Loan-to-Value (LTV) ratio is the single most important metric for anyone with a Bitcoin-backed loan. It determines how close you are to liquidation, what interest rates you qualify for, and how much additional borrowing power you have. Our LTV calculator gives you instant visibility into your loan health.
What Is LTV and Why It Matters
LTV (Loan-to-Value) is the ratio of your loan amount to the value of your collateral, expressed as a percentage.
**The formula**: LTV = (Loan Amount ÷ Collateral Value) × 100
For example, if you have a $50,000 loan backed by $100,000 worth of Bitcoin, your LTV is 50%.
**Why it matters**:
- **Liquidation risk**: Higher LTV = closer to liquidation threshold
- **Interest rates**: Many platforms offer better rates at lower LTV
- **Borrowing capacity**: Lower LTV means you could borrow more if needed
- **Peace of mind**: Knowing your LTV helps you sleep at night
Unlike traditional loans where LTV is set at origination, Bitcoin loan LTV fluctuates constantly with BTC price movements.
How Bitcoin Price Affects Your LTV
Your LTV moves inversely to Bitcoin's price:
**When BTC rises**: Your collateral is worth more, so your LTV decreases. A $100K loan with 2 BTC at $50K = 100% LTV. If BTC rises to $75K, your LTV drops to 67%.
**When BTC falls**: Your collateral is worth less, so your LTV increases. That same loan at $40K BTC = 125% LTV—you'd likely be liquidated.
This is why monitoring is critical. Bitcoin can move 10-20% in a single day, dramatically shifting your LTV and risk level.
Our calculator shows how different price scenarios affect your LTV, helping you prepare for volatility.
LTV Thresholds You Need to Know
Different LTV levels trigger different actions:
**Initial LTV (40-60%)**: Where most loans start. Lower initial LTV = more safety cushion.
**Margin Call LTV (60-75%)**: Many platforms warn you here, giving you time to add collateral or pay down the loan.
**Liquidation LTV (70-90%)**: Cross this line and your collateral is automatically sold. The exact threshold varies by platform.
**Safe Zone (<50% LTV)**: Generally considered low-risk. Bitcoin would need to drop 40%+ before you face margin calls.
**Danger Zone (>65% LTV)**: You're getting close to trouble. Consider taking action to reduce risk.
Our calculator color-codes your LTV so you instantly know where you stand.
Strategies for Managing Your LTV
Keeping your LTV healthy requires active management:
**Start conservative**: Begin with a 40-50% LTV rather than maxing out at 60-70%. The extra cushion could save your Bitcoin during a crash.
**Monitor continuously**: Don't check your loan once a month—Bitcoin's volatility demands more attention. Margin Watch monitors 24/7 so you don't have to.
**Set alerts at multiple levels**: Get warned at 55%, 60%, and 65% LTV so you have time to act.
**Keep reserves ready**: Have cash or additional Bitcoin available to add collateral if needed.
**Rebalance during pumps**: When Bitcoin rises significantly, consider withdrawing excess collateral or taking a slightly larger loan to put to work—but stay conservative.
LTV Across Different Platforms
LTV policies vary significantly by platform:
**Conservative platforms (Unchained, some DeFi)**: Max 50% LTV, liquidation at 70%. Lower borrowing power but more safety.
**Moderate platforms (Ledn, Nexo)**: Max 50-60% LTV, liquidation at 80-90%. Balance of access and safety.
**Aggressive platforms (some DeFi protocols)**: Up to 75% LTV available, tight liquidation thresholds. Higher risk.
When comparing platforms, don't just look at maximum LTV—consider the liquidation threshold and how much cushion you'll have. A platform offering 70% max LTV with liquidation at 75% is far riskier than one offering 50% max LTV with liquidation at 85%.
