Your debt stays fixed. Your safety doesn't. Here is one real loan followed through a rising and a falling market, with the math shown.
A bitcoin-backed loan has one number that decides everything day to day: your LTV, the loan divided by what your collateral is currently worth. The loan amount is fixed the day you sign. Your collateral's value is not. So every time bitcoin's price moves, your LTV moves with it, and your distance from a margin call moves too. This page follows a single loan through both directions so you can see exactly what changes, and what you can do about it.
Because your $50,000 debt never changes, your LTV is set entirely by bitcoin's price. Divide the loan by the collateral value and you get today's LTV. As the price climbs your LTV falls and your cushion grows. As it drops your LTV rises toward the danger zone. Here is the same loan mapped across a range of prices.
At $150,000 your LTV is 33%. At $100,000 you start at 50%. Bitcoin would need to fall to about $71,400 to trigger the margin call, a 29% drop, and to about $62,500 for liquidation, a 37% drop. Those two prices are the only ones worth memorizing.
Good news, with a catch. As bitcoin climbs, your collateral is worth more, your LTV falls, and your cushion against liquidation grows. At $150,000 the 50% loan you signed has quietly become a 33% loan. That gives you three levers:
The catch lives in lever two. Borrowing more resets your cushion to where you started, except now the price is higher and has further to fall. Re-levering every time bitcoin pumps is one of the most reliable ways to get liquidated in the drawdown that follows. The cushion you earned by waiting is worth keeping.
This is the direction to plan for, because bitcoin does it often and fast. Since 2014 it has had four drawdowns deeper than 50%, and 30% pullbacks happen even inside bull markets. Walk the example down:
Notice how the healthy stretch is wide and the dangerous stretch is narrow and close together. Once you are near the line, small further drops matter a lot, and they tend to arrive fast. What happens at the margin call, and what you can do about it, is next.
A margin call is the lender telling you your LTV is too high and you need to fix it. What happens next depends entirely on your lender, and it is the single most important piece of fine print to read before you borrow.
The three cure options each have a real cost. Topping up collateral is fast if you have spare bitcoin ready, and useless if your coins are in cold storage you can't reach in time. Paying down principal lowers your debt and your LTV, but asks for cash at the worst possible moment. Partial liquidation stops the bleeding by selling just enough to restore a healthy LTV, but it locks in a sale at a low price and can create a tax bill. The lesson is to decide your response before you borrow, and to keep your cure funds somewhere you can actually reach in a hurry.
The dream version goes like this. You borrow against your bitcoin when the price is low, the price rises, your LTV melts away, and you got liquidity without selling a single coin or paying a cent of capital gains tax. It does happen, and it is a real advantage of these loans over selling.
Here is the honest part. You cannot know in advance that today is the low. The exact same loan, taken at what turns out to be a local top, is a margin call a few weeks later. Bitcoin's history is full of both, side by side. So the takeaway is not to time the market, which almost nobody does reliably. It is to size the loan so you survive either direction.
In our example, a 50% starting LTV survives a 37% drop before liquidation. A loan taken at max LTV survives almost nothing. Borrow the amount that lets you sleep through a 30% down week, and the good scenario takes care of itself while the bad one can't wreck you. That is the same lesson as the most punished mistake in the guide: borrowing at max LTV.
Every number here is illustrative, chosen to show the mechanics cleanly. For real, daily-verified thresholds and rates from every lender we track, see the comparison table, and for the fundamentals start with the complete guide.