Strike Launches Bitcoin Loan Product That Protects Holdings Even if BTC Price Crashes

On Tuesday, Strike launched a new Bitcoin loan product that would protect borrowers from forced liquidations during market downturns.

According to the company, customers using the new service will not face margin calls or automatic liquidations simply because Bitcoin's price drops.

The launch comes after many customers faced liquidations using Strike's former lending system, which was launched in 2025. This was before the Bitcoin bear market started in October.

Strike removes one of crypto's biggest risks

The company’s CEO, Jack Mallers, made a presentation on his X page, sharing details of the new product/ Mallers highlighted how volatile the market has become and emphasized the need to provide solutions for its customers.

“Bitcoin doesn't move in a straight line. Obviously, over the long term, it tends to go way up and to the right,” he said.  Introducing volatility-proof loans, a Bitcoin-backed loan that a price move can never trigger liquidation of your collateral.”

Traditional crypto-backed loans usually require borrowers to maintain a level of collateral. If the value of said collateral falls too much, lenders can sell part of it to reduce risk. That has been a major concern for investors.

Over the past year alone, Bitcoin fell by 54%, dropping from its all-time high of $126,080 in October to around $58,190 in June. This led to waves of liquidations in the crypto lending space.

Strike's new Bitcoin loan offering helps eliminate that risk. The company used additional market hedges to protect itself against price swings. Borrowers would have to pay higher interest rates in exchange for that protection.

The loans offer a maximum 45% loan-to-value ratio. This essentially means someone who deposits $100,000 worth of Bitcoin can borrow up to $45,000. 

The minimum personal loan amount starts at $10,000, while some businesses may qualify for loans starting at $5,000, depending on other factors.

What investors must take note of

The company would charge a higher APR than its standard lending products for this extra protection. Strike's normal loans carry interest rates between 7.75% and 11.25%. The new Bitcoin loan option adds 2.95 percentage points, pushing it to 10.7% to 14.2% APR.

Mallers said that the additional fees are used to purchase hedging strategies that protect both borrowers and the company from volatility.

Bitcoin has seen declines of 30% or more in 10 of the last 12 years. It has also gone through drawdowns of at least 50% on four occasions since 2014. Those declines have often forced borrowers to sell their assets at the worst possible time.

Experts say this new model could help solve that problem. They highlighted that the product could remove one of the biggest structural weaknesses in crypto lending by reducing forced selling during market crashes.

Strike’s CEO also shared that customers must keep their payments on schedule. If a payment is missed, borrowers have 10 days to either catch up or contact the company to discuss their situation.

“If we don’t hear from you for a few weeks, then I may have no choice but to sell off some of the Bitcoin because it seems like you’re doing a hit-and-run,” Mallers said.