Why would anyone get a Bitcoin loan?

Quick answer

People get Bitcoin loans because they want to access money without selling their crypto. Sometimes it’s about taxes, sometimes it’s about timing, sometimes it’s about not wanting to break a long-term plan for a short-term need. 

The question everyone asks.

Whenever someone hears “Bitcoin-backed loan,” the first reaction is usually:

• “Why would anyone borrow against something as volatile as Bitcoin?”
• “Why not just sell it and keep things simple?”

On the surface, that sounds reasonable. But most people who borrow against Bitcoin aren’t doing it for complexity — they’re doing it because of life. Let’s walk through the real reasons, the ones people explain to friends, not to bankers.

Reason 1: They don’t want to interrupt their long-term plan.

Plenty of Bitcoin holders are not traders. They’re people who’ve built a position over months or years. They see Bitcoin as part of a long-term investing strategy.

So when something comes up — a deposit, a repair, a new business venture — selling Bitcoin feels like tearing out a piece of that plan.

They think: “I’ve held this far… do I really want to sell just because I need some cash right now?”

Borrowing gives them breathing room. They can handle today without rewriting their whole tomorrow.

Reason 2: They want flexibility, not a permanent decision.

Selling is a one-way door. Once you’ve sold, you can’t “undo” it without buying back — and that might be at a worse price. Borrowing is a temporary choice.

People like having options:

• They can repay next week or in six months.
• They can use only what they need.
• They can let their crypto sit while life moves on.

It’s the difference between pressing pause and pressing delete.

Reason 3: Timing is real, and selling at the wrong moment hurts.

Most people borrow not to outsmart the market, but to stay flexible when opportunities arise, regardless of where Bitcoin happens to be trading that day.

• You might need to cover a down payment.
• You might need funding for your new business venture.
• You could get a chance to join a deal that can’t wait.

And of course, these moments never happen when the market is “perfect.” Borrowing helps people avoid what they call “a regret sale” — offloading Bitcoin right before the market recovers.

Reason 4: They want to use Bitcoin in real life without giving it up.

A weird tension exists with crypto:

People want to use their Bitcoin, but they also want to keep their Bitcoin.

Borrowing is one of the few ways to experience both. Your crypto stays yours, while you still get liquidity for everyday life. It turns Bitcoin from something you only hold into something you can actually work with.

Reason 5: Some people treat Bitcoin like a working asset, not just a balance.

For long-term holders, their Bitcoin is more than a number on a screen. It’s part of a bigger picture — a savings strategy, a wealth plan, something they expect to keep for years.

Borrowing shifts the mindset:

• “My Bitcoin stays where it is.”
• “I still get liquidity.”
• “I don’t need to break my position to solve a short-term need.”

This approach has existed in traditional finance for decades. People borrow against homes, stocks, portfolios — not because they’re reckless, but because they want to keep the underlying asset intact. Bitcoin holders are simply adopting the same logic.

Reason 6: It gives people liquidity without creating a taxable event from selling.

In many places, selling an appreciated asset can trigger a taxable event. Borrowing against Bitcoin instead of selling it lets people access liquidity while keeping their holdings in place. 

It’s a way to manage expenses or opportunities without turning a long-term asset into a sale that may carry tax implications, depending on the jurisdiction.

For many wealth-minded holders, that’s not just convenient — it’s part of how they prefer to structure their finances.

How this all comes together with Nexo’s Credit Line.

Once the logic makes sense, the mechanics become simple.

The Nexo Credit Line is designed for people who want flexibility, control, and a way to stay invested while still accessing liquidity.

Here’s how it works in practice:

• Your crypto stays in place — you’re not selling it

Your assets remain part of your long-term position.

• You access stablecoins backed by your crypto

You don’t go through any credit checks. You get near-instant approval and simply unlock liquidity based on the value of your holdings.

• Rates start from 2.9% annual interest

Depending on your Loyalty Tier and Loan-to-Value (LTV), you can borrow at rates starting from 2.9% annual interest.

• No fixed repayment schedule

You repay on your own terms. There are no monthly minimums or due dates forcing you to unwind your plans prematurely.

• Repay in crypto, fiat, or any combination

You maintain control over how and when you close the credit line.

• Your credit limit adjusts dynamically with your collateral value

As your Bitcoin portfolio moves, so does your available limit — something wealth-focused individuals appreciate for planning.

Using the Nexo Card alongside your Credit Line.

This is where borrowing becomes even more tangible.

The Nexo Card lets you access your Credit Line directly at checkout:

Credit Mode

When you pay in Credit Mode:

• You access funds backed by your crypto
• Your BTC remains untouched
• There’s no sale happening in the background
• You enjoy no fixed repayment dates
• You spend borrowed funds at rates starting from 2.9% annual interest

For someone who wants liquidity without breaking their position, this feels intuitive and elegant.

Debit Mode

If you prefer, you can also spend from your available balance. Any crypto you keep in your Savings Wallet can earn up to 14% annual interest, until the moment you choose to use it.

Both modes work together, so you can choose how each payment fits your broader strategy.

Frequently asked questions.

Why would someone borrow against Bitcoin?

To access liquidity without dismantling a long-term position. It mirrors how affluent individuals use borrowing in traditional finance.

Isn’t borrowing risky?

Borrowing requires responsibility. People who benefit most borrow conservatively and closely monitor their Loan-to-Value (LTV) ratio.

Does borrowing mean my Bitcoin is sold?

No. Your assets stay in place and back the liquidity you use as collateral. 

How does repayment work?

There’s no fixed schedule. You choose when and how much to repay.

Can I borrow at 2.9% annual interest on Nexo?

Yes. To access this rate, you need to be a Platinum member and keep your Loan-to-Value (LTV) at or below 20%. Your exact rate depends on your tier and the LTV you choose to maintain. 

How does the Nexo Card connect to my Credit Line?

When you pay in Credit Mode, your transaction is covered by the Nexo Credit Line, so your crypto remains untouched.

The content of this article is intended solely for general informational and educational purposes. It does not constitute and should not be relied upon as financial, investment, legal, accounting, or tax advice, or as a recommendation to buy, sell, or hold any cryptocurrency or other financial instrument. Trading and investing in digital assets such as Bitcoin and other cryptocurrencies are inherently speculative and involve a substantial risk of loss. Always do your own research and consult a qualified professional before making any financial decisions.