Strike Launches Volatility-Proof Bitcoin Loans to End Price Liquidations

Overview of the New Loan Product

Strike rolled out its volatility-proof Bitcoin loan offering on July 7, 2026. The service allows users to borrow against their Bitcoin holdings without the risk of automatic liquidations caused by market price movements. As long as borrowers maintain their payment schedule, their collateral remains in place regardless of how much Bitcoin's value changes.

This development comes from customer input gathered after Strike's initial Bitcoin loan launch in May 2025. Many users experienced liquidations amid a period when Bitcoin fell 54% from its peak. Jack Mallers, Strike's CEO, addressed these concerns directly.

How the Loans Work

Under the new structure, borrowers post Bitcoin as collateral and receive USD. Unlike standard crypto loans, declines in Bitcoin's price do not increase the loan-to-value ratio in a way that triggers calls or sales. The focus shifts to payment performance rather than asset value fluctuations.

If borrowers miss payments, a 10-day grace period applies. After that, Strike may sell portions of the collateral to cover amounts due. Mallers noted the distinction: the product protects against volatility but not against default.

The additional costs fund hedging strategies that allow Strike to manage the removed price risk. Standard loans from Strike carry rates between 7.75% and 11.25% APR. The volatility-proof version adds roughly 2.95 percentage points, resulting in rates from about 10.7% to 14.2% APR.

Terms and Availability

Volatility-proof loans support new borrowing, refinancing, or consolidation of existing loans. They apply to fixed-term loans in most U.S. states but exclude California, New York, and Texas under current rules. Minimum loan amounts start at $10,000 for personal use and can be lower for qualifying businesses.

Borrowers cannot access collateral mid-term. At maturity, full repayment is required, or the process for handling overdue amounts begins after the grace period.

Market Context and Reactions

The launch occurs during a bear market phase for Bitcoin, with the asset trading well below recent highs. Bitcoin has recorded 30% or greater drops in 10 of the past 12 years, and 50% or larger drawdowns multiple times since 2014. These patterns have created challenges for traditional lending models that rely on collateral value maintenance.

Industry participants noted the product's approach to a common issue in crypto lending. Fred Krueger stated that it could address forced selling during crashes by tying outcomes more to debt servicing ability than temporary price swings. Rob Topping described it as useful for those seeking liquidity without liquidation exposure, while pointing out the elevated rates.

Strike backs the offering with a substantial credit facility and partnerships that support collateral tracking. The service fits into broader efforts to expand Bitcoin's role in financial services while managing the asset's inherent price movements.

Comparison to Standard Lending Practices

Traditional Bitcoin-backed loans often include LTV thresholds that lead to warnings at 65%, margin requirements at 70%, and liquidations at 85%. The volatility-proof model removes these price-based mechanisms entirely, replacing them with payment-based accountability.

This change provides certainty for long-term holders who want access to capital without constant monitoring of market conditions. However, it requires discipline in cash flow management and acceptance of reduced borrowing capacity and elevated costs.

Strike positions the product as a direct response to user demands for stability in uncertain markets. The six-month term and 45% LTV limit represent the primary adjustments needed to deliver the price protection.