How to Borrow Against Bitcoin, Ethereum& USDT in the UK (2025 Guide)
- November 27, 2025
One increasingly popular option is to borrow against crypto assets such as Bitcoin, Ethereum, or USDT (Tether). But how does it work, and what are the rules under UK regulation? Here’s a complete guide to help you understand the process, benefits, and risks of crypto-backed lending.
What Is a Crypto-Backed Loan?
A crypto-backed loan is a form of secured lending where you use your cryptocurrency holdings as collateral to access cash (usually GBP, stablecoins, or other fiat currencies).
You temporarily transfer your crypto to a secure digital wallet controlled by the lender or an independent custodian.
In exchange, you receive a loan worth a percentage of your crypto’s market value — typically 40–70% Loan-to-Value (LTV) depending on volatility and market conditions.
Once you repay the loan and interest, your crypto is returned in full.
Why Borrow Against Crypto Instead of Selling?
Many investors prefer borrowing against crypto rather than liquidating it because:
- Avoid triggering capital gains tax by not selling.
- Retain ownership of long-term investments while accessing short-term liquidity.
- Fast processing compared with traditional bank loans.
- Flexible repayment options, depending on lender.
It’s particularly useful for:
- Business owners managing cash flow.
- Investors who expect crypto values to rise.
- Individuals needing liquidity for high-value purchases or investments.
How It Works
- Collateral Deposit
You transfer your Bitcoin, Ethereum, or stablecoin (e.g. USDT) to a secure escrow or
cold-storage wallet. - Valuation & LTV
The lender values your crypto in real time and determines how much you can borrow. - Loan Agreement
You agree to terms (interest rate, duration, margin call conditions). - Funds Released
Cash (GBP) is transferred to your account — often within 24–48 hours. - Repayment & Release
You repay the principal plus interest; your crypto collateral is released.
- Collateral Deposit
FCA Regulation & Compliance in the UK
It’s important to note that crypto lending and crypto-backed loans are not fully regulated in the same way as traditional pawnbroking or consumer credit.
However, LoanAgainstAssets.co.uk operates under FCA regulation for asset-backed lending and strictly follows UK anti-money laundering (AML) and KYC requirements for any crypto-related transaction.
Here’s what that means in practice:
- Full identity verification and AML screening.
- Cold storage custody for collateral protection.
- Transparent loan terms with no hidden charges.
- FCA oversight of lending operations (for GBP loan side).
⚠️ Important: The FCA currently does not regulate crypto assets themselves, but any loan in GBP issued by an FCA-authorised company must still comply with all consumer protection and anti-fraud laws.
Risk Factors to Consider
Crypto-backed lending is innovative — but it carries additional risks you should understand:
- Market volatility: If crypto prices fall significantly, lenders may issue a margin call,
requiring you to top up collateral or risk liquidation. - Regulatory uncertainty: The FCA continues to review how digital assets are treated
in the UK financial system. - Custody risk: Always ensure your crypto is stored with an insured, reputable
custodian. - Interest rate variation: Rates are generally higher than traditional secured lending
due to volatility risk.
- Market volatility: If crypto prices fall significantly, lenders may issue a margin call,
At LoanAgainstAssets.co.uk, client security, transparency, and compliance come first. We only facilitate loans backed by properly verified assets through FCA-approved structures.
What Assets Are Accepted?
Most UK lenders offering crypto-backed loans support:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Occasionally, other high-cap digital assets with strong liquidity (e.g. USDC).
We recommend using only mainstream cryptocurrencies with verified on-chain data and stable market value.
Typical Use Cases
Use Case | Description | |
| Short-Term Cash Flow | Borrow cash without selling crypto during a dip. | |
| Business Funding | Unlock liquidity for operations or trading. | |
| Real Estate Deposits | Use crypto as collateral while maintaining exposure. | |
| Debt Consolidation | Replace expensive unsecured debt with lower-cost, asset-backed finance. |
Example Scenario
Alex, a London-based investor, owns £100,000 worth of Bitcoin.
Rather than selling, he pledges £50,000 worth as collateral for a £25,000 GBP loan (50% LTV).
He uses the funds for a business investment and repays after six months — retaining all his Bitcoin exposure throughout.
Borrowing Against Crypto Responsibly
Before proceeding with any crypto-secured loan:
- Use only FCA-authorised lenders for GBP disbursements.
- Confirm the custody and insurance arrangements for your collateral.
- Understand margin call triggers.
- Avoid borrowing more than you can comfortably repay.
As an FCA-regulated UK pawnbroker and asset lender, LoanAgainstAssets.co.uk applies the same due diligence, compliance, and customer care standards to crypto as to all physical assets.
The Bottom Line
Borrowing against Bitcoin, Ethereum, or USDT offers an innovative way to access cash while keeping your investment intact.
However, it’s essential to work only with regulated, transparent, and security-focused lenders.
At LoanAgainstAssets.co.uk, our priority is safety, compliance, and client confidence. We combine traditional FCA-regulated lending with modern asset flexibility — helping clients unlock liquidity across both tangible and digital assets.
Looking to Borrow Against Bitcoin or Crypto Assets?
Get fast, confidential access to funding while keeping your crypto investments intact.