In crypto lending, leverage is easy to access but hard to manage. Prices move quickly, collateral values shift in real time, and liquidation can happen faster than many borrowers expect. The metric that connects all of these elements is Loan-to-Value, or LTV.
Understanding LTV is essential for anyone using crypto-backed loans. It determines how much you can borrow, how risky your position is, and how close you are to liquidation at any moment.
What LTV Measures in Crypto Borrowing?
LTV represents the ratio between the amount you have borrowed and the current market value of your collateral.
If you deposit $10,000 worth of crypto and borrow $5,000, your LTV is 50%. If the collateral value falls to $8,000 while the loan remains unchanged, LTV rises to 62,5%. The loan did not change, but the risk did.
This is why LTV is dynamic. It moves with market prices, not with repayment schedules.
LTV and Borrowing Power
LTV defines borrowing power. Each platform sets a maximum initial
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