Digital financial services platform Strike launched a new volatility-proof bitcoin-backed term loan product on Tuesday, July 7, 2026.
The product is designed to protect borrowers from automatic liquidations during market crashes.
It completely removes traditional price-based loan-to-value (LTV) triggers, ensuring collateral remains secure as long as scheduled payments are maintained.
According to reports from Crypto Briefing and TradingView, the system replaces standard LTV threshold frameworks with a mechanism where partial liquidations are triggered exclusively by missed payments rather than asset price drops.
Borrowers who miss a scheduled payment are granted a 10-day grace period to fulfill their obligations or contact the company before any liquidation occurs.
Higher Costs for Added Protection
The protective features require an increased initial collateral requirement, limiting the maximum initial LTV ratio to 45% compared to the 50% threshold on standard Strike loans.
Additionally, the volatility-proof product is restricted to a six-month duration, lacks a line of credit option, and carries an APR premium that is 2.95 percentage points higher than standard options.
With Strike's standard Bitcoin loans charging an APR between 7.75% and 11.25%, the new product carries an estimated interest rate ranging between 10.7% and 14.2%.
The company charges zero origination, prepayment, or liquidation fees for both loan options, which are accessible through the Strike app across most US jurisdictions.
Strike established its bitcoin-backed lending infrastructure throughout 2025 by securing a $2.1 billion credit facility and forming corporate partnerships.
Company data indicates that Bitcoin dropped 54% from its October peak of $126,080 down to $58,190 on June 25, before trading near $63,000 during the product rollout.
A June report by crypto lending platform Ledn highlighted that while 88% of surveyed digital asset investors would consider crypto-backed loans, only 14% utilize them due to market volatility and low product confidence.
The service is available for new loans, refinancing, or debt consolidation under personal names with a $10,000 minimum, or business names with minimums as low as $5,000 depending on state regulations.
The product launch follows user feedback from Strike's initial lending program, which debuted in May 2025 and experienced numerous liquidations during subsequent market downturns.
Industry Reactions
"No margin calls. No price liquidations.
No matter how far bitcoin falls, your bitcoin doesn't move," said Jack Mallers, CEO of Strike.
Mallers explained that the additional fees are utilized to manage corporate exposure and fund market hedges that protect both the lender and the customers.
"The secret sauce is that we’re taking the extra charge that we’re giving you guys and we’re putting it on extra hedges in the market to protect all of us," Mallers said.
The executive emphasized that borrower communication remains necessary during repayment delays to prevent the firm from selling collateralized assets.
"If we don’t hear from you for a few weeks, then I may have no choice but to sell off some of the Bitcoin because it seems like you’re doing a hit-and-run," Mallers said.
Mallers clarified that the policy framework does not completely absolve borrowers from ultimate asset forfeiture under default conditions.
"That’s why we call it ‘volatility-proof,’ not ‘liquidation-proof,’" Mallers said.
The executive concluded that the product serves individuals who prioritize asset safety over lower interest costs.
"If you're OK with a slightly shorter term and a little bit higher of a fee, there is no price move that can liquidate you," Mallers said.
Bitcoin investor Fred Krueger noted that the structural changes could alter how debt defaults operate within the cryptocurrency industry during broader market corrections.
"Instead of volatility causing automatic liquidations, defaults would be driven by borrowers' inability to service debt rather than by temporary price swings," Krueger said.
Financial executives noted that the high interest rates reflect the cost of shifting market risk from the borrower to the platform.
“Great product for those who need near-term liquidity and don’t want to risk liquidation,” said Rob Topping, Executive Chairman of Vibes Capital Management.
