For most of Bitcoin’s relatively short institutional history, the treasury playbook has been pretty simple: buy it, hold it and decide how much exposure belongs on the balance sheet. But as those holdings grow, institutions are increasingly looking at Bitcoin as collateral, and asking how it can be used to access liquidity, fund expansion and support more sophisticated financing structures.
Using Bitcoin as collateral is becoming one of the more interesting answers.
Companies are starting to use Bitcoin to access liquidity, finance acquisitions and capital expenditure, manage the working-capital demands of Bitcoin-native businesses and support credit structures, without necessarily selling the BTC they already hold.
A recent example came when MARA entered into two Bitcoin-backed credit facilities with Coinbase Credit and Two Prime. Together, the facilities provided $600 million of additional borrowing against 18,750 BTC, worth around $1.2 billion when the deals closed. MARA said the proceeds could be used for general corporate purposes, including funding part of its planned acquisition of Long Ridge Energy & Power.
At that size, Bitcoin-backed borrowing starts to look less like a niche crypto product and much more like conventional secured corporate finance, with Bitcoin sitting in the collateral account.
As Richard Green, VP of Institutional at RootstockLabs, put it during a recent discussion with Xapo Bank and DMND Mining Pool: “Institutions can be Bitcoin heavy, but they’re liquidity constrained.”
Solving that mismatch is one of the clearest uses for Bitcoin-backed credit. But it is not the only one.
1. Turning balance-sheet Bitcoin into corporate liquidity
The simplest use case is also the most obvious: using Bitcoin as collateral to raise cash while keeping the underlying BTC position.
For a company that holds Bitcoin as part of a long-term treasury strategy, selling it to cover a temporary cash need may not make much sense. The BTC could form part of a strategic reserve, a mining accumulation strategy or a broader capital-allocation policy. Selling it for short-term liquidity can work against the reason the company accumulated it in the first place.
Borrowing against it gives the treasury another option.
Here’s Tommy Doyle, Head of Institutional at Xapo Bank, explain more:Bitcoin: The Most Liquid Collateral Mankind Has Ever Seen?
A company can pledge BTC, receive dollars or another liquid asset, and deploy that capital elsewhere in the business. The decision then becomes less about whether Bitcoin can be sold and more about whether the cost and risks of borrowing are preferable to reducing the company’s Bitcoin position.
MARA’s August facilities show how quickly these structures are starting to resemble conventional corporate lending. The Two Prime portion carries a fixed 7.65% rate and matures in August 2028. The Coinbase facility is priced at the federal funds midpoint plus 3.875% and also has a multi-year maturity.
The company’s SEC filings also spell out collateral-maintenance requirements and the circumstances in which the lender can liquidate pledged Bitcoin.
For an institutional borrower, those details are just as important as the headline loan amount. Tenor, margining, custody, liquidation rights, reference pricing, counterparty exposure and the legal treatment of the collateral all determine how the loan behaves in practice.
(Will add in Richard’s video on this topic)
Bitcoin itself may be extremely liquid. That does not make the financing around it simple.
2. Financing acquisitions, infrastructure and capital expenditure
The use case becomes more interesting when Bitcoin-backed borrowing moves beyond short-term liquidity and starts funding acquisitions, infrastructure and expansion.
MARA again provides a useful example. The company has said its new facilities can help finance its planned acquisition of Long Ridge Energy & Power, while its broader infrastructure strategy includes high-performance computing and Bitcoin mining. MARA described the financing as a way to “activate” part of its Bitcoin reserves as a non-dilutive source of funding while maintaining exposure to BTC.
It is not the only company experimenting with this approach.
PowerCompute, a listed Bitcoin treasury and mining company expanding into high-performance computing and AI infrastructure, announced in August that it had refinanced $18 million of existing debt through a new facility secured by 307 BTC.
For Bitcoin-native companies, that changes the role Bitcoin can play on the balance sheet. BTC is not only something the business produces or accumulates after other capital needs have been met. It can also become part of the company’s borrowing base.
That is particularly relevant for miners.
During the RootstockLabs discussion, Tommy, described what his team is beginning to see:
“We’re actually seeing this new opportunity where miners are borrowing against the Bitcoin to raise dollars to help fund their AI business.”
The logic is fairly straightforward. A miner may own Bitcoin, ASICs, power infrastructure, long-term energy contracts and potentially valuable data-centre capacity, yet still need significant amounts of capital to expand or repurpose that infrastructure.
Historically, the choices might have been to sell Bitcoin, issue equity, take on traditional debt or arrange some form of asset-backed financing. Bitcoin-backed credit adds another option.
That makes the decision much more familiar from a CFO’s perspective. Instead of simply asking whether BTC should be sold to fund a project, the treasury can compare different sources of capital based on cost, duration, collateral requirements, dilution and strategic flexibility.
3. Managing the working-capital mismatch in Bitcoin mining
Mining is also a good example of where Bitcoin-backed credit can solve a very practical operating problem.
Miners earn revenue in Bitcoin but pay most of their expenses in fiat. Electricity, salaries, equipment, hosting, debt service and infrastructure investment still need to be paid regardless of what is happening in the Bitcoin market.
Meanwhile, the BTC revenue side of the business is influenced by Bitcoin price, network difficulty, transaction fees and the economics created by each halving cycle.
That creates a working-capital problem that is quite different from the one faced by a conventional company. Learn more.
During the webinar, Denis Rusinovich, VP of Corporate Development at DMND Mining Pool, described how the pressure can appear in both strong and weak markets. When conditions are good, miners may need capital quickly to expand. When conditions deteriorate, the challenge becomes meeting operating expenses while margins are tightening.
Borrowing against Bitcoin can help bridge those periods without forcing the miner to sell BTC every time there is a mismatch between revenue and expenditure.
But mining also shows why the structure of the loan matters so much. If Bitcoin falls sharply, the value of the collateral falls with it. For a miner, that same price move can also reduce revenue and weaken cash generation just as the lender may be asking for additional collateral.
That is the kind of wrong-way risk treasury teams need to model before entering into a facility.
The initial loan-to-value ratio only tells part of the story. A borrower also needs to understand the margin-call level, liquidation threshold, cure period, collateral valuation methodology and how much additional liquidity is available elsewhere on the balance sheet if more collateral has to be posted.
So the useful question for a treasury team is not simply, how much can we borrow against our Bitcoin? It is whether the company understands exactly what happens to that liability if Bitcoin falls sharply.
Watch the full webinar here: https://webinar.rootstocklabs.com/
4. Building more sophisticated Bitcoin treasury strategies
Borrowing is only one part of the picture. As the market develops, institutional treasury teams are starting to think about Bitcoin within a broader asset-and-liability framework rather than treating the choice as simply hold versus sell.
Denis described it during the discussion as:
“It’s not about sell, hold, or borrow, but actually recycle and velocity.”
That framing becomes particularly relevant for businesses whose Bitcoin flows are relatively predictable.
A miner may know roughly how much BTC it expects to produce while also having regular fiat-denominated expenses. A corporate treasury may want to maintain a strategic Bitcoin reserve while periodically needing dollar liquidity. A fund may want to retain medium-term BTC exposure while meeting obligations elsewhere in the portfolio.
Credit can sit between those positions rather than forcing a sale every time liquidity is required.
The webinar also touched on more specialised structures involving BTC-denominated borrowing, forward commitments, hedging instruments and, eventually, financing linked to mining equipment or hashrate.
Not all of those markets are equally mature today. But they suggest that Bitcoin credit could become much more tailored to the economics of the borrower instead of being sold as one standardised product with broadly similar terms for everyone.
Traditional credit markets already work this way. A lender does not price every company identically because they happen to own the same type of asset. Cash flow, liquidity, credit quality, business model, collateral, covenants and duration all affect the financing terms.
There is little reason Bitcoin-backed credit should be different.
Tommy argued during the discussion that institutional pricing is likely to become more differentiated as the market develops, with both borrower quality and lender quality reflected in the rate and structure.
That would be a meaningful change from the earlier crypto-lending market, where much of the focus was simply on accessing liquidity. A more mature market will have to compete on capital efficiency, credit underwriting and structure as well.
5. Turning Bitcoin-backed loans into an institutional credit market
There is another development taking place above the level of the individual borrower.
Bitcoin-backed loans are themselves beginning to become assets that can be financed and distributed through the credit markets.
In February 2026, Ledn completed a $188 million asset-backed securitization backed by Bitcoin-collateralized loans. S&P Global assigned a BBB- investment-grade rating to the senior notes — the first structured-finance transaction backed by Bitcoin loans to receive a rating from the agency.
The significance here is the funding model.
A lender that has to finance every new Bitcoin-backed loan from its own balance sheet will eventually hit a limit. If those loans can instead be originated, pooled and financed or distributed through institutional credit markets, the lender can tap into a much larger pool of capital.
That is how lending markets such as mortgages and auto finance grew well beyond the balance sheets of the institutions that originally made the loans.
Digital-asset credit is beginning to experiment with similar infrastructure.
In June, Kraken and Maple announced an onchain warehouse facility designed to finance Kraken’s digital-asset-backed OTC lending business. The structure uses a bankruptcy-remote SPV, senior financing and independent administration, while the underlying collateral is held by Kraken Financial.
What is interesting is not simply that some of the transaction takes place onchain. The structure combines familiar institutional credit concepts (collateral segregation, seniority, bankruptcy remoteness, servicing and visibility into loan performance) with programmable financial infrastructure.
Once Bitcoin-backed lending starts connecting to this kind of funding market, it stops being only a lending product. It starts becoming part of a broader credit market.
Bitcoin may be liquid. That does not make every Bitcoin-backed loan safe.
Bitcoin has several characteristics that make it interesting as collateral. It trades around the clock across global markets, has deep liquidity relative to many alternative collateral assets and can be transferred and verified digitally.
None of that removes the need to scrutinise the loan itself.
As Tommy put it:
“I’m lending you fiat. I want my fiat back; you want your Bitcoin back.”
The lender wants to know that there is enough collateral, that it can liquidate efficiently if necessary and that the borrower can ultimately repay the loan.
The borrower has a different set of concerns. Where is the Bitcoin held? Can it be rehypothecated? Who has legal title? What happens if the lender becomes insolvent? When exactly is a margin call triggered, and how much time does the borrower have to respond?
Even the Bitcoin price used to calculate LTV is a design decision. Which index is being used? Which exchanges feed into it? How quickly does a price move trigger a margin call? Where is collateral sold in a stressed market, and is it kept segregated before that point?
Tommy summed it up well during the webinar:
“The devil’s in the detail.”
For an institutional borrower, those details are not secondary terms buried in the paperwork. They are a large part of the product they are buying.
From Bitcoin treasury asset to financial collateral
The first phase of institutional Bitcoin adoption was largely about gaining exposure. The next is increasingly about what institutions can do with the asset once they own it.
MARA using Bitcoin to support corporate financing, miners exploring Bitcoin-backed funding for infrastructure, and the emergence of securitizations and warehouse facilities all point in the same direction: Bitcoin is becoming part of the financial architecture around an institution, not just an asset on its balance sheet.
For that market to deepen, institutions will need better collateral management, clear liquidation mechanics, professional custody and programmable credit infrastructure. This is where Bitcoin-native networks such as Rootstock can play a role, providing rails for financial applications built around BTC.
The opportunity is bigger than simply helping Bitcoin holders avoid selling. It is about building a market where Bitcoin can function as collateral with the risk management, transparency and infrastructure institutions already expect. Here Diego expands on why credit could be the next Bitcoin market.
Bitcoin has made it onto institutional balance sheets. The next question is what those balance sheets can do with it.
This material is provided for informational purposes only and does not constitute financial or investment advice.