The risk words nobody explains.

Who actually controls the keys to your Bitcoin while a loan is open: you, the lender, or a shared arrangement like multisig where it takes more than one key to move coins.

Custody is the foundation everything else sits on. If the lender holds the keys outright, your coins ride on the lender’s solvency and security. Shared or non-custodial setups keep more control with you.

Is it custodial, non-custodial, or multisig? Who are the keyholders, and what does it take to move your coins without your consent?

When a lender re-uses your posted Bitcoin — lending it out, pledging it elsewhere, or trading against it — instead of holding it set aside just for you.

Re-used collateral can mean a lower rate, but it ties your coins to the lender’s other bets. If the lender fails, rehypothecated collateral is far harder to get back. Several past platform collapses traced back to exactly this.

A clear, written “no rehypothecation” policy, or a precise description of how and where your collateral is used. Vagueness here is the warning.

The ratio of how many dollars you have borrowed to the dollar value of the Bitcoin you posted. Borrow $40,000 against $100,000 of BTC and your LTV is 40%.

LTV is the dial between borrowing power and safety. A higher LTV gets you more cash now, but it leaves less room before a price drop pushes you toward a margin call or liquidation.

The starting LTV you choose, and the LTV at which the lender acts. The gap between them is your buffer — model it before you borrow.

The lender’s warning that your LTV has climbed too high — usually because Bitcoin fell — and you need to add collateral or repay part of the loan to bring it back down.

A margin call is your chance to act before forced selling. Some lenders give a generous cure window; others act fast. How much warning you get can decide whether you keep your coins.

The cure window: how long you have to respond, how you are notified, and whether partial top-ups are allowed before anything is sold.

What happens if a margin call goes unanswered: the lender sells some or all of your Bitcoin to bring the loan back within limits.

Liquidation is the worst-case outcome of a Bitcoin-backed loan. It can crystallize a loss, may trigger taxes, and is often the moment a borrower loses coins they meant to keep. Avoiding it is the whole game.

Whether liquidation is partial or total, the threshold that triggers it, and the safety-buffer band a lender leaves between your LTV and that line.

The risk that the other side of your deal — the lender, the custodian, the exchange — fails to do what it promised: returning your coins, staying solvent, or honoring the terms.

Most of the famous crypto losses were not Bitcoin failing — they were a counterparty failing. The more parties between you and your coins, the more counterparty risk you are carrying, often without noticing.

Track record, regulatory standing, who else touches your collateral, and whether the structure isolates your coins from the firm’s own balance sheet.

Published evidence — often a cryptographic attestation or audit — that a custodian or lender actually holds the Bitcoin it claims to hold.

It is reassuring, but it is only half the picture: it shows assets, not liabilities. A firm can prove it holds plenty of Bitcoin and still owe far more than it holds. Treat it as one input, not a guarantee.

Whether reserves are shown at all, how often, by whom, and whether liabilities are addressed alongside them. Frequency and independence matter.