What a bank would do — and what you do instead
A bank lends against your income and credit history, sets a rate and, if you fall behind, works through a slow and regulated collections process. Crypto lenders and protocols lend against collateral instead, with no credit check. That makes borrowing fast, but enforcement is fast too: if the collateral falls far enough, it is sold automatically. Being your own bank here means being your own risk manager.
The idea
- Buy assets you expect to appreciate.
- Borrow against them instead of selling, to avoid realizing gains.
- Die holding them; in some tax systems heirs may receive a stepped-up cost basis.
The strategy works best with assets that are stable, lenders that are patient and rates that stay below the asset’s growth. Crypto offers fast loans with no credit check, but its price swings are much larger than a diversified stock portfolio’s.
Crypto versus traditional assets
| Stocks / property | Crypto collateral | |
|---|---|---|
| Typical volatility | Lower | Much higher |
| Margin call | Days, sometimes negotiable | Automatic, often instant |
| Loan rates (as of late September 2026, variable) | Varies by lender | From ~4–5% (Coinbase/Morpho) to 9.25–11.49% (Ledn) |
Crypto loan calculator
- Collateral value
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- Loan-to-value (LTV)
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- Liquidation price
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- Monthly interest cost
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- Total interest over term
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Uses simple interest, as most interest-only crypto loans do. Some lenders compound or charge origination fees.
Education only, not financial advice. Rates change and are not guaranteed. CoinPayBank is not a bank.
SourcesFrequently asked questions
Is buy, borrow, die legal?
Borrowing against assets is legal. Whether specific tax outcomes apply depends on your jurisdiction and circumstances — get professional advice.
What is the biggest mistake people make?
Borrowing near the maximum LTV. The strategy assumes you never sell; liquidation is a sale.
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