Crypto Lending for HNWIs- What You Can (And Can't) Use as Security in 2025

Disclaimer: This article does not constitute financial advice and Enness do not give advice or recommendations on securities or crypto backing financing. We recommend seeking the advice of a wealth manager or professional adviser before investing in digital currencies.

 

For high-net-worth individuals (HNWIs), cryptocurrency is more than just a digital curiosity; it's a meaningful asset class. As digital assets mature, so does the infrastructure that allows you to leverage them. One of the most powerful tools in this space is crypto lending: unlocking liquidity without liquidating your holdings. If you're looking to raise capital from your crypto portfolio while continuing to hold for long-term upside, or you're simply not keen on triggering a tax event, crypto lending might be the correct route. However, not all crypto is equal in the eyes of lenders. Let's explore what you can (and can't) use as security in 2025, how to think about crypto-backed borrowing, and how Enness Global helps HNWIs navigate this complex but increasingly popular financing strategy.

What Is Crypto Lending?

Crypto lending involves using cryptocurrency holdings as collateral to access cash or fiat-equivalent liquidity without selling your digital assets. You essentially pledge your crypto to a lender in exchange for a loan, similar to how a property is used to back a mortgage.

For HNWIs, this can be particularly attractive because:

• You retain exposure to your assets' potential growth
• In certain jurisdictions, you may defer or avoid capital gains tax (though tax advice is essential)
• You can raise significant capital quickly without traditional underwriting barriers

That said, not all digital assets are considered equal in the lending world, and using crypto as security still comes with risk.

What You Can Use as Security in 2025

As of 2025, lenders have become more sophisticated but also more discerning when accepting crypto assets as collateral. Here's what's typically accepted:

Top 20 Cryptocurrencies by Market Capitalisation

Most lenders will only consider blue-chip tokens, think Bitcoin (BTC), Ethereum (ETH), and other top 20 coins by market cap. These assets are liquid, have deep trading markets, and are easier to custody securely. This makes them the preferred option for lending transactions.

Crypto Held in Trust or SPVs

If your crypto is held in a trust, foundation, or corporate structure, it may still be used as collateral, depending on how the ownership is structured and the jurisdiction in which the assets are held. You'll typically need enhanced documentation. This is particularly relevant for HNWIs who use wealth planning vehicles for tax and estate purposes.

Assets on Approved Custodial Platforms

Lenders approve specific regulated custodial platforms. These include exchanges or custodians that offer multi-sig wallets, insurance coverage, or cold storage options. If you're holding crypto with such providers, you're more likely to be eligible for lending. Lenders prefer assets held outside DeFi protocols, where counterparty risk and liquidity issues are more complex to quantify.

What You Can't Use as Security in 2025

While the crypto lending market is growing, certain asset types remain off-limits:

NFTs

Despite their buzz, non-fungible tokens (NFTs) are not viable collateral for most lenders. Their value is too volatile, illiquid, and subjective. Even high-value NFTs like CryptoPunks or Bored Apes typically can't be used to back a loan.

Staked or Locked Tokens

Crypto staked (e.g., for Ethereum validation) or locked-in yield protocols can't be used as collateral, as the lender cannot access the asset if needed. The inability to quickly liquidate the position makes it a non-starter for most traditional lenders.

Low-Liquidity, Micro-Cap Coins

While your portfolio may include promising altcoins, they'll almost certainly be excluded if they aren't within the top 20 (or sometimes 50). Low volume and price volatility make these coins too risky from a lender's perspective.

Key Risks and Considerations for Crypto Lending

Crypto lending can be highly effective but not without complexity and risk, especially for larger or multi-jurisdictional portfolios.

Margin Calls

Crypto's volatility means you may face a margin call if your collateral value drops. Most lenders require you to maintain a loan-to-value (LTV) ratio of around 50-70%. If prices dip and that ratio breaches, you must top up collateral or face liquidation.

A sudden market move could create severe pressure. For this reason, it's essential to borrow conservatively and work with lenders that offer clear liquidation protocols.

Tax Implications

Using crypto as security might help you avoid a taxable sale, but not always. Speak to a qualified tax adviser in your jurisdiction to understand the full implications. Some lenders also report activity to regulators, which could have tax or compliance consequences.

Custody and Security

One of the biggest concerns for HNWIs is where the crypto will be stored during the loan term. Some lenders require the crypto to be transferred to a custodial wallet they control, so ensure they offer multi-signature security and complete transparency.

How Enness Supports Crypto Lending for HNWIs

Crypto lending isn't just about knowing where to borrow; it's about understanding the fine print, avoiding common pitfalls, and getting terms that suit your broader wealth strategy.At Enness, we've facilitated numerous high-value crypto-backed loans and understand the intricacies of structuring these deals for HNWIs. Here's how we add value:

• End-to-End Expertise: From matching you with the right lender to helping manage the onboarding and compliance process, we'll guide you through every step.
• Tailored Strategy: We take time to understand your objectives, whether lifestyle funding, investment, or estate planning, and create a crypto lending strategy to match.
• Global Reach: With offices globally and global lender relationships, we can structure transactions across borders and time zones.
• Discreet, Instant Access: Our team is available to you directly, whether via email, call or WhatsApp, to answer any question or expedite the process.

Case Study: Capital Raise on Bitcoin Portfolio

Client Profile

• UK national and resident
• Held Bitcoin in cold storage
• Wanted to raise circa £500,000
• Target LTV: 50%

The Challenge

The client wanted to fund their retirement lifestyle without selling their Bitcoin. However, many traditional lenders wouldn't lend against crypto or offer extortionate interest rates. The client also required a secure lending structure, multi-sig wallet control and the ability to withdraw funds at will, with no lock-ins or cumbersome red tape.

The Solution

Enness negotiated a bespoke overdraft facility secured against the client's Bitcoin. The final offer included:

• £500,000 loan
• 50% LTV
• Competitive interest rate
• Fast execution: terms delivered in under a few days, funds available within the week

The client retained complete visibility over their assets, had peace of mind regarding custody, and got the liquidity they needed without sacrificing long-term upside.

Looking to Raise Capital Against Crypto in 2025?

The world of crypto lending continues to evolve, but navigating it requires more than knowing the latest coin prices. At Enness, we combine deep technical knowledge, extensive lender relationships, and an ultra-high-net-worth client service model to help you unlock the full potential of your digital assets. Whether you're based in London or beyond, if you're considering crypto lending, we'll ensure you have clarity, control and confidence at every step. 

Why Enness?

We specialise in arranging niche and large-ticket lending transactions for HNWIs. Our network of over 1000 global lenders mean we can often offer financing options that most brokers can't. If your situation is complex or your asset base includes crypto, we're perfectly placed to help structure a bespoke, fast, and efficient solution. Reach out to us today for a no-obligation discussion about your requirements.