Loan-to-value (LTV), explained

Loan-to-value, or LTV, is what you owe divided by what your collateral is worth. That one ratio sets how much you can borrow, the rate you pay and how far prices can fall before you have to act. Understand how it moves, and you can choose a level you will still be comfortable with on a bad day, not just on the day you borrow.

What loan-to-value means

LTV expresses your debt as a percentage of the current market value of the assets you pledged.

LTV = amount owed ÷ market value of the collateral × 100

Borrow €25,000 against bitcoin worth €50,000 and your LTV is 50%. With bitcoin at €73,814, that means pledging 0.6774 BTC. The same relationship works in both directions, which is how a loan simulator turns an amount into the collateral it requires:

Collateral needed = loan ÷ LTV
Maximum loan = collateral value × maximum LTV

Every lender sets a maximum LTV per asset. Ours is 60% for bitcoin, 50% for ether, 40% for Solana and 80% for USDT and USDC. The maximum applies on the day you borrow; it is a ceiling, not a level you are meant to stay at.

Three worked examples

Here is what three different loans require at today’s reference prices (04:58 UTC). The rate depends only on the asset and the loan-to-value you choose.

The stablecoin loan is the largest of the three, yet it needs the least collateral relative to its size: because USDC barely moves against the dollar, it can support a loan of up to 80% of its value, against 40% for a balanced ether loan.

What makes your LTV move

Your LTV is set by the numbers on the day you borrow. From then on, it changes whenever one of them does.

• The price of your collateral

  If bitcoin falls by 20%, an LTV of 50% becomes 62.5%. If it rises by 20%, it drops to 41.7%. This is by far the largest driver.

• The exchange rate

  Crypto is priced in US dollars. For a loan in euros, pounds or francs, a weaker dollar lowers the value of your collateral in your loan currency and raises your LTV, even if crypto prices do not move.

• Accrued interest

  If you let interest accrue rather than paying it monthly, what you owe grows every day: at 10.9% APR, an LTV of 50% becomes about 55.5% after twelve months at an unchanged price.

• Top-ups

  Adding collateral raises the denominator and lowers your LTV straight away. It is the usual answer to a margin call, and it can be done at any time.

• Repayments

  Repaying part of the loan lowers what you owe, and your LTV with it. There is no fee for repaying early, in full or in part.

• Rising prices

  When your collateral gains value, your LTV falls. If it falls well below your starting level, the client area lets you withdraw surplus collateral within the limits it shows.

The currency effect, in numbers

Take a loan in euros backed by USDC at 80% LTV. If the dollar weakens by 5% against the euro, your USDC is worth 5% less in euros and your LTV rises to 84.2% — past the 84% early-warning level for stablecoins. A fall of about 8% would reach the 87% margin-call level. A loan in US dollars against dollar stablecoins carries no such effect, which is worth considering if your spending is in dollars anyway.

The thresholds that matter

As your LTV rises, it crosses levels that trigger specific events. For bitcoin, ether and Solana:

1. < 65%Healthy. Nothing to do.
2. 65%Early warning in your client area.
3. 70%Margin call: 72 hours to top up or repay part, otherwise only enough is sold to return to 65%.
4. 80%Partial liquidation: only enough is sold to return to 65%.
5. 90%Full liquidation. Any surplus is returned to you.

Stablecoins move far less, so their levels sit higher and closer together:

Alerts appear in your client area and, if you enable them, as browser notifications. We never send emails or texts and never call, so those two channels are the only ones that reach you — see how we contact you. The full procedure is described in our LTV and margin-call policy.

From LTV to liquidation price

Because LTV and price move together, every threshold corresponds to a price of your collateral. The conversion is a single line:

Trigger price = current price × (your LTV ÷ trigger LTV)

With bitcoin at €73,814 and a loan at 50% LTV, a margin call would come at €52,725 and a partial liquidation at €46,134. Put differently, the price can fall by 1 − (your LTV ÷ trigger LTV) before each event: 28.6% before a margin call, 37.5% before a partial liquidation. Our guide to liquidation prices works through more cases, and the liquidation price calculator does it for your own numbers.

How far can the price fall?

The table shows, for bitcoin, ether and Solana, how far the price can fall from the day you borrow before each threshold is reached, assuming no top-up, no repayment and interest paid monthly. Under each LTV, the assets for which it is available.

For USDT and USDC, the same arithmetic gives smaller numbers, because the thresholds are closer: starting at 80%, a fall of 4.8% triggers the early warning and 8% the margin call; starting at 50%, it takes 43%. For a stablecoin, such moves would mean a loss of peg or a large currency swing rather than ordinary volatility.

How to choose your loan-to-value

There is no single right level, but there is a sensible way to choose one.

1. Start from the fall you want to sit through. To absorb a 40% fall without a margin call, you need to start at 42% or less (70% × 0.6). Bitcoin has fallen by more than that from previous peaks several times, sometimes within weeks.
2. Decide what you would do in a margin call. If you keep spare bitcoin or stablecoins that you could add within 72 hours, you can accept a higher LTV than if you could not.
3. Price the safety. Borrowing €25,000 at 30% instead of 50% means pledging €83,333 of bitcoin instead of €50,000, but the rate drops from 10.9% to 8.9% — €500 less interest a year — and the margin call moves from a 29% fall to a 57% fall.
4. Leave room for interest and currency. If you will let interest accrue, or borrow in a currency other than the dollar, start a little lower to keep the same cushion.

Five common mistakes

• Borrowing at the maximum on day one. The maximum leaves the smallest cushion: an ordinary week in the market can take you to a margin call.
• Forgetting the exchange rate. A loan in euros, pounds or francs against dollar-priced collateral carries currency risk on top of price risk.
• Letting interest accrue without watching. The debt grows every day, and so does your LTV, even in a flat market.
• Switching off notifications. Because we never email or call, the client area and browser notifications are the only ways an alert reaches you.
• Waiting for the end of the cure period. The 72 hours protect you from short swings, not from a continued fall: if the partial-liquidation level is reached in the meantime, it applies at once.