Bitcoin-backed lending offers HODLers a way to access liquidity without selling their Bitcoin. It’s gaining serious traction—and for good reason. At Firefish, we’ve seen this excitement firsthand. Just a year since our public release, and our platform surpassed 1,400 BTC in escrowed collateral.

But as the popularity of Bitcoin loans grows, so do the misconceptions. It’s time to set the record straight.

Here are five myths about Bitcoin-backed lending that deserve to be debunked.

Myth 1: Bitcoin-backed lending is just like traditional banking

Not quite.

Traditional loans come with cumbersome paperwork, credit checks, and slow approvals. Bitcoin-backed lending? It’s the opposite.

On Firefish:

• No credit checks

• Faster processing time

• Your Bitcoin is your collateral

You can even opt for an instant loans at a fixed rate.

And most importantly: you stay in control of your Bitcoin. Loans are non-custodial, settled peer-to-peer, and executed on-chain. It’s a trust-minimized process aligned with Bitcoin’s ethos of financial sovereignty.

Myth 2: You lose control of your Bitcoin when you take a loan

Not on Firefish.

This myth often comes from users familiar with centralized lending platforms where assets are rehypothecated or pooled into opaque systems. This, unfortunately, is the truth with some crypto lending platforms too.

On Firefish:

• Your Bitcoin is locked in on-chain escrow via multi-signature contracts

• You never give up your seed phrase or private keys

• Even in worst-case scenarios, you can recover your BTC using our pre-signed recovery transaction (we call it the "zombie apocalypse" feature)

That’s real control. That’s how non-custodial lending should be.

Myth 3: Liquidation happens all the time

Many assume Bitcoin’s volatility makes liquidation inevitable. But on Firefish, that’s simply not the case.

Here's how:

• Our initial Loan-to-Value (LTV) is set at 50%. What this means, is, if you want a loan of €10000, you need to provide €20000 worth of Bitcoin as collateral.

• Liquidation only triggers at 95% LTV.

Firefish has a 0% liquidation rate across $100M+ in transaction volume.

Even if you borrowed at Bitcoin’s all-time high of $110,000, the price would need to drop 47% before triggering liquidation. Most users choose to top up or repay early, keeping their loans healthy.

Myth 4: Bitcoin-backed lending is only for risk-takers

That’s what traditional finance wants you to believe.

But in reality, Bitcoin-backed loans are a strategic tool for many types of users:

• Long-term HODLers needing liquidity

• Investors avoiding capital gains tax

• Miners managing cash flow

Firefish is built for all of them, with a P2P marketplace, fixed interest rates, and high collateral thresholds that reduce risk.

It’s not about risk. It’s about control.

Myth 5: It’s too complicated

Not true. At Firefish, we’ve worked hard to make Bitcoin-backed lending accessible to everyone. Like we say, It's so easy, even mums use it.

Here’s what makes it simple:

• Real-time Collateral Health Indicator (CHI)

• Transparent loan terms

• No private key sharing

This is evidenced in 14,000+ users onboarded globally on Firefish.

If you know how to HODL, you know enough to get started.

We’re more than a platform—we’re a growing community of borrowers, lenders, and HODLers.

Ready to unlock the value of your Bitcoin—without selling?

Start here → https://firefish.io