The margin call is the one risk in a bitcoin-backed loan that has no equivalent in an ordinary loan, and it is the one most borrowers understand the least. A mortgage does not get margin-called when home prices dip; a bitcoin loan can, because your collateral trades 24/7 and can fall fast. Get the mechanics right and the risk is manageable. Get them wrong, or borrow at too high an LTV, and a bad week can force you to sell bitcoin at the worst possible price.
This guide explains exactly how a margin call and a liquidation work, the loan-to-value thresholds that trigger them, and the part almost nobody covers honestly: how the process differs from one lender to the next. The cure window, whether the lender sells a slice or everything, and the liquidation fee are not standardized, and those differences decide how a single rough week actually plays out. We are a comparison publisher, not a lender, so the per-lender facts below come straight from our database and link to each lender's review.
Why a falling bitcoin price puts your loan at risk
Start with the one relationship that drives everything: your loan amount is fixed, but your collateral's value is not.
When you borrow, the lender sets your loan-to-value, the loan divided by the value of your pledged bitcoin. Borrow $30,000 against $100,000 of bitcoin and you are at 30 percent LTV. Now suppose bitcoin falls. The loan is still $30,000, but the collateral might be worth only $50,000, so your LTV has jumped to 60 percent. You did nothing, but you are now far closer to trouble. That is the whole risk in one sentence: a falling price raises your LTV, and a high enough LTV triggers first a margin call, then a liquidation.
This is why the starting LTV matters so much. At 30 percent, bitcoin has to roughly halve before you approach a typical margin call. At 60 percent, a much smaller dip gets you there. The lower you start, the more cushion you have, and cushion is the entire game.
Margin call versus liquidation: not the same thing
These two words get used interchangeably, and that confusion is dangerous, because one is a warning and the other is the actual sale.
Price falls
Bitcoin drops; your loan is fixed, so LTV rises.
Warning
Some lenders flag a soft alert as you near the line.
Margin call
LTV crosses the threshold. The cure clock starts.
Cure window
Hours to act: add BTC, or repay part of the loan.
Liquidation
No action in time: the lender sells your collateral.
You cure in time
Add collateral or repay to push LTV back below the line, and the loan continues. Nothing is sold.
You do not
The lender sells collateral to restore the LTV, sometimes a slice, sometimes all of it, often at the worst price and with a fee.
A margin call is the lender telling you that your LTV has crossed a threshold and you have a set window to bring it back down, by adding bitcoin collateral or repaying part of the loan. Nothing has been sold. You are in control.
A liquidation is what happens if you do not cure the margin call in time: the lender sells your collateral for you to force the LTV back to a safe level. Now you are not in control, and you are selling into a falling market, usually with a fee on top.
The whole skill of borrowing safely is staying out of the margin-call zone, and, if you do get a call, curing it inside the window. Which raises the question of where those thresholds are and how long that window is, and that is where lenders diverge.
The thresholds that trigger it
Most lenders use a ladder of LTV levels, though they name and place them differently:
- Origination LTV is where your loan starts, often around 50 percent for bitcoin, sometimes higher.
- Warning LTV is a soft alert some lenders send as you climb, before any formal call.
- Margin call LTV is the threshold that starts the clock. Cross it and you must act within the cure window.
- Liquidation LTV is the hard ceiling. Reach it, or fail to cure the call, and the lender sells.
The gap between these levels, and the time you get between them, is the safety margin the lender is giving you. A lender that calls at 70 percent with a 72-hour window is far more forgiving in a crash than one that calls higher with no fixed window. None of this is standardized, so treat the specific numbers as something to verify per lender, not assume.
What actually happens in a liquidation
If a liquidation does fire, three details decide how much it hurts, and they vary by lender:
- Partial or full. Many lenders sell only enough bitcoin to bring your LTV back to a target (a partial liquidation), so you keep the rest of your stack and the loan continues on the remainder. Others close the entire position. Selling everything in a dip, rather than a slice, is a materially worse outcome, and it is a structural feature of some lenders, not a rare edge case.
- The fee. Most lenders charge a liquidation fee, and it ranges from nothing to several percent of the amount sold. That fee comes out of your collateral, on top of selling at a low price.
- The price. Liquidations happen in fast markets, so the execution price can be poor, and you have no say in the timing.
The takeaway is blunt: a liquidation is not just "you hit a number." It is a forced sale of your bitcoin, possibly all of it, at a price you did not choose, minus a fee. That is the event the rest of your decisions should be built to avoid.
How the process differs by lender
This is the comparison no single lender will publish, because a lender has no reason to line its margin-call terms up against its rivals. We do. Below is how each active lender we track handles the margin call and liquidation, the threshold, the cure window, the max LTV, and the liquidation fee, rendered live from our database and alphabetical, so no lender is ranked.
Lender facts on this page render live from our comparison database, last verified June 12, 2026. Figures refresh weekly; for the current set and your own loan size, see the comparison tool.
Max LTV
60.00%
Liquidation fee
Not posted
Margin call & liquidation
Maximum origination LTV 60 percent. Specific margin-call and liquidation LTV thresholds are not publicly posted.
Cure window
Not publicly posted. Ask the lender before you borrow.
Max LTV
60.00%
Liquidation fee
2.00%
Margin call & liquidation
Same liquidation mechanics as the Monthly Payment product, 24h cure window from margin call trigger.
Cure window
24 hours from margin call trigger to add collateral, repay principal, or request partial liquidation
Max LTV
60.00%
Liquidation fee
2.00%
Margin call & liquidation
Specific threshold not publicly posted
Cure window
24 hours from margin call trigger to add collateral, repay principal, or request partial liquidation
Max LTV
90.00%
Liquidation fee
0.00%
Margin call & liquidation
Liquidation LTV: 80-95% (borrower-chosen at origination; varies by collateral asset). Margin call LTV not separately specified publicly.
Cure window
Not publicly posted. Three-tier alert system (Safe Zone / Warning Zone / Margin Call Zone) with email/SMS notifications. Auto-top-up feature available.
Max LTV
75.00%
Liquidation fee
2.00%
Margin call & liquidation
Maximum initial LTV 75%. Specific margin-call and liquidation LTV thresholds for the Figure Markets product are not separately published; a 2% processing fee applies to any liquidated collateral.
Cure window
Not publicly posted. Ask the lender before you borrow.
Max LTV
50.00%
Liquidation fee
Not posted
Margin call & liquidation
A 70% LTV alert is a notification/reminder, not a formal margin call; liquidation triggers at 80% LTV. Initial LTV at origination: 50%. Thresholds visible at ledn.io/bitcoin-loan-calculator.
Cure window
No formal contractual cure window. Ledn states "typically there are no time windows to meet collateral calls." Auto-top-up feature provides alerts at 70% LTV but is not a contractual guarantee.
Max LTV
70.00%
Liquidation fee
5.00%
Margin call & liquidation
Four stages: (1) warning at 75% LTV; (2) formal margin call at 83.33% LTV with a 48-hour cure; (3) final notice at 88% LTV; (4) forced stabilization or liquidation at 90.91% LTV.
Cure window
48 hours to cure once formal margin call issued at 83.33% LTV. Must restore LTV to 70% or below.
Max LTV
50.00%
Liquidation fee
0.00%
Margin call & liquidation
Warning at 65% LTV. Margin call at 70% LTV, 72h cure to restore to 65% or below. Auto-partial-liquidation at 85% LTV (only enough BTC sold to restore to 65%). Note: 'volatility-proof' non-liquidating product is private client desk only.
Cure window
72 hours from margin call trigger (extended from 24h in February 2026). Must restore LTV to 65% or below. Auto-cancels if BTC price recovers within window.
Max LTV
50.00%
Liquidation fee
2.00%
Margin call & liquidation
CTP < 150% (LTV > 66.7%) triggers 24h margin call. CTP ≤ 120% (LTV ≥ 83.3%) triggers immediate hard liquidation with no additional cure. Max origination LTV is 40% (CTP 250%). BUSINESS ENTITIES ONLY, no sole proprietors.
Cure window
24 hours to cure CTP violation (for contracts post Feb 19, 2025). Options: add BTC collateral or repay principal to restore CTP above 150%. After cure window, foreclosure notice issued; liquidation is immediate and irreversible.
A few patterns are worth pulling out, because they are the differences that actually change your risk:
- Cure windows are not equal. They run from roughly a day to three days, and at least one major lender commits to no fixed window at all. A crash can happen overnight, so a longer, contractually defined window is real protection, not a detail.
- Partial beats full. A lender that sells only a slice to restore your LTV leaves you with bitcoin and a live loan. A lender that liquidates the whole position in a dip does not. Same trigger, very different damage.
- Fees vary widely. A liquidation fee of several percent, charged in the worst moment, is a meaningfully different deal from a lender that charges none.
- Some alert you early; some automate the fix. A few lenders offer early-warning tiers or automatic top-ups that defend your collateral before a human has to react. If you cannot watch the market closely, that is worth a lot.
Read the specifics in each lender's review, and treat the cure window and the partial-versus-full question as first-class decision factors, not fine print.
A worked example: the price that triggers your call
Concrete numbers make the cushion obvious. Say you borrow $25,000 against 1 bitcoin worth $100,000, so you start at 25 percent LTV. For a lender that issues a margin call at 70 percent LTV, the call fires when your collateral is worth about $25,000 / 0.70 ≈ $35,700, which is a bitcoin price near $35,700, roughly a 64 percent drop.
Now borrow $50,000 against that same bitcoin, starting at 50 percent LTV. The same 70 percent call now fires at about $50,000 / 0.70 ≈ $71,400, a drop of less than 30 percent. Same bitcoin, same lender, very different safety, purely because of the starting LTV. Model your own trigger price with the loan calculator and the liquidation price calculator before you borrow, not after.
How to avoid a margin call, or survive one
You cannot control bitcoin's price, but you control almost everything else:
- Borrow at a low LTV. This is the single biggest lever. A low starting LTV pushes the margin-call price far below today's, so a normal correction never reaches it.
- Keep reserve bitcoin ready. Collateral you can post quickly turns a margin call into a non-event. The whole point of the cure window is to use it.
- Use alerts and auto top-up. If your lender offers early warnings or automatic collateral top-ups, turn them on, especially if you cannot watch the market.
- Know your number and your window. Before borrowing, write down the price that triggers your call and how many hours you would have. If either makes you uncomfortable, borrow less.
- Do not borrow money you cannot afford to add to or repay. The cure window only helps if you actually have collateral or cash to deploy.
Curing a call is usually simple: add bitcoin or repay enough to push LTV back under the threshold, and the loan carries on as if nothing happened. The borrowers who get liquidated are almost always the ones who started at a high LTV, kept no reserves, and could not act inside the window.
If a margin call is your dealbreaker
For some borrowers, the forced-sale risk is simply not acceptable, and that is a legitimate position. A few products are built without a margin call, notably certain fixed bitcoin mortgages, which remove the liquidation mechanic in exchange for other tradeoffs like structure and cost. If avoiding a margin call entirely matters more to you than rate, compare those options directly rather than taking the cheapest loan and hoping the market cooperates. Liquidation is only one of the risks, too. The other big one is the lender itself, where your bitcoin is held and whether it is reused, which we cover in custody and rehypothecation. For how all the risks fit together, see are bitcoin loans safe?.
Paid downside-protection options
Short of avoiding a margin call entirely, a few lenders now offer opt-in features designed to soften or replace a forced liquidation. They are not free, and each has eligibility limits, so weigh the cost against the protection:
- Convert instead of sell (Stabilization). SALT's Stabilization replaces the all-or-nothing forced sale: when you breach the threshold, rather than selling your bitcoin and closing the loan, it converts the collateral into a stablecoin. That locks in the current dollar value and keeps the loan open, so the aim is to stop the loss without permanently selling at the bottom; if the market recovers, you can move back into bitcoin and carry the loan on rather than starting over. It is not free or automatic: it runs through your loan agreement, can carry a stabilization fee, and, like any lender commitment, it depends on SALT honoring it. SALT pairs it with an opt-in add-on, SALT Shield, that forbears margin calls and liquidation for the loan term, subject to a fee, a minimum loan size, and an LTV cap at enrollment.
- Similar products elsewhere. Strike has advertised a volatility-resistant, non-liquidating product, currently for private clients only, and comparable options are starting to appear from other lenders.
- No-margin-call structures. Some fixed bitcoin mortgages remove the price-driven margin call from the loan entirely, in exchange for structure, documentation, and cost tradeoffs.
None of these is a free lunch: you pay for the protection in fees, eligibility, or rate, and a paid forbearance still depends on the lender honoring it, which loops back to counterparty risk. But if your main fear is a forced sale at the bottom, they are a real option to compare, not just a lower LTV.
For the full picture of how bitcoin-backed loans work, see our main guide, and compare current lenders, including their margin-call terms, on our comparison tool.
This is not financial advice
borrow/on/bitcoin is a comparison publisher, not a lender, broker, or financial advisor. Bitcoin loans carry real risk, including the forced sale of your collateral in a margin call or liquidation. Thresholds, cure windows, and fees change and vary by lender and product, so verify the current terms directly with each lender, and model your own numbers, before you borrow.