Protect Your Bitcoin-Backed Loan During Market Volatility — Tips from the Ledn Team

Bitcoin's price can move fast, and if you have an active loan, it's important to understand how to manage your LTV (Loan-to-Value ratio). Here's a quick breakdown of what you need to know:

Understanding LTV
Your LTV = Loan Balance ÷ Collateral Value. When BTC drops, your LTV rises. Here's what each range means:

• ✅ Below 60% — Healthy
• ⚠️ 60–70% — Approaching threshold
• 🔴 Above 70% — At risk, you'll get notified
• 🚨 Above 80% — Liquidation risk

Top tips to stay protected:

1. Turn on Auto Top-Up
This is your best line of defense. When your LTV hits 70%, Auto Top-Up automatically moves BTC from your Transaction Account to your loan collateral, rebalancing it back down to ~65–68%. Set it and don't stress.

2. Keep a BTC Reserve in Your Transaction Account
Auto Top-Up only works if there's BTC to pull from. Keep 10–20% of your current collateral as a spare reserve so it can do its job when it matters most.

3. Stay Ahead of Network Congestion
During sharp drops, everyone's trying to move collateral at once — blockchain congestion is real. If your reserve is already inside Ledn, top-ups happen instantly as internal transfers. Don't wait until the last minute to fund from an external wallet.

4. Make a Partial Repayment
You can reduce your LTV by repaying part of your loan in USDC. This directly lowers your outstanding balance and gives you breathing room without needing to add more collateral.

5. Redeem Excess Collateral When BTC Recovers
If BTC pumps and your LTV drops below 30%, you may be eligible to redeem excess collateral — provided you've had the loan for at least 60 days and meet the redemption interval requirements.

Managing your loan proactively — especially before volatility hits — is the key. Full details here: ledn.io/post/loan-management-tips

As always, drop any questions below. 👇