LTV Ratio stands for Loan-to-Value Ratio. It measures the ratio of a loan amount to the value of the collateral backing it. In the case of cryptocurrency, it is commonly used in lending and borrowing platforms.For example, if you want to borrow funds against your cryptocurrency assets, the platform may evaluate the value of your assets and compare it to the loan you wish to take out. If you have $10,000 worth of cryptocurrency and you want to borrow $5,000, the LTV Ratio would be 50%. This is calculated by dividing the loan amount by the asset’s value.A lower LTV Ratio indicates lower risk for lenders, as there is a greater buffer if asset values fluctuate. Conversely, a higher LTV Ratio can signal higher risk, which may lead to stricter loan terms or higher interest rates. It’s vital for borrowers to understand their LTV Ratio, as it plays a significant role in determining the terms of their loans and the risk involved for both parties.