[DigitalToday reporter Yoonseo Lee] Bitcoin financial services platform Strike has launched a bitcoin-backed loan product that does not trigger margin calls or price-based forced liquidation even if bitcoin prices fall sharply.

Cointelegraph reported on July 8 that the product reduces the risk of collateral liquidation in bear markets, but attaches interest rates as high as 14.2 percent and strict repayment conditions.

Strike CEO Jack Mallers (잭 말러스) said the new product reflects customer reaction to the company’s first bitcoin loan product launched in May 2025. At the time, many liquidations occurred as bitcoin fell 54 percent from a peak to a trough, and users asked for a structure that would allow them to keep their collateral even during sharp price drops.

The key feature of the new product is that the collateral bitcoin does not automatically move and is not liquidated solely due to a price fall, regardless of how far bitcoin drops. Mallers said, "No margin calls. No price based liquidations. Your bitcoin doesn't move no matter how far bitcoin drops." He added that the trade-off is high interest rates, a short six-month maturity and an obligation to repay by the due date.

The loan terms are also designed conservatively. The initial maximum loan-to-value ratio is 45 percent. Depositing $100,000 in bitcoin as collateral allows borrowing up to $45,000. The annual interest rate is 2.95 percentage points higher than Strike’s existing bitcoin loans. The existing product carried annual rates of 7.75 to 11.25 percent, while the new product could be 10.7 to 14.2 percent.

The market focused on the structure’s reduced risk of forced selling. Bitcoin investor Fred Krueger said the product "can eliminate forced selling, one of bitcoin’s biggest structural problems that occurs during market crashes." He pointed out that instead of automatic liquidation due to price fluctuations, the borrower’s ability to repay becomes the structure that determines whether there is an actual default.

Vibes Capital Management chairman Rob Topping also saw it as a suitable product for users who need short-term liquidity, but mentioned that an annual rate around 14 percent is expensive.

The product is resilient to price fluctuations, but it does not eliminate delinquency risk. If a customer misses a repayment date, the customer must pay within 10 days or contact Strike to explain financial circumstances. If repayment is still not made after that period, Strike may liquidate the collateral bitcoin to cover the overdue amount. Mallers said, "We call this product 'volatility protection' not 'liquidation protection.'"

This structure also touches on trust issues in the crypto-backed lending market. Ledn said in a June report that 88 percent of survey respondents said they could consider crypto-backed loans, but it counted actual users at only 14 percent. Ledn said market volatility and a lack of trust in products were key factors behind the gap.

Bitcoin price volatility has been cited as a factor that blocks an expansion in actual loan demand. Mallers said bitcoin fell more than 30 percent in 10 of the past 12 years, and there were also four declines exceeding 50 percent since 2014. Over the past year alone, bitcoin fell 54 percent from an all-time high of $126,080 in October 2025 to $58,190 at the end of June.

Strike’s bitcoin-backed loans are available to individuals and corporations in most U.S. states. They can be used not only for new loans but also for refinancing or debt consolidation. Minimum loan amounts vary by state, but personal loans are available from $10,000. Corporate customers in some states can use the product from $5,000.

Binance, Coinbase, Nexo and Xapo Bank also participate in the bitcoin-backed lending market. Strike has sought to differentiate itself by changing its product structure to reduce the burden of forced liquidation during sharp price drops. Still, whether usage actually expands depends on how much the market accepts the high interest rates and repayment discipline.

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