You need liquidity and face a choice: sell your coins or borrow against them? Both are legitimate — but they lead to very different outcomes. This guide compares them calmly, so you can make the decision that fits your situation.
Key takeaways
- Selling: you get liquidity immediately, but give up the position and realise the price plus any tax.
- Crypto loan: you get liquidity and keep your coins as collateral — you pay interest for it.
- Either way the price risk stays relevant: selling forfeits the upside, a loan keeps you exposed to it.
The decision in one sentence
If you sell, you exchange coins for cash for good and give up any further price movement. If you borrow, you take liquidity against pledged coins and keep the position — for interest and with ongoing price risk. The core question is: do you really want to give up your coins?
What selling means
Selling is straightforward: you exchange your coins for cash and have the liquidity immediately. That can be the right call if you wanted to exit anyway or need the amount permanently. Two points are worth keeping in mind.
- You give up the position. If the price rises after you sell, you miss that move. Buying back at a higher price costs more.
- Selling can be a taxable event. Depending on your situation and the applicable law, a gain may be taxable. A loan generally is not a sale. Trade Lend does not provide tax advice — please clarify your case with a qualified professional.
What a crypto loan means
With a crypto loan you pledge BTC, ETH, SOL, XRP, BNB or LTC as collateral and receive a payout in USDT, USDC, BTC or ETH. The loan value is tracked in US dollars; you repay in the same asset it was paid out in. Interest accrues daily, and you can repay at any time with no prepayment penalty. After that, your coins are released again.
How much you can borrow depends on the loan-to-value ratio (LTV). The standard is 50%, the warning zone begins at 60%, and 70% is the maximum at high risk — BTC, for example, is borrowable up to 70%. If the ratio rises, we notify you. The article on loan-to-value and LTV explains the details.
Our approach to collateral
We never sell collateral quietly or automatically. We prioritize communication and provide multiple notifications before any manual collateral action is considered.Loan and selling compared
| Criterion | Selling | Crypto loan |
|---|---|---|
| Position | Given up for good. | Kept as collateral. |
| Liquidity | Available immediately. | Payout in USDT, USDC, BTC or ETH. |
| Cost | Trading cost, possibly tax on gains. | Interest, accrued daily; repay any time. |
| Upside | Gone after the sale. | Kept while the coins are pledged. |
| Price risk | Ends with the sale. | Stays with you; the loan-to-value ratio is monitored. |
| Way back | Buy back only at the then-current price. | After full repayment you get the same coins back. |
Cost and risk, honestly
A loan is not free: you pay interest, and the price risk stays with you. If the price of your collateral falls significantly, the loan-to-value ratio rises. As it approaches roughly 80 to 85%, we reach out proactively to find a joint solution — for example additional collateral or a partial repayment. A manual collateral action is a last resort, only after a prolonged move toward around 95%, and always after communication.
In favour of a loan
- You keep your coins and the upside if prices rise.
- Liquidity without triggering a sale.
- Daily interest, repay any time with no prepayment penalty.
Points to consider
- You pay interest for as long as the loan runs.
- The price risk stays with you; if prices fall, the loan-to-value ratio rises.
- If the collateral drops sharply, additional collateral or a partial repayment may be needed.
Not tax or investment advice
This article compares two paths in general terms and is not tax or investment advice. Whether selling or a loan makes sense for you depends on your personal situation and the applicable law.Your decision in three questions
- Do I want to exit for good? If yes, selling is the natural choice.
- Do I still believe in the asset? If yes, a loan keeps your position.
- Can I carry interest and price risk? With a loan you should plan for both.
Model your case with no obligation in the loan calculator. If you want a return on idle coins rather than liquidity, the Earn program may be the better fit.
Frequently asked questions
Yes. Your coins stay pledged as collateral and are not sold, so you continue to benefit if the price rises. The flip side: if the price falls, the price risk stays with you and the loan-to-value ratio increases.
In the same asset the loan was paid out in (USDT, USDC, BTC or ETH). The outstanding balance is tracked in US dollars; interest accrues daily, and you can repay at any time with no prepayment penalty.
No. We prioritize communication and provide multiple notifications before any manual collateral action is considered. There is no automatic or silent sale.
Selling can be a taxable event, whereas a loan generally is not. This depends on your personal situation and the applicable law. Trade Lend does not provide tax advice; please clarify your case with a qualified professional.
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This article is for general information only and does not constitute investment, legal or tax advice. Crypto loans carry risks, including price fluctuations of the collateral.