Collateral

Collateral is the crypto you lock up to back a loan instead of selling it. With a credit-style crypto card, your coins sit as collateral while you spend a credit line drawn against them — you keep the upside (and downside) of the crypto, and you owe the borrowed amount back.

Why it matters: pledging collateral is what lets a card spend “without selling,” which can defer a taxable sale and keep you invested. The catch is that it’s a loan against a moving asset. If your collateral’s price drops far enough, your loan-to-value climbs until the issuer sells some of it to cover the debt — a liquidation you didn’t choose. So the same coins that fund your spending are also the coins at risk.

For example: the Nexo Card in Credit Mode spends a crypto-backed credit line — your BTC or ETH stays as collateral at up to roughly 50% LTV, and Nexo can start selling it if your LTV climbs to about 83.3%. ether.fi Cash in Borrow Mode works the same way, with per-asset rules: weETH posted as collateral lets you borrow up to a 55% LTV before a 75% liquidation threshold. Both as of June 2026.