How do you calculate loan to value in the cryptocurrency market?

1 answers

• Bengtson BoyetteJun 18, 2025 · 3 months ago
  In the cryptocurrency market, loan to value (LTV) is calculated by dividing the loan amount by the value of the collateral. The loan amount is the sum of money borrowed, and the collateral value is the estimated worth of the assets used as security. The resulting ratio represents the percentage of the loan amount compared to the collateral value. Lenders use the LTV ratio to assess the risk of the loan and determine the maximum amount they are willing to lend. It's important to note that different lenders may have different LTV requirements based on their risk appetite and the type of collateral. Therefore, it's crucial to understand the LTV ratio and the specific requirements of each lender before applying for a loan.
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