How the bitcoin line of credit (BLOC) works

Lava's bitcoin line of credit (BLOC) lets you borrow dollars against your bitcoin without selling it, at a fixed rate and with no monthly payments. Your bitcoin is held as collateral, and you draw only what you need, when you need it. The line stays open, so you can repay and borrow again without applying a second time.

How it works

1. Add bitcoin to Lava. Deposit bitcoin you already own, or buy bitcoin on Lava with no platform fee.

2. Choose how much to borrow. Each draw can start at up to 60% loan-to-value (LTV), the loan balance divided by the dollar value of your collateral. At 60% LTV, $10,000 of bitcoin supports a $6,000 draw. You can choose a lower LTV, and draws start at $100.

3. Use the dollars. Borrowed funds arrive in your Lava USD balance. From there you can spend them with Lava Card, send them to a bank account or withdraw them as stablecoins.

4. Repay on your schedule. There's no monthly payment and no maturity date. You can repay part or all of the balance at any time without a prepayment penalty, then draw again from the same line.

Costs and fees

The BLOC has two costs: a fixed interest rate between 6.50% and 8.50%, set by your line of credit balance, and a 2% annual capital charge. There are no origination fees and no early repayment fees.

Your rate is fixed for one year from the day you open the line. Interest applies only to what you've borrowed, compounds daily and is added to your balance.

The capital charge is 2% of the largest balance you reach during the year. It's added one year after you open the line, or when you close it if that comes first, and no interest accrues on it that year. Borrow $200, repay it, then borrow $500, and the charge is $10: 2% of your $500 high point.

Risks and limits

The main risk is liquidation. If the price of bitcoin falls, your LTV rises. Lava sends several alerts as it climbs, and you can lower it at any time by adding bitcoin or repaying part of your balance.

The app shows your liquidation price when you open the line or make a draw, and tracks your LTV in real time. If that price is reached, the entire line is liquidated and Lava does not return any collateral. The price is set with a buffer so the sale can cover your balance and fees.

Liquidation Protection lowers this risk. If your LTV crosses a threshold below the liquidation level, Lava automatically moves bitcoin from your available balance into collateral until your LTV is back where it started. It only helps if you hold spare bitcoin on Lava, so borrowing at a lower LTV gives you the most room.

Your rate is fixed one year at a time, so check the app for the rate that applies after your first year. Availability depends on your location, applicable terms and approval.

Who it's for

The BLOC is built for long-term bitcoin holders who need dollars but don't want to sell. That might be for taxes, tuition, a business expense, travel or a large purchase. If traditional loans have meant credit checks, paperwork, fixed payment schedules and slow approvals, the BLOC removes those steps.

It also suits Lava Card users who would rather fund spending at a fixed rate than carry a high-rate card balance. To move existing debt into a BLOC, see Lava Refinance. For larger loans or custom terms, see Lava Prime.

Get started

See current terms and open a line of credit at lava.xyz/bloc.