Borrow vs. Sell Your Crypto
Need cash from your crypto? You can sell — and pay capital-gains tax now — or borrow against it and keep your position. This tool estimates the tax you defer, the interest you pay, and the break-even point where selling becomes the cheaper move.
Your Situation
If you bought at $30k and it's worth $100k, ~70% of a sale is gain.
Leave at 0 to ignore upside. This is an assumption, not a forecast.
Over 2 years, to raise $50,000:
Selling looks cheaper — by $5,000
Borrowing costs about $12,000 in interest. Selling costs about $7,000 in capital-gains tax.
Cap-gains tax if you sell
$7,000
deferred by borrowing
Interest to borrow
$12,000
over the full term
Break-even hold time
14 mo
interest = tax saved
Upside you keep
—
appreciation not sold
Reading the break-even: at this rate, borrowing stays cheaper than selling for about 14 months on the tax math alone — the point where cumulative interest equals the $7,000 of capital-gains tax you'd have paid. Any appreciation you keep on the un-sold crypto pushes that break-even further out. The catch the math can't show: if your collateral is liquidated, the forced sale realizes the gain anyway. Borrow well below the max LTV.
Assumptions & limits: Uses simple interest and a flat capital-gains rate for a transparent estimate — it does not model loan amortization, compounding, state taxes, the net investment income tax beyond the 23.8% preset, platform fees, gas, or the tax impact of a forced liquidation. Capital-gains treatment depends on your holding period, income, and state. This is an educational estimate, not tax or investment advice. Confirm your rate and situation with a CPA. See the crypto tax estimator and how borrowing compares to selling.
How this calculator works
Selling appreciated crypto to raise cash realizes a capital gain, so you pay tax now and give up any future upside on what you sold. Borrowing against the same crypto isn't a sale — there's no taxable event to open the loan — so your only cost is interest, and you keep the position. This tool compares those two costs over the period you plan to hold the loan.
The break-even hold time is the month at which the interest you've paid equals the capital-gains tax you would have paid by selling. Before that point, borrowing is cheaper on the tax math; after it, selling may cost less — unless the appreciation you kept on the un-sold crypto makes up the difference.
The risk the math can't show
A break-even calculation assumes you hold the loan cleanly to term. The real risk of borrowing against crypto is liquidation: if your collateral falls far enough, the lender can sell it to cover the loan — a forced sale that realizes the exact capital gain you were trying to defer, at the worst possible time. The defense is to borrow well below the maximum loan-to-value. Model your liquidation price with the LTV & liquidation calculator.
Related resources
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