In this article, I will discuss the use of crypto as collateral for a loan while maintaining ownership in 2025. DeFi has evolved alongside crypto-backed lending, making it possible to access digital assets’ liquidity without shedding ownership.
- What Does it Mean to Use Crypto as Collateral?
- How To Add Crypto as Collateral for a Loan Without Losing Ownership (2025)”
- Example: Using Nexo to Add Crypto as Collateral Without Losing Ownership (2025)
- Sign Up and Verify
- Deposit Crypto
- Get Instant Credit Line
- Borrow Without Selling
- Repay and Reclaim
- What platforms allow me to use crypto as collateral while retaining ownership?
- Benefits of Using Crypto as Collateral
- Access liquidity without selling
- Avoid triggering capital gains taxes
- Maintain long-term exposure to appreciating assets
- No credit checks or lengthy approval processes
- Conclusion
- FAQ
In this article, we will discuss the top platforms to aid in secure borrowing while navigating responsible lending, alongside the benefits and processes.
What Does it Mean to Use Crypto as Collateral?
Using crypto assets as collateral means putting up your crypto assets such as Bitcoin, Ethereum, or stablecoins to secure a loan without selling them. Rather than selling your assets, you lock them in a smart contract or custodial account.
In exchange, you receive a loan in fiat or another cryptocurrency based on a fraction of your crypto’s value, a ratio referred to as Loan-to-Value or LTV. You get your cryptocurrency back if you repay the loan on time.
Otherwise, the lender has the right to liquidate your collateral. With this approach, you are able to access liquidity without selling your cryptocurrency assets, and while still keeping the potential future gains on them.
How To Add Crypto as Collateral for a Loan Without Losing Ownership (2025)”
Here’s a platform-specific example for your article section on “How To Add Crypto as Collateral for a Loan Without Losing Ownership (2025),” using Nexo as the platform:
Example: Using Nexo to Add Crypto as Collateral Without Losing Ownership (2025)
Nexo is a well-known CeFi lending platform that enables you to borrow cash or stablecoins using your crypto as collateral without the need to sell it. Here’s a step-by-step overview:
Sign Up and Verify
Create an account on Nexo and complete the KYC verification.
Deposit Crypto
Transfer supported cryptocurrencies like BTC, ETH, or USDT to your Nexo wallet.
Get Instant Credit Line
Nexo instantly allocates a credit line proportionate to your deposited assets. The LTV ratios range from 15% to 90% depending on the asset.
Borrow Without Selling
Withdrawals in fiat or stablecoins can be done instantly. Your cryptocurrencies are still yours to keep, only held in safe custody as collateral.
Repay and Reclaim
Your full collateral can be reclaimed instantly for any qualifying collateral without any penalties. Interest is only charged on the withdrawn amount.
With Nexo, you maintain legal ownership of your crypto while accessing liquidity, thus ensuring you do not need to sell during market highs.
What platforms allow me to use crypto as collateral while retaining ownership?
Aave
Aave is a pioneer in DeFi, and it allows users to lend and borrow using crypto as collateral. Users can borrow against their assets by depositing ETH, USDC, or DAI into Aave’s smart contracts without losing ownership.
Loans are always overcollateralized, and dynamic LTV and interest rate models are used. All transactions are managed using smart contracts, so users retain complete control of their funds.
Aave also supports flash loans and rate switching. Without a central custodian, your crypto is kept in a decentralized reserve, avoiding counterparty risks and providing immediate access to liquidity.
Compound
Compound is a decentralized protocol on a crypto money market that allows users to supply crypto assets to earn interests or borrow using their crypto as collateral. Deposited assets are transformed into cTokens that are interest-bearing.
Loans can be borrowed against collateral that a user wants to retain ownership of. Governance is done through the community as COMP token holders vote on central protocol changes.
Interest rates are modified automatically based on the market supply and demand. Borrowers can only receive a loan up to a certain amount of interest bearing cTokens that they can withdraw.
Compound is non custodial and all the activities are done through smart contracts. It is good for users who need a crypto loan and don’t want to use centralized services or want to earn yield on locked collateral.
Binance Loans
Binance Loans allows clients to conveniently borrow crypto against collateral that is kept on Binance, making it a centralized and straightforward option. Users can select a brisk flexible term repayment or a fixed term repayment with LTV caps and a clear repayment plan.
Collateral can be BTC, ETH, BNB and stable coins, with loans being issued in USDT, BUSD and other currencies. Even though Binance retains custody of your collateral during the loan term, you still own the collateral and can repay the loan at any time, incurring no penalties.
The platform also has automatic liquidation thresholds to guard against excessive market losses. For users that need quick liquidity and would prefer a well-known centralized platform, Binance Loans works best.
CoinRabbit
CoinRabbit is a centralized platform that provides instant crypto-backed loans with no KYC requirements, which makes the platform faster than a lot of competition. The platform is more privacy-friendly than many others.
Users are allowed to deposit major assets like BTC, ETH, or USDT, and are then able to receive stablecoins or other cryptocurrency in exchange. The platform offers fixed interest rates, simple terms, and flexible repayment windows.
Since you are not selling crypto, you retain full ownership and assets are returned following the repayment of the loan. Most users of CoinRabbit tend to prefer privacy, speed and ease of use. This is quite useful in places with strict identity verification.
Benefits of Using Crypto as Collateral
Access liquidity without selling
Obtain cash or stablecoins while keeping your crypto assets through loan agreements, providing liquidity without asset liquidation.
Avoid triggering capital gains taxes
You do not sell crypto, thereby avoiding capital gains realization, and legally deferring tax obligations.
Maintain long-term exposure to appreciating assets
Retain crypto ownership for potential future value appreciation while obtaining liquidity by way of a loan.
No credit checks or lengthy approval processes
Most platforms do not need credit history; therefore, your crypto as full collateral ensures prompt loan approval.
Conclusion
To summarize, in 2025 employing crypto as collateral enables you to unlock liquidity without liquidating your assets or relinquishing ownership. The methods can be through DeFi or CeFi and are all seamless, safe, and devoid of credit checks.
Knowing the LTV ratios and risks, in addition to the platforms available, will let you borrow against your crypto and benefit from its growth in the long run. You will be able to leverage responsibly.
