As Bitcoin’s influence expands, its role as collateral is gaining recognition. More holders are seeking liquidity without selling, using Bitcoin to fund investments, buy real estate, or pay off debt. But with increasing options comes a crucial question: who can you trust to lend against your Bitcoin securely?
Since 2015, SALT Lending has pioneered the Bitcoin-backed lending market. Founder Shawn Owen started the company after banks repeatedly rejected Bitcoin as collateral. Having navigated multiple market cycles, SEC regulatory challenges, and the 2022 industry turmoil (FTX, Celsius collapse), SALT operates in nearly all 50 U.S. states and over a dozen global jurisdictions. Below are the five key factors it recommends for selecting a lender.
1. Proven Expertise You Can Trust
Nothing replaces experience. Given the failures of Celsius, BlockFi, Terra Luna, and FTX, it’s critical to choose a lender with a proven track record. Experience ensures robust systems, knowledgeable professionals, and understanding of volatile market intricacies. In a landscape of short-lived projects, experience is the most reliable indicator of success.
2. Trust & Transparency
Trust is non-negotiable. Lenders must offer enterprise-grade custody using Multi-Party Computation (MPC) and Multisig technologies. Key requirements: the lender never re-hypothecates your collateral; provides nine-figure insurance policies against loss, theft, and hacks; and is legally compliant with BSA, KYC, and AML regulations in its jurisdictions.
3. Tools, Technology & Resources
A quality lender provides education, expertise, and tools to help borrowers make strategic decisions. Look for advanced mobile apps and borrower portals, LTV monitoring and alerting systems, seamless collateral movement, and easy refinancing options. Leading lenders continuously innovate to empower Bitcoiners.
4. Flexible Loan Terms
Every borrower’s situation is unique. The best lenders tailor solutions: no constraints on pre-payment, multiple payment options, and easy refinancing. Experienced lenders develop efficient automated processes with custody and capital providers, offering a broader range of terms without operational risks.
5. Competitive Interest Rates
Experienced lenders secure low-cost capital by streamlining custody and collateral management. Efficient risk management allows lower rates for lower LTV ratios, longer terms, and upfront interest payment. The best lenders balance competitive rates with flexible terms to ensure borrowers get optimal deals.
Choosing a Bitcoin-backed lender is a major financial decision. By prioritizing experience, trust, transparency, technology, flexibility, and competitive rates, you can partner with a reliable, battle-tested provider. SALT Lending remains at the forefront, offering secure and innovative solutions worldwide.