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By Stephen Alpher, CoinDesk Bot|Edited by Aoyon Ashraf
Feb 20, 2025, 2:44 p.m. UTC
What to know:
- Onramp partnered with Arch to offer loans backed by bitcoin collateral.
- Service aims to provide liquidity while preserving BTC exposure.
- Borrowers can access funding without triggering taxable events.
Bitcoin financial services firm Onramp has partnered with lending platform Arch to introduce a bitcoin-backed lending service, the companies announced.
The new product allows BTC holders to secure loans while keeping ownership of their assets, a move aimed at investors looking to access liquidity without selling their bitcoin (BTC).
STORY CONTINUES BELOW
The service provides bitcoin-collateralized loans, allowing borrowers to use their holdings as security while receiving cash or stablecoins in return. By using bitcoin as collateral rather than selling it outright, borrowers can avoid capital gains taxes and maintain exposure to the asset’s potential price appreciation, according to the press release.
Lending partner Arch specializes in asset-backed loans and will handle the underwriting and loan distribution. Onramp, which focuses on bitcoin financial solutions, will integrate the service into its platform, making it accessible to users looking for an alternative to traditional financing.
Bitcoin-backed lending is gaining in popularity this cycle as an alternative to traditional loans, especially among long-term BTC holders who prefer to retain their assets. This model has been used in various financial applications, from personal liquidity needs to institutional financing strategies.
Read more: Coinbase to Offer Bitcoin-Backed Loans Through Morpho
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.
Stephen is CoinDesk’s managing editor for Markets. He previously served as managing editor at Seeking Alpha. A native of suburban Washington, D.C., Stephen went to the University of Pennsylvania’s Wharton School, majoring in finance. He holds BTC above CoinDesk’s disclosure threshold of $1,000.
“CoinDesk Bot” indicates a generative text tool, typically an AI chatbot, contributed to the article. In each and every case, the article was edited, fact-checked and published by a human. Read more about CoinDesk’s AI Policy here.
