- Client: UK national and resident
- Loan Amount: Circa £600,000
- LTV: Circa 70%
- Security: Bitcoin portfolio
Enness was approached by a UK-based client looking to release approximately £600,000 against a Bitcoin portfolio held securely offline. The client wanted to access liquidity without selling their cryptocurrency holdings, allowing them to retain their underlying position while using part of its value for other financial purposes.
Cryptocurrency-backed lending is a specialist area of finance. Many traditional lenders do not accept digital assets as security, while the lenders that do operate in this market can have very different approaches to loan-to-value, pricing, custody and the structure of the facility.
The client’s circumstances therefore required a lender with an established appetite for cryptocurrency-backed lending and an understanding of the specific characteristics of Bitcoin as collateral. The fact that the assets were held offline also meant that the lender’s requirements around custody and the financing process needed to be considered carefully.
Enness approached specialist lending partners and negotiated a tailored fixed-term facility. The resulting terms provided approximately £600,000 of borrowing at around 70% LTV, allowing the client to access liquidity without having to sell their Bitcoin holdings.
The process moved quickly, with Enness progressing from the initial discussions to the formal lender introductions within a matter of days. This was particularly important given the specialist nature of the transaction and the need to coordinate the lending and digital asset requirements.
For the client, the facility provided an alternative to selling their cryptocurrency to generate liquidity. Instead, the Bitcoin could be used as collateral for the borrowing, subject to the agreed lending and custody arrangements.
The case highlights the specialist nature of crypto finance and why lender selection can be particularly important when borrowing against digital assets. Loan-to-value limits, valuation methodology, custody arrangements, margin requirements and the potential for cryptocurrency price movements can all affect the structure of a facility.
Enness also provides securities-backed lending solutions across a range of asset classes. The appropriate structure will depend on the type of assets being offered as security, the client’s circumstances and the requirements of the lender.
If you hold substantial cryptocurrency assets and are considering releasing liquidity without selling your holdings, speak to a Crypto Finance Specialist to discuss the potential options.
Important information:
Enness does not provide investment advice or recommendations on cryptocurrency or other digital assets. Cryptocurrency values can be highly volatile and may fall significantly. Crypto-backed borrowing can involve margin requirements and the potential for additional collateral or repayment if the value of the underlying assets falls. Lending terms, custody arrangements and availability are subject to lender criteria and individual circumstances.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
