Strike has introduced a new Bitcoin backed lending product designed to eliminate one of the biggest risks facing crypto borrowers: forced liquidations caused by sharp price declines.
The Bitcoin financial services platform, led by CEO Jack Mallers, unveiled what it calls “volatility proof” Bitcoin loans, a product that removes margin calls and price based liquidations as long as borrowers continue making scheduled payments. The launch follows criticism of Strike’s original Bitcoin lending product introduced in May 2025, which saw many customers liquidated during Bitcoin’s 54% decline from its all time high to its recent lows.
The new offering aims to address that weakness while giving Bitcoin holders access to liquidity without being forced to sell their assets during market downturns.
Key Takeaways
- Strike has launched a Bitcoin backed loan product that removes margin calls and price triggered liquidations.
- Borrowers can keep their Bitcoin collateral regardless of market volatility, provided they remain current on loan payments.
- The product carries a higher annual percentage rate of 10.7% to 14.2% and limits borrowing to a 45% loan to value ratio.
- Missed payments can still result in collateral liquidation after a 10 day grace period.
- The launch comes after Strike’s first lending product triggered widespread liquidations during Bitcoin’s recent bear market.
A Different Approach to Bitcoin Lending
Traditional crypto backed loans typically require borrowers to maintain a minimum collateral ratio. If Bitcoin falls sharply, lenders can issue margin calls or automatically liquidate part of the collateral to reduce their exposure.
Strike’s latest product removes those triggers entirely.
Announcing the launch, Mallers emphasized that market volatility alone will no longer force customers to lose their Bitcoin.
“No margin calls. No price liquidations. No matter how far bitcoin falls, your bitcoin doesn’t move.”
Instead of responding to price movements, the loan remains active regardless of Bitcoin’s market value, provided borrowers continue meeting their repayment obligations.
The company developed the product after listening to customer feedback following the performance of its first Bitcoin lending program during the recent market downturn.
Protection Comes With Higher Borrowing Costs
The additional protection is not free. Strike’s volatility proof loans carry annual percentage rates ranging from 10.7% to 14.2%, compared with 7.75% to 11.25% for the company’s standard Bitcoin backed loans.
Mallers explained that the higher interest rate funds additional market hedging strategies designed to protect both the company and its customers from large price swings.
“The secret sauce is that we’re taking the extra charge and putting it on extra hedges in the market to protect all of us.”
Borrowers also face a lower maximum loan to value ratio. Customers can borrow up to 45% of the value of their Bitcoin collateral, meaning someone pledging $100,000 worth of Bitcoin can access a maximum loan of $45,000. Loan terms are limited to six months, making them shorter than Strike’s standard lending products. Missed payments still carry consequences.
While Bitcoin price declines will not trigger liquidation, failing to make payments remains a risk.
Strike gives borrowers a 10 day grace period after a missed payment to either catch up or contact the company to discuss their financial situation. If no payment or communication follows, Strike may begin selling part of the Bitcoin collateral to recover overdue amounts.
Mallers stressed that the distinction is intentional.
“That’s why we call it ‘volatility proof,’ not ‘liquidation proof.'”
The product shifts the primary risk from market volatility to borrower repayment.
Industry Reaction Highlights Benefits and Trade Offs
The launch has generated mixed reactions from industry participants. Bitcoin investor Fred Krueger argued that removing automatic liquidations could reduce one of Bitcoin’s biggest structural weaknesses during market crashes.
Instead of temporary price declines forcing widespread selling, defaults would occur only when borrowers can no longer service their debt.
Rob Topping, Executive Chairman of Vibes Capital Management, described the product as useful for investors seeking short term liquidity while avoiding liquidation risk, but acknowledged that borrowing costs approaching 14% APR may discourage some users. The product enters a competitive market that already includes Bitcoin backed lending services from Coinbase, Binance, Nexo and Xapo Bank. However, Strike’s decision to eliminate price based liquidation triggers distinguishes its latest offering from many existing products.
A June survey by crypto lender Ledn found that 88% of crypto investors would consider using a crypto backed loan, yet only 14% currently do so. Confidence in lending platforms and concerns about market volatility remain the biggest barriers to adoption.
Conclusion
Strike’s new volatility proof Bitcoin loans represent a notable shift in crypto lending by removing automatic liquidations tied to market price swings. The product allows borrowers to retain ownership of their Bitcoin through periods of severe volatility, provided they continue making payments on schedule.
The trade off is clear: higher interest rates, a lower borrowing limit, and shorter loan terms. Whether investors are willing to accept those costs will likely determine the product’s success. As crypto lending continues to mature, Strike’s approach could influence how other lenders redesign their products to reduce forced selling during future market downturns.
