How to Get a Bitcoin-Backed Loan Without Selling: Battery Finance's Hybrid Approach

Most bitcoin holders face an uncomfortable choice when they need liquidity: sell your bitcoin and trigger a taxable event, or use it as collateral and risk liquidation if the price drops. Battery Finance, launched by Philadelphia-based Newmarket Capital in late 2024, is attempting a third path.

The pitch is straightforward: combine bitcoin with traditional real estate collateral to create loans that don't carry the liquidation triggers typical of crypto-backed lending. Whether this represents a genuine innovation or a niche product for a narrow audience depends on what you're trying to accomplish.

How Battery Finance Works

Traditional bitcoin-backed loans work like this: you deposit bitcoin, the lender gives you 40-70% of its value in cash, and if bitcoin's price falls below a certain threshold, they liquidate your collateral to protect themselves. It's efficient but unforgiving during volatility.

Battery Finance structures loans differently. Borrowers pledge bitcoin as just 10-30% of their total collateral, with the remaining 70-90% composed of income-producing real assets, typically commercial property. This hybrid structure allows the lender to eliminate mark-to-market liquidation triggers on the bitcoin portion because the underlying real estate provides sufficient security.

The first deal closed on November 7, 2024: a $12.5 million refinancing for Bank Street Court, a mixed-use apartment building in Philadelphia. Approximately 20 bitcoin served as partial collateral. By the time of reporting, that bitcoin had appreciated 30% in value.

The Terms

Battery Finance loans carry single-digit interest rates with 10-year maturities and zero prepayment penalties. Borrowers can repay at any time without penalty, which is notable given that many commercial real estate loans include yield maintenance provisions that make early payoff expensive.

The more interesting feature is the shared upside structure. When the bitcoin collateral appreciates over the loan's life, both borrower and lender participate in that gain. The vesting schedule incentivizes longer-term borrowing, aligned with bitcoin's four-year halving cycle. The earliest bitcoin wind-down occurs at four years.

Currently, Battery Finance targets $10-30 million loan sizes for commercial property acquisition and refinancing. The company has announced plans to expand into residential mortgages and vehicle financing, though those products aren't yet available.

Who This Is Actually For

Let's be clear about the target audience: this isn't a product for someone who owns half a bitcoin and wants to buy a car. Battery Finance requires borrowers who already have substantial traditional assets (commercial real estate) and meaningful bitcoin holdings they want to deploy without selling.

The value proposition works best for property owners who:

• Hold bitcoin they believe will appreciate long-term
• Need refinancing or acquisition capital
• Want to avoid capital gains taxes from selling bitcoin
• Can tolerate sharing some upside in exchange for no liquidation risk

This is institutional-adjacent lending, not consumer crypto borrowing.

How It Compares to Other Options

For those who don't have commercial real estate to pledge, traditional bitcoin-backed lending platforms remain the primary option. SALT Lending offers rates starting at 9.95% with up to 70% loan-to-value ratios. Ledn provides 50% LTV loans with no monthly payments during the term. Sovryn Zero, a DeFi protocol, offers 0% interest loans but requires 110% minimum collateralization.

These platforms serve different needs. If you need $10,000-$50,000 and can stomach liquidation risk during bitcoin drawdowns, a traditional crypto lender may work fine. If you're refinancing a $15 million apartment building and want your bitcoin to remain untouched during a 40% price correction, Battery Finance's structure makes more sense.

The tradeoff is giving up some upside. Traditional crypto loans let you keep 100% of bitcoin appreciation (assuming you're not liquidated). Battery Finance's shared appreciation model means you're paying for protection.

The Background

Newmarket Capital, founded by Andrew Hohns in 2020, manages alternative assets with a focus on real estate and infrastructure. Hohns previously oversaw more than $25 billion in infrastructure and impact financing credit strategy at Mariner Investment Group. He also serves as Director of FTAC Emerald Acquisitions Corp, which acquired Fold, a bitcoin rewards platform.

The company partnered with Ten31, a bitcoin-focused venture firm, to establish Battery Finance as a majority-owned subsidiary. This isn't a crypto-native startup; it's a traditional alternative asset manager incorporating bitcoin into existing lending structures.

What to Consider

The structure eliminates one risk (forced liquidation) while introducing others. You're tying bitcoin collateral to a specific property's performance and the lender's financial health over a potentially decade-long term. The shared appreciation model means your bitcoin's gains are partially clipped. And the complexity of hybrid collateral structures may create issues in scenarios the loan documents haven't anticipated.

There's also a philosophical question worth asking: if you believe bitcoin will appreciate substantially over 10 years, does it make sense to use it as collateral at all? You might be better off selling other assets, holding your bitcoin unencumbered, and refinancing conventionally.

Battery Finance's answer is that many borrowers want exposure to both real estate and bitcoin without choosing between them. For that specific situation, eliminating liquidation risk while maintaining bitcoin exposure has genuine value.

The Bigger Picture

Battery Finance represents an experiment in treating bitcoin as a long-term asset class rather than speculative collateral. Traditional crypto lending platforms treat bitcoin like a volatile commodity that requires constant monitoring and aggressive margin calls. This approach treats it more like an appreciating capital asset that can sit alongside real estate in a diversified collateral pool.

Whether this model scales depends on how bitcoin performs over full market cycles and whether the shared upside economics work for enough borrowers. One successful deal doesn't prove the concept; it just proves someone was willing to try it.

For bitcoin holders with substantial traditional assets who want liquidity without selling, Battery Finance offers a structure that didn't exist before. For everyone else, traditional options remain available, each with their own tradeoffs between cost, flexibility, and liquidation risk.