A bitcoin-backed loan lets you unlock liquidity without selling your bitcoin. You post your BTC as collateral, and in return, you get a cash loan - usually in fiat like USD or ZAR, or sometimes in stablecoins. Your bitcoin stays locked up while the loan is active, and when you repay the loan (plus interest), you get your bitcoin back.

It’s like borrowing against property - but instead of a house, you’re using digital gold.

Here's how it works:

1. You deposit bitcoin into a secured, custodial or multisig wallet.

2. The lender disburses a loan, typically up to 50–70% of your BTC's current value (the Loan-to-Value ratio, or LTV).

3. If the bitcoin price drops too far, you may need to top up your collateral or risk liquidation.

4. If the price goes up, you still benefit - your BTC is safe, and you didn’t trigger a taxable sale.

Bitcoin-backed loans are popular with long-term holders who don’t want to sell during bull runs or trigger capital gains. They're also used by businesses to access cash flow while keeping their BTC treasury intact.

But be warned: if your collateral drops below a critical threshold, it can be liquidated to protect the lender. So, managing price volatility and choosing the right terms is key.

TL;DR: A bitcoin-backed loan lets you borrow cash by locking up your BTC as collateral - no need to sell. You repay the loan, you get your bitcoin back. HODL now, spend later.