Bitcoin financial services platform Strike has launched a “volatility-proof” Bitcoin-backed loan that eliminates margin calls and forced liquidations amid the depths of a bear market, but only for those who can pay on time and handle a 14% interest rate.
In an announcement on Tuesday, Strike CEO Jack Mallers said the offering came in response to broad customer feedback on Strikes first Bitcoin loan product, which launched in May 2025 and triggered many liquidations during a timeframe in which Bitcoin (BTC) dropped 54% from peak to trough.
“No margin calls. No price liquidations. No matter how far bitcoin falls, your bitcoin doesn't move,” Strike CEO Jack Mallers said of the new Bitcoin loan product. The trade-off is an expensive interest rate, a shorter six-month loan term, and an obligation to pay on time to avoid liquidation, Mallers said.
Strikes Jack Mallers is presenting the new Bitcoin-backed loan product. Source: Jack Mallers
The Bitcoin industry has spent the better part of a decade racing to build financial products that expand Bitcoin's use case beyond a savings technology. A report in June from crypto lending platform Ledn, however, found that while 88% of surveyed crypto investors said they would consider a crypto-backed loan, only 14% use them.
Ledn said confidence in crypto-lending products and market volatility are among the main reasons for this 6-to-1 “crypto collateral gap” that has slowed adoption.
Volatility has been one of the biggest obstacles behind that push, with Bitcoin dropping 30% or more in 10 of the past 12 years, while also experiencing a 50% or more drawdown four times since 2014, Mallers noted.
Other crypto market participants offering Bitcoin-backed loans are Binance, Coinbase, Nexo and Xapo Bank.
Strike charges double-digit interest
The maximum initial loan-to-value ratio for the volatility-proof loans is 45%, meaning that a customer who puts up $100,000 in Bitcoin as collateral can borrow up to $45,000, while the annual percentage rate (APR) is also 2.95 percentage points higher than Strikes standard loan product.
“The secret sauce is that we‘re taking the extra charge that we’re giving you guys and were putting it on extra hedges in the market to protect all of us.”
Strikes standard Bitcoin loans charge an annual percentage rate between 7.75% and 11.25%, meaning the volatility-proof products could carry interest between 10.7% and 14.2%.
“If you're OK with a slightly shorter term and a little bit higher of a fee, there is no price move that can liquidate you,” Mallers said.
Over the past year, Bitcoin has fallen 54% from its all-time high of $126,080 in October to $58,190 on June 25.
Bitcoin investor Fred Krueger said the loan product “could eliminate one of Bitcoin's biggest structural problems: forced selling during market crashes.”
Instead of volatility causing automatic liquidations, defaults would be driven by borrowers' inability to service debt rather than by temporary price swings, he said.
Related: Coinbase rolls out UK crypto-backed loans as FCA shapes rules
“Great product for those who need near-term liquidity and dont want to risk liquidation,” added Vibes Capital Management executive chairman Rob Topping, though he also acknowledged the 14% APR was expensive.
Customers must pay up or face consequences
If a client misses a payment, they have 10 days to make the payment or contact Strike to explain their financial situation, Mallers said.
Failing to pay after that 10-day period may mean Strike starts liquidating their Bitcoin to cover the overdue amount, Mallers warned.
“If we don‘t hear from you for a few weeks, then I may have no choice but to sell off some of the Bitcoin because it seems like you’re doing a hit-and-run.”
“That‘s why we call it ’volatility-proof,‘ not ’liquidation-proof,” Mallers added.
The Bitcoin loans are offered in most US states and can be taken out in both personal and business names. They can be used for new loans, refinancing or consolidating.
While the minimum loan amount varies from state to state, the minimum loan offered through personal loans is $10,000, while businesses in certain states can access loans as low as $5,000.
