Loans
Bitcoin-Backed Loans in Australia: Fund Your Next Move Without Selling BTC
If you need AUD and you're holding Bitcoin, selling isn't the only way to get it. A Bitcoin-backed loan lets you borrow against your BTC and keep holding it, at up to 50% LVR, with loan amounts from $50 to $5 million AUD. You also take on interest, fees, and the risk of a default notice if the price falls far enough. Here's how the two options compare.
Key takeaways
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Selling Bitcoin ends your exposure to it. Borrowing against it doesn't, and your BTC stays yours for the life of the loan.
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Block Earner lends up to 50% LVR against BTC and WBTC, on both a Line of Credit and a Fixed Term loan.
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A Line of Credit runs at 9.50% p.a. (11.93% p.a. comparison rate^) over 12 months, with no monthly repayments. A Fixed Term loan runs at 11.50% p.a. (12.17% p.a. comparison rate^) over three to five years, with monthly repayments.
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Both carry a 2% origination fee. Selling crypto in the app to make a repayment costs 0.6% incl. GST.
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If Bitcoin's price falls, your LVR rises. Above 65% on a BTC loan you'd receive a 30-day default notice, and you'd need to repay, add more Bitcoin as security, or sell part of it.
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If Bitcoin's price rises, your LVR falls, and you may be able to redraw more AUD, subject to approval, with the 2% origination fee applying to the redraw.
What you give up when you sell
Selling is the most direct way to turn Bitcoin into cash. It's also final. Once the sale settles you no longer hold that BTC, so whatever the price does afterwards is no longer your gain or your loss.
There's a transaction cost too. Selling crypto inside Block Earner attracts a Sell Crypto Fee of 0.6% incl. GST.
Tax treatment depends on your individual circumstances, and Block Earner doesn't provide tax advice. Talk to a registered tax agent about your own position before you decide either way.
How Bitcoin-backed loans work in Australia
You use BTC as loan security, and we lend you AUD against it. How much you can borrow depends on your loan-to-value ratio, or LVR, the size of your loan measured against the lender-assessed value of your security. For example, $100,000 worth of Bitcoin at 50% LVR could secure a $50,000 AUD loan.
Your crypto security is held in Fireblocks, which holds SOC 1 Type II and SOC 2 Type II certifications along with ISO 27001, 27017, 27018 and 22301. When you repay the principal, interest and fees and close the facility, your security is released back to you in full, including any price growth over the loan term.
Loans run from $50 to $5 million AUD, usually funded within 24 hours of approval, subject to eligibility and assessment.
Line of Credit
A 12-month facility for shorter-term cash needs. No monthly repayments are required and there's no lock-in period, so you can repay at any point in the term without an early repayment fee. Maximum LVR is 50% for BTC and WBTC. At the end of the 12 months you may have the option to roll the principal into a new facility, which means signing a new loan agreement at whatever rate and fees apply then.
Fixed Term
A three-to-five-year loan at a fixed interest rate, built for planned expenses rather than short-term gaps. Monthly repayments are required throughout the term. You can still repay early without a fee. Maximum LVR is also 50% for BTC and WBTC. Rollovers aren't available on Fixed Term loans.
What can you use a Bitcoin-backed loan for?
A Bitcoin-backed loan could unlock AUD for other opportunities while maintaining your exposure to Bitcoin's price movements.
Invest in other assets without selling Bitcoin
Looking to buy shares, ETFs, Gold or other investments? Rather than selling your Bitcoin to free up capital, you could borrow against it to fund your next investment.
This allows you to maintain your Bitcoin position while gaining exposure to other assets. However, borrowing to invest increases your financial risk, particularly if your Bitcoin security or your new investments fall in value.
Buy property or fund renovations
Your Bitcoin holdings could help you access AUD for a property deposit, renovations or other property-related expenses without selling your BTC. For homebuyers, Block Earner also offers a dedicated Bitcoin Home Loans solution in partnership with Century 21 Home Loans.
Fund a business opportunity
From purchasing equipment to expanding operations or managing cash flow, business owners can use Bitcoin-backed loans to access working capital while retaining their Bitcoin holdings.
Cover major expenses
Whether it's a significant purchase, an unexpected bill or a short-term cash requirement, borrowing against Bitcoin provides another way to access AUD without immediately selling your holdings.
The trade-off? You keep your Bitcoin exposure, but take on interest, fees and repayment obligations. If Bitcoin falls in value, you may also need to repay part of the loan or provide additional security.
What a Bitcoin-backed loan costs
A Line of Credit is priced at 9.50% p.a., a comparison rate of 11.93% p.a.^ It runs for 12 months, with no monthly repayments required and a maximum LVR of 50% on BTC and WBTC.
A Fixed Term loan is priced at 11.50% p.a., a comparison rate of 12.66% p.a.^, fixed for three to five years. Monthly repayments are required throughout the term, and the maximum LVR is also 50% on BTC and WBTC.
Both carry a 2% origination fee. Interest is calculated daily and compounded monthly on the principal, so voluntary repayments reduce the total interest you pay. If you redraw additional funds later, the 2% origination fee applies to the redraw amount.
Rates are indicative, subject to change, and depend on our assessment of your application. Refer to your loan agreement for the rates and fees that apply to your loan, and to our fees page for the current schedule.
What happens if Bitcoin's price falls
This is the part worth reading twice. If your security loses value, your LVR goes up, and past a certain point we'll ask you to act.
On a BTC or WBTC loan, anything under 55% LVR is healthy. Between 55% and 59.9% your loan moves to attention. From 60% to 64.9% you'll receive a repayment notice. Above 65% the loan is at default risk, and you'll have 30 days to manage it.
At default risk we issue a 30-Day Default Notice. You then have 30 days to repay part of the loan in AUD, sell part of your security to make a repayment, or deposit more crypto as security to bring the ratio back down. If the price recovers during that window and your LVR drops below the threshold on its own, nothing further is needed.
If the 30 days pass and the LVR is still at or above the threshold, we may sell a portion of your security to reduce it, in line with your loan terms.
Crypto prices move sharply, and a Bitcoin-backed loan isn't covered by the Australian government deposit guarantee. If you'd struggle to add security or make a repayment during a sharp fall, that's a real reason to think twice.
What happens if Bitcoin's price rises
The reverse also applies. If your security gains value, your LVR falls and you get more buffer between you and a repayment notice.
You may also be able to redraw. Say you hold a Fixed Term loan and your BTC security rises enough that your LVR drops to 30%. You could then apply to draw more AUD against that value, back up to your maximum available LVR, without selling anything. Redraws are subject to eligibility and approval, can take up to 24 hours to process, and attract the 2% origination fee.
You can also top up your security at any time to lower your LVR, whether or not you plan to redraw.
When selling might still make more sense
Borrowing isn't the right call for everyone. If you don't intend to hold Bitcoin for the long term, the loan is mostly adding interest and fees to a decision you've already made. If a sharp price fall would leave you unable to top up or repay within 30 days, selling is the simpler path. And if the amount you need is close to the full value of your holdings, a 50% LVR cap won't get you there.
Your timeframe, your tolerance for a margin call, and what else you could draw on all matter more than the headline rate.
Borrow against Bitcoin with Block Earner
Block Earner holds Australian Credit Licence 542689 and is registered with AUSTRAC as a Virtual Asset Service Provider and Independent Remittance Provider (100784590). We've been lending against crypto in Australia since 2021, with loan security held in Fireblocks custody.
Explore your borrowing options with Block Earner's Bitcoin-backed loan,, calculate how much AUD you could access, or speak with our team.
Frequently asked questions
Is borrowing against Bitcoin cheaper than selling it?
It depends on how long you borrow for. Selling costs 0.6% incl. GST in Sell Crypto Fees and nothing after that, but it ends your exposure to Bitcoin. Borrowing costs a 2% origination fee plus interest: 9.50% p.a. on a Line of Credit (11.93% p.a. comparison rate^) or 11.50% p.a. on a Fixed Term loan (12.66% p.a. comparison rate^), and you keep your Bitcoin. The longer you hold the loan, the more interest you pay. Borrowing also carries a risk selling doesn’t: if Bitcoin’s price falls far enough, you may need to make a repayment, top up your security, or have part of it sold.
How much can I borrow against my Bitcoin in Australia?
Loan amounts run from $50 to $5 million AUD, subject to eligibility, assessment and approval. The ceiling for any individual loan is set by your LVR, up to 50% of your lender-assessed security value for BTC and WBTC on both loan types. Most approved loans are funded within 24 hours.
What happens to my Bitcoin if I borrow against it and the price rises?
It stays held as loan security for the term of the loan. A higher price means a lower LVR, which gives you more buffer and may let you apply to redraw additional AUD. Once you repay the loan and close the facility, your security is released to you in full, including any growth over the period.
Can I get some of my Bitcoin back before the loan ends?
You may be able to withdraw part of your security, as long as the loan stays within the maximum LVR after the withdrawal. Any crypto still required as loan security can't be withdrawn or traded while the loan is active.
Disclaimer: The information contained in this blog is general in nature and is provided for informational purposes only. It does not constitute financial, legal, or tax advice, and should not be relied upon as such. Block Earner does not guarantee the accuracy or completeness of any information presented. You should consider your own personal circumstances and seek professional advice before making any financial or investment decisions. Past performance is not indicative of future results. All investments carry risk. Crypto-backed loans carry real risks. The value of your crypto can fall sharply, rapidly increasing your LVR and reducing any initial buffer. This may require you to add security or repay part of the loan and could result in some or all of your crypto being sold.
*Approved applicants only. Terms, conditions, fees and charges apply. *The rate provided above is indicative and your rate may be different based on a variety of factors, including your credit worthiness. Rates are subject to change. ^The comparison rates are based on a secured loan of $10,000 over a term of 3 years. The comparison rate provided includes a 2% origination fee. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Credit provided by Web3 Loans Pty Ltd ACN 668 516 952 and managed by Web3 Ventures Pty Ltd trading as Block Earner (ACN 655 090 869) under Australian Credit License 542689. *Capital is not covered by the Australian government deposit guarantee.
