In a significant development for the cryptocurrency lending space, Strike, the Bitcoin financial services platform helmed by CEO Jack Mallers, has unveiled a revolutionary Bitcoin-backed loan product dubbed “volatility-proof.” This innovative offering aims to protect borrowers from the pitfalls of margin calls and price-triggered liquidations that have plagued traditional crypto loans.
The new loan product is designed to provide a safety net for borrowers, ensuring that their collateral remains intact even in the face of substantial Bitcoin price drops. As long as borrowers keep up with their payments, their Bitcoin will not be sold off, regardless of how much the market fluctuates.
“You never have to sell your Bitcoin,” Mallers emphasized in recent communications about the product’s launch. This approach comes in response to feedback from customers who experienced significant liquidations during the sharp market downturn following Bitcoin’s peak in May 2025.
Currently, Bitcoin is trading around $63,000, having dipped to $58,190 on June 25, after reaching an all-time high of $126,080 in October. The introduction of this new loan structure reflects a growing demand for more predictable and stable financial options within the crypto ecosystem.
The Cost of Protection
While the protection offered by this new loan structure is a welcome change, it does come at a price. The annual percentage rates (APRs) for these loans range from 10.7% to 14.2%, which is notably higher than Strike’s standard loan product that charges between 7.75% and 11.25%. Mallers explained that the additional costs are necessary to hedge against the risks associated with removing price triggers, ensuring the stability of the loans.
The maximum loan-to-value ratio is set at 45%. For instance, a borrower providing $100,000 in Bitcoin as collateral can secure a loan of up to $45,000, with terms spanning six months—shorter than the standard loan duration offered by Strike.
What If Payments Are Missed?
For those who may struggle to keep up with payments, Strike has implemented a 10-day grace period before any collateral liquidation actions are initiated. Borrowers are encouraged to communicate with Strike during this window to discuss their situation. If no communication occurs, the company retains the right to sell the Bitcoin collateral to cover overdue amounts.
As Mallers aptly put it, “That’s why we call it ‘volatility-proof,’ not ‘liquidation-proof.'” This distinction highlights the product’s intent to offer security while still holding borrowers accountable for their obligations.
Industry experts have weighed in on the implications of such a product. Bitcoin investor Fred Krueger noted that this could significantly reduce forced selling during market downturns, as defaults would stem from borrowers’ inability to pay rather than market volatility. Meanwhile, Rob Topping from Vibes Capital Management recognized the potential value for those seeking liquidity but cautioned that the 14% rate is on the higher side.
These Bitcoin-backed loans are now available in most US states for both personal and business use, with a minimum loan amount starting at $10,000 for personal borrowers and as low as $5,000 for businesses in select regions. Other notable players in the Bitcoin-backed loan market include Binance, Coinbase, Nexo, and Xapo Bank.
A recent report from a crypto lender indicated that while 88% of crypto investors are open to the idea of crypto-backed loans, only 14% are actively utilizing them. Strike’s latest offering may help bridge this gap by providing a more secure and appealing option for borrowers seeking to leverage their Bitcoin without the fear of liquidation.
