Bitcoin as Collateral in Canada
The most sophisticated Bitcoin holders in Canada aren’t just buying and holding. They’re using their Bitcoin as collateral — accessing liquidity without triggering a taxable sale.
What Is Bitcoin-Backed Lending?
You pledge your Bitcoin as collateral. In return, you receive a CAD loan. You don't sell your Bitcoin — you temporarily assign custodial control of it to secure the loan.
The appeal: If you believe Bitcoin will appreciate, selling it to access cash is expensive (3.49% exchange fee + capital gains tax). Borrowing against it preserves your upside while giving you the liquidity you need.
How It Works in Canada
Key parameters (typical Canadian Bitcoin-backed loan):
- Loan-to-value: 50% (borrow $50K against $100K in Bitcoin)
- Interest: 8-12% annual
- Term: 1 year
- Prepayment: No penalty (typically)
- Custody: Bitcoin held by regulated Canadian custodian
Margin call risk: If Bitcoin drops significantly below the required loan-to-value threshold, additional collateral may be required or part of the loan may be called.
Who Uses Bitcoin-Backed Lending?
- Business owners who need working capital without selling Bitcoin
- Real estate investors who want to leverage Bitcoin for a down payment
- Entrepreneurs who want liquidity while maintaining Bitcoin exposure
- Corporations with Bitcoin treasury needing CAD cash flow
The Book
Jacob Asparian's book "Bitcoin as Collateral" covers this topic in depth — available on Amazon (ISBN 9798255726103).
DWM Canada
Digital Wealth Management Canada, a sister company of 1Bitcoin.ca, is building Canada's first regulated Bitcoin custody and lending platform. First close targeting April 2026.
FINTRAC Registered | Non-Custodial | Bitcoin-Only | 20,000+ Canadians | Since 2020
See also: Non-Custodial Bitcoin Canada | Bitcoin Self-Custody Canada | Buy Bitcoin in Canada