Key Takeaways
Strike's new Bitcoin-backed loan product eliminates price-based liquidations entirely, letting borrowers ride out any BTC price decline as long as they keep making payments.
Strike, the Bitcoin payments company led by Jack Mallers, on July 7 launched a "volatility-proof" Bitcoin-backed lending product that eliminates margin calls and price-triggered liquidations, backed by a $2.1 billion credit facility. The loans, developed in collaboration with Tether, allow borrowers to post Bitcoin as collateral without fear of forced liquidation if the price drops, provided they stay current on payments.
"No margin calls. No price liquidations. No matter how far bitcoin falls, your bitcoin doesn't move," Mallers, Strike's founder and chief executive officer, said in a post on X. "Volatility is inevitable. Liquidation isn't. Borrow dollars. Keep the bitcoin."
The product departs from traditional crypto lending by removing loan-to-value ratio triggers entirely. Borrowers face partial liquidation only if they miss an interest or maturity payment and fail to cure within a 10-day grace period. The trade-off comes in tighter terms: a maximum 45 percent initial LTV, compared with 50 percent on Strike's standard loans, a six-month term cap versus 12 months, and an additional 2.95 percent APR premium. Strike charges zero origination, prepayment, or liquidation fees on both the new and standard products. The loans are available as term loans in select U.S. states, excluding lines of credit.
The launch addresses a structural weakness exposed during the 2022 bear market, when cascading liquidations on platforms such as Celsius, BlockFi, and Voyager turned price corrections into solvency crises. By removing the liquidation trigger, Strike shifts the lender's risk assessment from Bitcoin's intraday volatility to borrower creditworthiness. Bitcoin traded around $63,000 at the time of the announcement, after weeks of decline that left roughly half the circulating supply underwater, according to The Block's data.
How the product changes the lending math
The 45 percent LTV ceiling means borrowers must post roughly $2.22 in Bitcoin for every $1 borrowed, creating a larger collateral cushion than standard crypto loans. The 2.95 percent APR premium represents the explicit cost of liquidation protection, on top of whatever base rate Strike charges. For a borrower taking a six-month term loan, the premium adds a measurable but capped expense in exchange for eliminating the tail risk of forced liquidation during a sharp drawdown.
Strike's $2.1 billion credit facility signals institutional confidence in the product's risk model. The company spent much of 2025 building its lending infrastructure, including partnerships and the credit line, to support what Mallers has described as a fundamental rethinking of how Bitcoin collateral should work.
What this means for Bitcoin-backed lending
The product could pressure competitors to innovate. Traditional crypto lenders have relied on LTV-based liquidation mechanisms that, during the 2022 downturn, triggered forced selling at the worst possible prices, amplifying the selloff. If Strike's model proves scalable, it may set a new standard for how Bitcoin-backed loans are structured, potentially expanding the addressable market for borrowers who previously avoided crypto lending due to liquidation risk.
Prediction market participants have taken note. On Polymarket, the probability of STRC hitting $100 by Dec. 31 stood at 54.5 percent YES as of July 7, down from 57 percent the prior day but up from 38 percent a week earlier, according to market data. The September 30 sub-market showed a 32.5 percent YES probability, reflecting varied expectations about the product's near-term impact on Bitcoin financial services.
This article is for informational purposes only and does not constitute investment advice.
