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Market Volatility: How Margin Calls Actually Work

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Market Volatility: How Margin Calls Actually Work
Insights December 11, 2025

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More crypto holders are choosing to borrow against their holdings rather than sell them outright. The shift is driven by tax considerations, long-term conviction in their assets, and a growing appetite for liquidity without giving up upside.

A crypto-backed loan works by pledging cryptocurrency as collateral in exchange for a cash loan, typically in EUR or USD. The lender applies a Loan-to-Value (LTV) ratio, which determines how much can be borrowed relative to the value of the collateral.

At Crypto-Bond, every request goes through a straightforward review process: applicants submit their desired loan amount, proposed collateral and duration through our online form, and our team responds with a personalised offer within 24 to 48 business hours.

As with any collateralised product, market volatility matters. A sharp drop in the value of the pledged asset can trigger a margin call, requiring the borrower to add collateral or repay part of the loan. Transparent communication throughout the loan term is central to how we manage this risk together with our clients.

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Got more questions?

Frequently Asked Questions

How does a loan backed by my cryptocurrencies work?–
You deposit your cryptocurrencies (BTC, ETH, LTC, USDT) as collateral in your Crypto-Bond wallet. Based on this collateral, we grant you a loan in EUR without requiring you to sell your assets. You keep your market exposure while accessing immediate liquidity.
What loan-to-value (LTV) ratio applies to my collateral?+
The loan amount depends on the value of the cryptocurrencies you deposit and a prudential Loan-to-Value ratio that varies by asset. This ratio is communicated to you before any approval, together with a personalised simulation.
What happens if the value of my collateral drops sharply?+
In case of a sharp market downturn, a margin call may be issued to reinforce your collateral. You are notified in advance and given a window to top up your collateral or repay part of the loan.
How long does it take to get a response to my loan request?+
Once we receive your request through the dedicated form, our team typically responds within 24 to 48 business hours with a personalised offer.
Are my funds and cryptocurrencies safe?+
Crypto-Bond AG is a Swiss public limited company registered with the commercial register of the canton of Zug. Deposited assets are held under strict security protocols (segregated wallets, internal controls).