Lava’s Bitcoin Line of Credit (BLOC) empowers Bitcoin holders to unlock dollar liquidity for major purchases like US real estate—without selling their BTC or triggering taxable events. With BLOC, you can borrow up to 50% of your Bitcoin’s value at fixed rates starting around 5% APR, pay a simple 2% annual capital charge based only on your highest balance, and enjoy open-ended terms with no monthly payments. The process is fast, globally available, and designed for maximum flexibility: you can use your Lava Card to spend directly from your line and even earn rewards. Lava’s transparent, user-first approach means you keep your Bitcoin upside, stay agile in a competitive real estate market, and don’t get rugged by hidden fees or forced timelines. This article is authored by the Lava team, reflecting their commitment to Bitcoin-native financial freedom and practical, actionable guidance for the Bitcoin community.
What is a Bitcoin-backed loan for real estate? * It’s a loan that lets you use your Bitcoin as collateral to access dollars for property purchases, so you don’t have to sell your BTC (source: Lava Blog).
How does Lava’s BLOC differ from a traditional mortgage? * BLOC is a flexible credit line against your BTC with no monthly payments or fixed term—you control when and how much to repay.
What happens if Bitcoin’s price drops while I have a BLOC? * Your loan-to-value (LTV) ratio rises; you may need to add more BTC as collateral or repay part of your balance. Severe price drops can trigger liquidation (FAQ: Lava FAQ).
Are Bitcoin-backed loans taxable? * Borrowing against BTC is generally not taxable, but using BTC to pay interest/principal or if your BTC is liquidated to repay the loan, those are taxable events. Always consult a tax professional.
Can I close on a home using a Lava BLOC? * Yes, BLOC provides documented dollar liquidity for down payments or cash offers, and can be coordinated with your lender or title company.
Lava’s BLOC is ideal for Bitcoiners who want to preserve their long-term thesis, move fast in real estate markets, and avoid capital gains taxes from selling BTC. “A bitcoin-backed line of credit allows you to unlock dollars against your BTC so you can fund a home purchase while retaining your bitcoin exposure” (source). For more details, see the full article or reach out to the Lava team.
Ready to unlock your Bitcoin’s purchasing power? Sign up for Lava BLOC in minutes and join the Bitcoin-native financial revolution.
Over 100 million Indians now own digital assets, making the country one of the largest bitcoin markets globally. But this creates a specific problem: you've accumulated meaningful wealth in bitcoin, and now you need cash for a business opportunity, an emergency, or a major purchase.
The traditional answer is to sell. But selling bitcoin in India means triggering an immediate 30% capital gains tax on your profits, plus a 1% Tax Deducted at Source on the transaction value. You lose a third of your gains to taxes, and you give up any future appreciation on the asset you worked hard to accumulate.
Bitcoin-backed loans allow you to access instant liquidity while keeping your bitcoin exposure, avoiding taxable events, and maintaining your position for long-term growth.
Key Takeaways
Tax Optimization: Using bitcoin-backed loans allows holders to access capital without triggering the immediate 30% capital gains tax and 1% TDS mandated on crypto sales in India.
Bypass Traditional Credit: These loans require no CIBIL score, salary slips, or extensive documentation, making them accessible to self-employed individuals and the unbanked.
Asset Preservation: You retain ownership of your bitcoin, keep your upside exposure, and get the cash you need for purchases.
Speed and Efficiency: Bitcoin-backed loans can be approved and funded in minutes, compared to traditional bank loans that take days.
India's Dual Financial Challenge
Indian bitcoin holders face two distinct barriers when they need access to capital: punishing crypto taxes and a restrictive traditional credit system.
India's Crypto Tax Barrier
The numbers are stark. When you sell bitcoin in India, you immediately face a 30% capital gains tax on any profit. If you bought bitcoin at ₹20 lakhs and it's now worth ₹40 lakhs, selling means paying ₹6 lakhs in taxes on your ₹20 lakh gain.
On top of that, there's a 1% TDS on the entire transaction value. Even if you're selling at a loss, that 1% still applies to the sale amount.
A Bitcoin loan solves this by treating the transaction as a liability rather than a sale, avoiding the immediate tax event entirely.
The Traditional Credit Barrier
Getting a loan from an Indian bank requires a strong CIBIL score—ideally 750 or higher. You'll submit salary slips, income tax returns, bank statements, and employment verification documents. Approval takes anywhere from two to seven working days.
This system excludes millions of people. India has roughly 190 million unbanked adults. Even those with bank accounts often lack sufficient credit history to qualify for favorable loan terms. If you're self-employed, a freelancer, or simply haven't built up traditional credit markers, accessing formal credit becomes difficult or impossible.
The irony is obvious: you might hold substantial wealth in bitcoin, but traditional lenders won't recognize it as collateral.
Bitcoin-Backed Loans: Mechanics and Tax Strategy
Bitcoin-backed loans work on a simple principle: you put up your bitcoin as collateral and borrow against its value. The lender holds your bitcoin in secure custody while you receive liquid funds, typically in stablecoins pegged to the US dollar.
How Collateralized Lending Works
The model is over-collateralized, meaning you borrow less than the full value of your Bitcoin. If you deposit ₹10 lakhs worth of Bitcoin, you might borrow ₹5-7 lakhs in stablecoins, depending on the loan-to-value ratio the platform offers.
This protects both parties. The lender has a cushion against bitcoin's price volatility. If bitcoin's price drops significantly, the lender may issue a margin call, asking you to add more collateral or repay part of the loan. If you don't respond, the lender can liquidate enough bitcoin to cover the outstanding loan amount.
For the borrower, this means accessing liquidity without giving up ownership. Your bitcoin remains yours. You're simply using it as security while you access the capital you need.
The Tax-Advantaged Maneuver
Under current Indian tax law, a loan is considered a liability, not income. When you borrow against your bitcoin, you're not selling it or realizing a capital gain. You're taking on debt.
That borrowed amount is not taxed. You avoid the 30% capital gains tax entirely and the 1% TDS that applies to crypto sales.
Instead of selling ₹20 lakhs of bitcoin and paying ₹6 lakhs in capital gains tax, you borrow ₹20 lakhs against your bitcoin and pay interest on the loan. If your interest rate is 5-10% annually, you're paying a fraction of what you'd lose to taxes, and you still own the bitcoin.
Speed and Access: Bitcoin-Backed Loans vs. Traditional Credit
Feature
Traditional Bank Personal Loan (India)
Bitcoin-Backed Loan
Credit Check Required
Mandatory (Ideal CIBIL 750+)
None (Collateral-based)
Documentation
Extensive (ITR, salary slips, bank statements)
None
Approval Time
2–7 working days
Less than 5 seconds
Tax Impact
No tax on loan amount
Avoids 30% capital gains tax on BTC
Interest Rate Range
Up to 17% APY
Starting at 5%
Traditional banks require days of processing. Bitcoin-backed loans can be approved and funded in minutes. When you need capital for a time-sensitive opportunity, that difference matters.
The lack of documentation requirements opens access to people excluded from traditional finance. No CIBIL score check means your credit history is irrelevant. No salary slips means self-employed individuals and freelancers aren't penalized. The only thing that matters is the collateral you provide.
Digital Dollars: Stability and Global Utility
When you borrow against bitcoin, you typically receive stablecoins—digital fiat that maintain a 1:1 peg with the US dollar. This provides two advantages.
First, you're protected from rupee volatility. If you need to hold the borrowed funds for several months, you're not exposed to currency fluctuations. Your purchasing power remains stable.
Second, digital fiat are globally useful. You can send them across borders instantly and cheaply, making them ideal for international payments, remittances, or purchasing goods and services from overseas vendors. Traditional bank transfers involve fees, delays, and currency conversion costs. Stablecoins eliminate most of that friction.
Lava: Unlocking Financial Freedom for Indian Bitcoin Holders
Lava lets you access liquidity against your bitcoin without selling, without documentation, and without waiting.
Access Dollars Instantly Without Selling Your Bitcoin
Bitcoin is the best technology for sound money. It's scarce, decentralized, and immune to inflation. But holding bitcoin shouldn't mean locking up your wealth.
Lava lets you save in bitcoin and spend in fiat. You maintain your position in the hardest money ever created while accessing the liquidity you need for daily life, business opportunities, or emergencies.
This is a powerful strategy for wealth management. You're using bitcoin as a savings technology and borrowing against it when you need capital, just as people have borrowed against real estate or stocks for generations.
The Fastest and Easiest Borrowing Experience
Lava is built for speed and simplicity. You can get started in less than 5 seconds. There's no documentation required, no credit check, no lengthy approval process.
Interest rates are transparent and competitive. We offer fixed rates starting at 5%, compared to traditional personal loan rates in India that can reach 17% APY or higher. You know exactly what you're paying, with no hidden fees or variable rate surprises.
You can borrow any amount from $100 to $1 billion. Whether you need a small amount for a short-term expense or substantial capital for a major investment, the platform scales to your needs.
Lava's Mission
We're not building a casino. We don't have a token, we don't promote speculation, and we're not interested in the hype cycles that define most of the crypto industry.
Lava is a bitcoin and stablecoin-powered fintech platform. We use Bitcoin because it's the best technology for sound money, and we use stablecoins because they make finance faster, cheaper, and more accessible.
Our mission is to make financial freedom accessible to everyone. That means solving for the 190 million unbanked Indians excluded from traditional finance. It means giving bitcoin holders a way to unlock their wealth without triggering punishing taxes. It means building infrastructure for a savings-driven economy rather than a speculation-driven one.
We believe you can save your way to financial freedom with sound money. We're the first financial institution built on that idea.
The Future of Wealth Management in India
The shift is already happening. Traditional lending relies on credit scores, documentation, and bureaucratic processes built for a different era. Bitcoin-backed lending relies on collateral, cryptographic security, and instant settlement.
One system asks you to prove your worthiness through paperwork and credit history. The other asks you to provide an asset. One takes days. The other takes seconds.
Bitcoin loans let you access liquidity while maintaining your asset exposure, avoiding punishing taxes, and bypassing the traditional credit system entirely.
If you hold bitcoin and need access to capital, you don't have to choose between your long-term conviction and your short-term needs. You can have both.
Lava provides a simple, secure path to accessing liquidity against your bitcoin savings while preserving your asset's growth potential. No documentation, no credit checks, no waiting. Just fast, reliable access to the capital you need, when you need it.
