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Onramp and Arch Launch Bitcoin-Backed Lending Service
The new lending product allows Bitcoin holders to access liquidity without selling their assets.
Updated Feb 20, 2025, 2:44 p.m. Published Feb 20, 2025, 2:44 p.m.
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 .
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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.
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