Liquidium reports $100,000 in Bitcoin-backed loans through Simple Loans

Crypto lending platform Liquidium has reported two Bitcoin-backed loans totalling $100,000 in stablecoins through its Simple Loans service.

According to the announcement, the two borrowers used a combined 6 Bitcoin (BTC) as collateral to access funds without selling their holdings.

The first loan involved 2.7 BTC in collateral for a 45,000 USDT loan, while the second used 3.25 BTC to secure 55,000 USDC. USDT and USDC are stablecoins designed to maintain a value close to the US dollar.

The transactions illustrate how Bitcoin holders can use their cryptocurrency as collateral to access liquidity while retaining ownership of the underlying asset, provided they meet the loan conditions.

Liquidium says Simple Loans allows users to select their Bitcoin collateral, set a loan-to-value ratio (LTV) and receive funds without connecting a wallet. The announcement describes the process as simple and quick, although it does not provide details about processing times or the technical arrangements behind the service.

Bitcoin-backed borrowing carries risks. If the value of the collateral falls, borrowers may face margin calls or liquidation, depending on the loan terms. Interest rates, repayment periods, fees and liquidation thresholds are also important considerations before taking out a loan.

Users considering the service should review its full terms and understand the risks of using volatile cryptocurrency as collateral before borrowing.