Loan-to-Value Ratio (LTV) is a financial term that measures the ratio of a loan amount to the value of the asset being used as collateral. In the context of cryptocurrency lending, it assesses how much you can borrow against your cryptocurrency holdings.For example, if you have an asset worth $10,000 and your lender allows a maximum LTV of 60%, you could potentially borrow $6,000. LTV is crucial because it helps lenders determine the risk associated with the loan. A higher LTV means higher risk, as it signifies a smaller cushion against the asset’s value dropping.LTV ratios vary from one lending platform to another and can also depend on the type of cryptocurrency involved. It’s essential for borrowers to understand LTV, as it can impact liquidation risks. If the asset’s value falls below a certain threshold, lenders may liquidate the collateral to cover the loan, making careful management of LTV vital for borrowing strategies.
Avalanche Treasury Co. to Go Public in $675M Deal With Mountain Lake Acquisition
Avalanche Treasury Co. (AVAT), a digital asset treasury company aligned with the Avalanche Foundation, said Wednesday it has agreed to