Bank of America Launches Bitcoin-Backed Credit A Major Step in Crypto Mainstream Adoption on December 11, 2025, Bank of America (@bofa ) the $1.7 trillion asset giant announced the launch of BTC-collateralized credit loans. This allows clients to use their #Bitcoin holdings as collateral to secure cash loans without selling their assets, marking a pivotal shift from crypto skepticism to institutional integration. It's part of a broader trend where eight of the top 10 U.S. banks, including BofA, JPMorgan, Citibank, and Wells Fargo, now offer similar Bitcoin-secured lending products. What This Means and How It Works Core Mechanics: Borrowers deposit Bitcoin into a BofA-managed custody account. The bank issues a loan (typically in USD) based on the BTC's value, with loan-to-value (LTV) ratios ranging from 50-70% to buffer against volatility. Interest rates are competitive at 4-6%, lower than many DeFi alternatives. If BTC's price drops sharply, triggering a liquidation threshold (e.g., LTV >80%), the bank can sell the collateral to cover the loan though BofA emphasizes risk-managed terms. Key Benefits for Users:Liquidity Without Selling: Unlock cash for investments, real estate, or spending while retaining BTC upside potential (no taxable sale event). Regulated Security: Unlike crypto-native platforms, BofA provides FDIC-insured custody and compliance with U.S. regs, reducing hack or insolvency risks. Tax Efficiency: Borrowing against assets often avoids capital gains taxes that come from selling BTC. Broader Market Impact: This elevates Bitcoin from "speculative" to a credit-grade asset, akin to stocks or real estate. Crypto loan volumes hit $150 billion annually in Q4 2025, with traditional banks capturing 40% of the market. It signals regulatory thaw post-2024 elections and Fed rate cuts, potentially spurring more hybrid products (e.g., ETH-collateralized loans).