.
How to borrow against Bitcoin with Advanced
1. Sign in and supply BTC
Select Advanced, then sign in with Internet Identity or a supported wallet. Open Supply, choose BTC, enter an amount, and review the supply APY, portfolio-health effect, and funding path shown for that route.
Depending on the asset and route, Advanced may use a supported linked wallet or an asset-specific deposit address. Native ICP wallet connection is not currently available. ICP and ckAsset routes use the compatible address flow shown by the app.
The supply becomes active after Liquidium detects and finalizes it. Only eligible active supplies can support borrowing. Read the Advanced supply guide for current funding and pending states.
2. Borrow a supported asset
Open Borrow and choose the asset you want to receive. Enter an amount or use the slider. Review the current and projected borrow APY, portfolio health, available liquidity, maximum amount, network fee, and expected delivered amount.
Select Borrow and complete the authorization and destination steps shown for that transaction. Funds may go to a supported linked wallet or a compatible destination address, depending on the route.
The success screen gives an estimated completion time and transaction reference. That estimate is specific to the selected asset, destination network, and current conditions.
Advanced debt can appear in the Portfolio and affect portfolio health before the outbound asset reaches its destination. Interest begins accruing when the debt position becomes active.
3. Monitor and repay the position
Open Advanced, then Portfolio, to see supplied assets, current debt, borrow APY, accrued interest, and portfolio health.
Advanced debt has no fixed repayment date. You can repay part or all of it through a supported linked wallet or the repay address shown by the app. Use the exact borrowed asset and network required for that position.
Repayment reduces debt and improves portfolio health after it confirms and processes. It does not withdraw supplied BTC. After reducing or clearing the debt, use the separate Withdraw action for eligible collateral. The Advanced repayment guide covers pending confirmations and wrong-network risks.
Risks to understand
If BTC falls, LTV rises and portfolio health falls. Once the position reaches its liquidation threshold, the protocol can sell part or all of the collateral to repay debt. Keep a buffer and monitor the position during volatile markets. A collateral deposit or repayment only changes the position after it confirms and processes.
Borrow APY is variable, and available liquidity or market limits can reduce how much you can borrow. Check the current rate, maximum, fees, and expected delivered amount before confirming.
Simple relies on refund, destination, supply, and repay addresses. Advanced may also request a destination or repay address. Check the asset, network, and complete address each time. A wrong-network or wrong-address transfer may not be recoverable.
Liquidium is non-custodial. Protocol canisters and smart contracts manage the position without taking your private keys, while the BTC remains locked as collateral. Smart-contract bugs, network disruption, oracle problems, liquidity stress, user error, and liquidation can still cause losses.
Liquidium has completed an independent Trail of Bits review of the ICP canisters used for Cross-Chain Loans. The review covers the code and scope examined; it does not remove market, protocol, network, or user-error risk. Read the security-review announcement for details.
A practical pre-borrow checklist
- Choose Simple or Advanced before funding anything.
- Confirm whether each asset is native or an ICP chain-key asset.
- Check the collateral, borrow asset, network, and every address.
- Review LTV or portfolio health and leave room for BTC volatility.
- Check borrow APY, liquidity, fees, and expected delivered amount.
- Save the Simple Loan ID and receipt when using Simple.
- Know the repayment asset, network, and address before opening the debt.
- Monitor the app until every deposit, borrow, repayment, or withdrawal has processed.
Borrow against Bitcoin on Liquidium
Read the Bitcoin-backed loan overview for the broader use case, or open the app and choose the flow that fits how you manage BTC.
Open Liquidium and select Simple for one direct loan or Advanced for portfolio-based borrowing.
This article is for educational purposes only and does not constitute financial, legal, or tax advice.
FAQs
Can I borrow against Bitcoin without selling it?
Yes. You can lock BTC as collateral and borrow a supported asset. You keep Bitcoin price exposure while the loan is open, but the collateral can be liquidated if the debt becomes too large relative to its value.
Do I need an account or wallet connection?
Simple does not require an account or wallet connection. Optional sign-in saves loans to your profile and enables shared addresses and profile-linked notifications. Advanced requires sign-in with Internet Identity or a supported wallet.
Is my BTC still in my wallet?
No. BTC used as collateral is locked under the protocol's lending rules while it secures the debt. Liquidium does not take your private keys, but you cannot spend locked collateral until the loan closes and the return is processed.
Can I borrow native USDC or USDT against native BTC?
Use the live asset picker to check current routes. With ICP assets disabled, the app shows native-chain versions. With the switch enabled, it shows supported ckAssets on ICP. Never assume that native USDC and ckUSDC, or native BTC and ckBTC, use the same network or address format.
How long does a Bitcoin-backed loan take?
The current native Bitcoin funding flow waits for four confirmations. Four Bitcoin blocks often take around 40 minutes, but actual block times vary and Liquidium still needs to detect and finalize the deposit. Other assets and Advanced outflows have different timing. Use the live status and estimate shown for the transaction.
Is there a fixed repayment date?
No. Liquidium loans do not use monthly payment dates or a fixed maturity date. Interest accrues while debt remains active, and the position must stay above the liquidation threshold.
Can I repay part of the loan?
Yes. Partial repayment lowers active debt after it processes. In Simple, partial repayment does not release collateral. Liquidium returns the collateral after the full debt is repaid and processed. Advanced collateral must be withdrawn separately after debt and portfolio-health rules allow it.
Is borrowing against Bitcoin safe?
It carries risk. Liquidation, variable rates, smart-contract faults, network delays, liquidity limits, oracle issues, and address mistakes can cause losses. A security review does not remove those risks.
posts