Bitcoin financial services firm Onramp has entered a partnership with Arch to unveil a new bitcoin-backed lending service. This product allows BTC holders to secure loans while retaining ownership of their assets, catering to those who want liquidity without having to sell their bitcoins.

Key Points:

• Onramp collaborates with Arch to provide loans backed by bitcoin collateral.
• The service aims to deliver liquidity while ensuring buyers maintain BTC exposure.
• Borrowers can obtain funds without triggering taxable events.

The service enables borrowers to receive cash or stablecoins in return for using their bitcoin as collateral. This approach not only avoids capital gains taxes but also allows borrowers to benefit from potential price rises of the asset. According to the press release, Arch will manage the underwriting and loan distribution while Onramp will incorporate this service into its platform, offering users a modern alternative to conventional financing.

Bitcoin-backed loans are becoming increasingly favored this cycle as an alternative to traditional financing options, particularly among long-term BTC holders who prefer to keep their assets. This model is suitable for a range of financial needs, from personal liquidity to institutional financing strategies.

Read more: Coinbase to Offer Bitcoin-Backed Loans Through Morpho

Disclaimer: Portions of this article were produced with AI assistance and reviewed for accuracy and compliance with editorial standards.