Calculate your Bitcoin loan terms, LTV ratios, interest costs, and liquidation risks.
A Bitcoin loan calculator helps you understand the financial implications of borrowing against your Bitcoin before you commit. Calculate LTV ratios, interest costs over time, liquidation risk scenarios, and optimal loan amounts based on your goals and risk tolerance.
Understanding LTV Calculations
Loan-to-Value (LTV) is the fundamental metric for Bitcoin loans. The formula is: LTV = (Loan Amount / Collateral Value) × 100. For example, if you borrow $5,000 against $10,000 worth of Bitcoin: LTV = ($5,000 / $10,000) × 100 = 50%. Your LTV changes as Bitcoin's price fluctuates. If Bitcoin drops to $8,000, your LTV increases to 62.5% ($5,000 / $8,000 × 100). If Bitcoin rises to $15,000, your LTV decreases to 33.3% ($5,000 / $15,000 × 100). Understanding this relationship is critical - as Bitcoin's price drops, your LTV rises, moving you closer to liquidation. Additionally, as interest accrues, your loan amount increases, also raising your LTV even if Bitcoin's price stays constant. A good Bitcoin loan calculator should allow you to input various Bitcoin prices to see how your LTV would change, helping you understand your risk exposure.
Calculating Interest Costs
Interest costs significantly impact the total cost of your Bitcoin loan. The basic formula is: Interest = Principal × Annual Rate × (Time / 365 days). For example, borrowing $10,000 at 8% APR for 180 days: Interest = $10,000 × 0.08 × (180/365) = $394.52. However, most platforms use compound interest (typically daily compounding), which means interest accrues on previously accrued interest. The compound interest formula is: Total Amount = Principal × (1 + Annual Rate/365)^(Days). Using the same example with daily compounding: Total Amount = $10,000 × (1 + 0.08/365)^180 = $10,399.45, so interest = $399.45. The difference may seem small for short periods, but compounds significantly over time. Your calculator should also account for: (1) Platform fees (origination, withdrawal, monthly fees), (2) Liquidation fees if applicable, (3) Opportunity costs (what could you have earned on your Bitcoin or the borrowed funds), and (4) Variable rates that change over the loan period.
Liquidation Risk Scenarios
Understanding when you'd be liquidated is crucial for risk management. The liquidation price formula is: Liquidation Price = (Loan Amount / Bitcoin Amount) / Liquidation LTV. For example, if you borrowed $7,000 with 0.15 BTC as collateral and your liquidation LTV is 75%: Liquidation Price = ($7,000 / 0.15) / 0.75 = $62,222. If Bitcoin drops to $62,222, you'll be liquidated. A good calculator lets you model various scenarios: (1) Current situation - what's your current LTV and liquidation price? (2) Bear market scenarios - what if Bitcoin drops 15%, 30%, or 50%? What would your LTV be? (3) Time scenarios - how does interest accumulation affect your LTV over 30, 90, or 180 days? (4) Margin of safety - how far is Bitcoin's current price from your liquidation price? This percentage buffer indicates your safety margin. Margin Watch provides a 14-day risk outlook feature that automatically calculates these scenarios, showing your LTV under Big Bear (-30%), Bear (-15%), and Current Market conditions.
Optimal Loan Amount Calculation
Determining how much to borrow requires balancing your liquidity needs with risk tolerance. Considerations include: (1) Maximum LTV available - platforms typically offer 50-70% LTV, but borrowing the maximum is risky. (2) Comfortable LTV - most experienced borrowers stay at 30-50% LTV to provide substantial buffer against volatility. (3) Your Bitcoin outlook - if you're very confident Bitcoin will appreciate or remain stable, you might accept higher LTV. If you're uncertain or bearish, use lower LTV. (4) Loan purpose - short-term liquidity needs might justify slightly higher LTV; long-term loans should use conservative LTV. (5) Monitoring capability - if you can actively monitor and respond quickly, slightly higher LTV is manageable; if you need a "set it and forget it" approach, use very conservative LTV. A calculator should let you input your desired safety margin (e.g., "I want to survive a 40% Bitcoin drop without liquidation") and calculate the maximum loan amount that provides that buffer.
Comparing Multiple Platforms
A comprehensive calculator should allow platform comparisons. Key comparison factors: (1) Interest rates - calculate total interest paid over your intended loan period for each platform, (2) Fees - include all fees (origination, monthly, withdrawal, liquidation) to determine true cost, (3) LTV ratios - higher maximum LTV provides more borrowing power but may indicate higher risk tolerance, (4) Liquidation thresholds - more generous thresholds (higher percentages before liquidation) provide more safety, (5) Compounding frequency - daily vs monthly compounding affects total interest, (6) Additional features - some platforms pay interest on your collateral, effectively reducing your net borrowing cost. Example comparison: Platform A offers 7% APR with 50% max LTV and liquidation at 75% LTV. Platform B offers 9% APR with 60% max LTV and liquidation at 80% LTV. For a 180-day, $10,000 loan against $20,000 Bitcoin: Platform A costs $344 interest with liquidation at $66,667 Bitcoin price. Platform B costs $443 interest with liquidation at $62,500 Bitcoin price. Platform A is cheaper but more conservative; Platform B allows more leverage but costs more and liquidates at a higher Bitcoin price.
Using Margin Watch's Calculator Features
Margin Watch provides advanced calculator features integrated with real-time monitoring: (1) Live LTV tracking - automatically calculates your current LTV based on real-time Bitcoin prices, no manual inputs needed, (2) 14-day risk outlook - shows your projected LTV under three scenarios: Big Bear Market (-30% Bitcoin price), Bear Market (-15%), and Current Market (stable), helping you visualize your risk, (3) Multi-loan tracking - if you have Bitcoin loans on multiple platforms, Margin Watch tracks all simultaneously and provides combined risk analysis, (4) Liquidation price alerts - automatically calculates your liquidation price and shows your margin of safety as both a dollar amount and percentage, (5) Historical tracking - see how your LTV has changed over time to understand patterns and risks, (6) Alert thresholds - set custom LTV thresholds (e.g., alert at 60%, 65%, 70%) and receive immediate email notifications, and (7) What-if scenarios - model adding collateral or making payments to see immediate impact on your LTV and risk profile. These features transform a static calculator into a dynamic risk management system that works 24/7 to protect your collateral.
Calculate Your Liquidation Price
Use our free Bitcoin liquidation calculator to see your exact risk level and liquidation price based on your loan details. Includes bear market scenarios and safety margin analysis.
Open Calculator →Protect Your Bitcoin Loan with Margin Watch
Don't just learn about loan risks - actively monitor and prevent them. Margin Watch tracks your LTV 24/7, sends instant alerts, and provides 14-day risk outlooks.
Frequently Asked Questions
What is a safe LTV ratio for Bitcoin loans?
Most experts recommend keeping your LTV at 50% or below, with 30-40% being ideal for conservative borrowers. This provides substantial buffer against Bitcoin's volatility - even a 30% Bitcoin price drop from 50% LTV would only bring you to about 71% LTV, still below most liquidation thresholds. However, "safe" depends on your circumstances: your risk tolerance, ability to add collateral quickly, Bitcoin price outlook, loan duration (shorter = less interest accumulation = safer), and monitoring capabilities. If you can actively monitor your loan daily and respond within hours to add collateral, you might accept 55-60% LTV. If you need a hands-off approach, stay at 40% or below.
How do I calculate the Bitcoin price that would liquidate me?
Formula: Liquidation Price = (Loan Amount / Bitcoin Amount) / Liquidation LTV. Example: You borrowed $10,000 using 0.2 BTC as collateral, and your liquidation LTV is 75%. Liquidation Price = ($10,000 / 0.2) / 0.75 = $66,667. If Bitcoin drops to $66,667, you'll be liquidated. To build in safety margin, calculate at a lower LTV - e.g., at 70% instead of the 75% liquidation threshold - to see when you'd receive margin calls. Margin Watch automatically calculates your liquidation price in real-time and updates it as interest accrues or Bitcoin's price changes.
Should I factor in Bitcoin appreciation when calculating loan costs?
Yes, Bitcoin appreciation is a key factor in loan economics. If you borrow $10,000 at 8% APR for a year (cost: $800) but your Bitcoin collateral appreciates 20% (gain: potentially $2,000+ on a $10,000+ collateral), your net position is positive despite the interest cost. This is why many Bitcoin holders prefer loans over selling - they believe Bitcoin appreciation will exceed interest costs. However, don't count on appreciation in your risk calculations. Calculate your liquidation risk based on Bitcoin dropping, not rising. Factor Bitcoin appreciation into the opportunity analysis (should I take this loan?), but factor Bitcoin depreciation into risk management (how do I protect my collateral?).
Do loan calculators account for interest accumulation increasing LTV?
Basic calculators may not, but sophisticated ones should. As interest accrues, your loan balance increases, which increases your LTV even if Bitcoin's price stays perfectly stable. Over a 365-day loan at 8% APR, your loan balance increases by 8%, meaning your LTV also increases by 8% relative to where you started. For example, starting at 50% LTV, after one year with 8% interest and stable Bitcoin price, you'd be at 54% LTV. This gradual LTV increase is why long-term Bitcoin loans require extra caution and why you should periodically make payments or add collateral to maintain your target LTV. Margin Watch factors in interest accumulation when calculating your risk profile.
Can calculators help me decide between CeFi and DeFi platforms?
Yes, by comparing total costs including all variables. Input the same loan amount and term into both CeFi and DeFi calculations. For CeFi: add the interest (typically fixed rate) plus any monthly fees. For DeFi: add estimated interest (use average of variable rate range) plus all gas fees for transactions (depositing collateral, borrowing, repaying - typically 3-5 transactions × $30-$100 each depending on network congestion). For a $10,000 loan over 180 days: CeFi at 8% fixed = $394 interest + $0 fees = $394 total. DeFi at 5% variable (average) = $246 interest + $200 gas fees = $446 total. In this case, CeFi is cheaper despite higher rates. However, for a $50,000 loan: CeFi = $1,970 total; DeFi = $1,430 total. DeFi becomes more attractive for larger loans where gas fees are a smaller percentage of the total.
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