SALT Lending Executive Expects More Bitcoin Holders to Borrow Rather Than Sell

More bitcoin holders may come to borrow against their coins rather than sell them, according to Hunter Albright, chief revenue officer of SALT Lending, who set out his view of the next three to five years in an interview on BMTV.

The piece, published by Bitcoin Magazine on 18 September, is sponsored content. SALT Lending is a paid sponsor and the official liquidity sponsor of BMTV, Bitcoin Magazine's video programme, and its views should be read in that light.

The case for borrowing

Albright anticipates that loans secured on bitcoin will become more widespread as the market develops and owners get used to pledging their coins as collateral. He said he hoped a rising proportion of holders would eventually "borrow against it".

His framing assigns different roles to two assets. Bitcoin is the long-term holding that stays put, while stablecoins supply the liquidity that circulates, letting holders spend or transfer value without selling their coins. He argued that the speed at which assets can be converted gives an advantage to people who use this combination.

The model is familiar outside crypto. Property owners and equity investors have long borrowed against their assets to raise cash while keeping their exposure, and bitcoin-backed lending applies the same logic to a newer asset.

How these loans generally work

In a typical bitcoin-backed loan, the borrower pledges coins as collateral and receives dollars or stablecoins in return. Lenders usually advance only a fraction of the collateral's value, leaving a buffer against price swings. If bitcoin falls far enough, the borrower may need to add collateral or repay part of the loan, and the lender can sell the pledged coins if neither happens.

Tax is part of the appeal. In the US, borrowing against an asset is generally not treated as a taxable sale, whereas selling bitcoin that has risen in value can trigger capital gains tax. The article advised readers to consult a tax adviser rather than rely on that general principle.

Risks and open questions

Borrowing keeps exposure to bitcoin but adds an obligation. A borrower still owes the debt if the collateral loses value, and a sharp fall can force a sale at an unfavourable price, the outcome the holder was trying to avoid in the first place.

Pledging coins also introduces counterparty risk. The borrower depends on the lender's custody arrangements and financial health to get the collateral back once the loan is repaid.

Taking the proceeds in stablecoins rather than bank dollars adds a further layer. The borrower then relies on the stablecoin holding its peg, which in turn depends on the issuer's reserves and redemption arrangements.

Albright acknowledged that wider adoption depends on education, both about bitcoin itself and about how borrowing against it works. SALT Lending says it has made that education part of its own efforts.

What to watch

Whether his forecast is borne out will depend on how comfortable long-term holders become with the trade-off between liquidity and leverage, and on how lenders manage collateral through periods of volatility. The spread of stablecoins as a payment and settlement tool is another variable, since they are central to the model he describes.

For now, the expectation that a rising share of holders will borrow rather than sell is a forecast from a company that would benefit if it proved correct.