The Big Idea (Hype, but with guardrails)
Offer BTC purchase loans that look and feel like a mortgage for one coin: predictable payments, strong collateral controls, crystal‑clear disclosures, and world‑class custody. Pair that with agent support, real‑time LTV monitoring, and instant pre‑qualification. Keep it compliant, avoid past industry mistakes, and make it joyful to get to 1 BTC—safely.
Product Lineup (Pick the right tool for the buyer)
- BTC Purchase Loan (Custody‑Collateralized)
- Goal: Buy 1 BTC today; repay over time.
- Structure: Borrower puts a down payment; the purchased BTC is locked in qualified custody as collateral (multi‑sig/tri‑party). Typical starting LTV ~50% is industry‑standard for BTC‑backed lending; higher LTVs are possible but riskier.
- Margin safety: Example operating trigger—margin call near 70% LTV to restore to ≤60% (illustrative, used by live BTC lenders).
- BTC Installment “Layaway” (Escrow Accumulation)
- Goal: Accumulate toward 1 BTC with fixed installments.
- Structure: Platform progressively purchases BTC into escrow as payments come in; optional small credit top‑ups near the finish line to cross 1 BTC (keeps LTV conservative).
- “Top‑Up to One” Credit Line (DCA + Draw)
- Goal: You’ve stacked 0.6 BTC; draw a small loan to top‑up to 1.0 BTC, locking the whole coin as collateral. Dynamic LTV adjusts with price.
- Institutional Block Financing (Prime‑style)
- Goal: Finance larger clips with bank‑grade controls.
- Structure: Tri‑party collateral management with independent custodian and automated margin workflows; bank holds cash claim, custodian controls BTC movement.
How a BTC Purchase Loan Works (Step‑by‑step magic)
- Pre‑qual & Affordability
- Soft credit check + income/DTI + KYC/AML (Travel Rule readiness for on‑chain transfers).
- Price‑Lock & Funding
- Short price‑lock window (e.g., 5–15 minutes) to buy 1 BTC at market; loan closes against that purchase.
- Custody & Control
- BTC is locked in multi‑sig or multi‑institution custody (no single point of failure). Trading keys are split; movement requires quorum.
- Real‑Time LTV & Alerts
- Live LTV meter; instant alerts; auto‑top‑up options from stablecoin or bank account.
- Margin Call & Liquidation
- If LTV hits the warning band, borrower can add collateral or prepay; if it breaches the liquidation band, system sells a slice of BTC to cure LTV (pre‑disclosed waterfall). (70% margin‑call / 60% restore is a common pattern in BTC loans.)
Risk & Pricing Policy (Clear, firm, fair)
Recommended LTV bands (retail):
| Band | LTV at Origination | Borrower UX | Risk Controls |
| Conservative | ≤ 50% | Smoothest approvals, best rates | Deep buffer vs. volatility |
| Standard | 50–60% | Balanced | Auto top‑ups + early warnings |
| Aggressive | 60–70% | Tight buffers | Frequent margin reviews; higher APR |
- Why ~50% is “home base”: It’s the widely cited “industry‑standard” LTV for BTC‑backed loans—enough cushion for swings, without constant calls.
Example triggers (illustrative):
- Warning: 60–70% LTV.
- Margin call: 70% LTV → restore to ≤60% within a set window (e.g., 24 hours).
Rate card sketch: APR = Base (risk‑free) + LTV premium + tenor adj. + op‑ex + capital charge. Expect higher APRs than a car loan due to collateral volatility and capital requirements.
Numbers You Can Pitch (clean, transparent math)
Assume 1 BTC = $65,000 at purchase.
- 50% LTV loan (borrow $32,500), 10% APR, 24 months
Payment ≈ $1,499.71/mo, total repay ≈ $35,993.04.
Margin‑call price (70% LTV) ≈ $46,428.57 (a ~28.6% price drop from $65k). - 65% LTV loan (borrow $42,250), 12% APR, 36 months
Payment ≈ $1,403.30/mo, total repay ≈ $50,518.97.
Margin‑call price (70% LTV) ≈ $60,357.14 (only a ~7.1% drop triggers a call).
Takeaway: Conservative LTVs dramatically reduce stress. (70% margin‑call bands similar to what some providers disclose publicly.)
Compliance & Licensing (bulletproof the model)
Global AML/KYC & Transfers
- Follow FATF virtual asset guidance; implement the Travel Rule for qualifying transfers.
United States
- Exchange/fiat rails = FinCEN MSB obligations (AML program, SAR/CTR).
- Truth in Lending (Reg Z/TILA): standardized APR/fees/disclosures for consumer loans.
- If you partner‑originate with a bank, manage true lender and rate exportation risk; OCC’s “true lender” rule was repealed, so expect case‑by‑case scrutiny under state laws.
- 2025 shift: U.S. bank regulators pulled back prior “advance‑non‑objection” crypto guidance; still, banks must ensure activities are legal and safe/sound. (Fed & OCC announcements; OCC IL 1183 rescinds IL 1179.)
- Avoid “yield” products that look like retail securities unless properly registered—see BlockFi and Genesis/Gemini actions for unregistered crypto lending programs.
United Kingdom
- FCA crypto financial‑promotion rules apply to marketing; rigorous risk warnings and approval pathways required.
European Union
- MiCA fully phased in (stablecoin rules from June 2024; broader CASP rules from Dec 30, 2024); align custody/trading permissions and disclosures accordingly.
Bank Capital (if a bank holds BTC exposure)
- Basel’s crypto standard is conservative: Group 2 assets (e.g., unbacked crypto) can carry very high risk weights (up to ~1250%) and exposure caps—this affects pricing and balance‑sheet appetite.
Custody Architecture (trust by design)
- Tri‑party: Lender, borrower, independent custodian. The custodian enforces release conditions; lender has control rights but not unilateral seizure.
- Multi‑institution custody: Split keys across separate professional key agents to remove single‑custodian risk.
UX That Sings (and prevents mistakes)
- “Get to 1 BTC” Wizard: down‑payment slider, LTV picker, rate preview, real‑time margin‑call simulator.
- Agent assist: Certified “Bitcoin agents” get a deal health score (affordability + LTV buffer + volatility); they coach borrowers toward safer bands.
- Auto‑stabilizers: Optional “stability reserve” (e.g., 5% stablecoin buffer) that auto‑tops collateral on dips; borrower can opt in/out.
- Fairness & Clarity: Reg‑grade APR & fee box, prepayment without penalty, hardship options (payment pause, restructure).
Operating Playbook (so lenders sleep well)
- Underwriting: Income/DTI + soft credit + volatility stress (e.g., 30–40% drawdown shock).
- Conservative Origination: Start the mass‑market at ≤50–55% LTV; require bigger down‑payments for higher LTV tiers.
- Dynamic Risk Controls: Automated exposure limits per borrower; ratchet LTV ceilings during volatility spikes.
- Dispute‑proof Workflows: Pre‑agreed cure periods and partial liquidation waterfall; all events timestamped and auditable.
- No rehypothecation (retail default): keep collateral dedicated and segregated.
Quick Scenarios (tell the story)
Starter Path (Conservative):
- Buyer puts 50% down; borrows the other half for 24 months.
- They get predictable payments and a thick volatility buffer (margin call needs ~28.6% price drop from entry at $65k).
- If the price rises, borrower can withdraw excess collateral (lowering LTV) or refi to a lower rate.
Stretch Path (Aggressive):
- Buyer puts 35% down; starts around 65% LTV.
- Lower upfront cash but tight buffer—a ~7% drop could trigger a margin call at 70% LTV. Only suitable for borrowers who understand and can fund top‑ups quickly.
Why this wins (and stays out of trouble)
- Transparent lending with proper disclosures (TILA/Reg Z in the U.S.).
- AML/KYC that matches FATF expectations and FinCEN MSB rules for exchange/fiat rails.
- Promotion compliance in the UK (FCA rules) and full MiCA alignment in the EU.
- Learned the lesson from unregistered yield programs (BlockFi; Genesis/Gemini): don’t dress deposits as securities—keep retail lending clean and properly authorized.
Final Spark ✨
Bundle this financing layer right into listings: every “1 BTC” card shows Down Payment → Monthly → LTV buffer → Risk rating. Add a “Safer Choice” badge for ≤55% LTV. Put agents on the buyer’s side, give them tools to coach, and make the journey to a whole Bitcoin feel possible, responsible, and exciting.
If you want, I can turn this into a one‑pager product spec or a slide deck next—with rate tables, trigger bands, and custody diagrams you can hand to banking partners.