Asset Class
Digital Assets
Product Type
Structured Financing
Interest Rate
Low / potentially 0%
Collar Loans
Access liquidity against digital asset holdings while defining both downside protection and upside participation.
A collar loan combines secured financing with an options-based risk management strategy. The structure can materially reduce borrowing costs, remove traditional margin calls and provide non-recourse financing, while allowing the borrower to retain asset exposure within an agreed price range.
Collar economics are highly sensitive to LTV, tenor, volatility and option strikes.
We source and compare institutional structures to optimize the trade-off between liquidity, financing cost, downside protection and retained upside.
Interest can be materially reduced
Downside defined through the collar
Tailored LTV, floor and ceiling
Collar loans can provide substantially lower-cost liquidity than conventional margin lending while reducing the operational burden of managing collateral through volatile markets.
The borrower retains exposure between the agreed floor and ceiling and may benefit from non-recourse treatment depending on the structure. With no conventional margin calls, the financing can also provide greater certainty around liquidity requirements during periods of market stress.
Lower financing costs are achieved by exchanging part of the asset’s potential upside.
The borrower typically sells a call option, establishing a price ceiling, while a put establishes the downside boundary. If the asset appreciates above the ceiling, participation above that level is foregone. Treatment below the floor, including whether collateral may be relinquished or liquidated, depends on the specific facility.
Option tenors, strikes and rollover terms are market-dependent and must be repriced as the structure is extended.
A borrower holds $10 million of BTC and requires liquidity without selling the position.
A collar facility could provide approximately 65% LTV, or $6.5 million of financing. The borrower and lender establish a downside floor and an upside ceiling around the current BTC price.
Within that range, the borrower retains BTC price exposure. Above the ceiling, additional upside is capped. At or below the floor, the contractual downside mechanics apply.
In the supplied institutional example, a 65% LTV BTC collar was structured with a three-month term and 0% APR, with the call strike 30% above spot. Actual economics vary with market volatility, tenor and selected strikes.