English (en)

Today Debifi and Sygnum launch MultiSYG. Sygnum clients can now borrow against their bitcoin while the collateral sits in multisig, and they hold a key themselves.

Sygnum is also the first bank on the Debifi API. That is the part of this news we are most excited about, and we explain why below.

## Why now

The past year was hard on bitcoin security. Again and again, one secret was enough to empty a wallet: a leaked seed, a weak key, a single point of failure.

At the same time, more holders want to borrow against their bitcoin instead of selling it. Until now, doing that at a bank usually meant handing the coins over. MultiSYG gives them another option.

## How MultiSYG works

Each client's bitcoin sits in its own multisig wallet, with keys spread across the client, Sygnum Bank and independent keyholders, so one stolen or weak key is not enough to move it. The client can check the collateral on chain at any time, and a lost key can be recovered with the other keyholders.

### Each side does what it does best

Sygnum keeps the client and the terms: the relationship, the loan and the Swiss regulatory framework. Debifi runs everything that touches the bitcoin.

That split is the point. A bank does not have to become a bitcoin engineering company to offer bitcoin-backed lending in multisig. It plugs into infrastructure built for exactly that.

>"A year ago I said borrowers shouldn't need to trust a custodian blindly. This past year showed why, with one secret often being enough to empty a wallet. As borrowing against Bitcoin grows, MultiSYG gives clients a loan where one stolen or weak key is not sufficient to move their collateral."
>**Max Kei, Founder of Debifi**


>"Bitcoin pays no yield, and it is not meant to; it is a finite bearer asset, like gold. What holders want is somewhere to keep it safe and, increasingly, a regulated way to put part of it to work. MultiSYG technology is how Sygnum offers both."
>**Pascal Eberle, Chief of Staff and Co-Lead of Bitcoin@Sygnum**

### For other banks and fintechs

MultiSYG runs on the Debifi API, our infrastructure for banks and lending platforms. Sygnum is the first bank to use it.

With the API, you offer bitcoin-backed lending in multisig inside your own product. You keep the client, the brand, the pricing and the compliance perimeter. Debifi runs everything that touches the bitcoin, and the collateral never sits on your balance sheet.

Want to integrate bitcoin-backed loans in multisig into your own product? Get in touch with us!


Debifi and Sygnum launch MultiSYG for Bitcoin-backed lending

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Debifi and Sygnum launch MultiSYG

Losing access to your Debifi app (for example, if you lose your mobile phone) or hardware wallet does not necessarily mean losing access to your Bitcoin. Debifi has thought over such a situation and provided the recovery function for your Debifi Bitcoin Vault.

During the setup of your Debifi Vault you have created the secret phrase which is essential for the recovery.

Debifi Vault uses a 2-of-3 multisignature architecture with three keys. Two of the three keys are required to authorize a transaction.

- **Key 1:** stored locally in the Debifi app on your phone

- **Key 2:** stored on your hardware wallet

- **Key 3:** generated and stored by Debifi as a backup key

The recovery process requires your remaining key and secret phrase for verification. Let’s see how this process works.

## When do you need to recover your Vault?

You may need to start the access-recovery process if you lose access to one of the keys associated with your vault.

This can happen if:

- you lose your phone and cannot access the Debifi app;
- your phone is damaged and the local app key is no longer available;
- you lose your hardware wallet;
- your hardware wallet is damaged or inaccessible.

If you lose your phone, contact Debifi support to begin an access-recovery request. If your hardware wallet is lost or damaged, you can start the recovery process right from the Debifi app. Check the detailed guide below.

## How Debifi Vault recovery works: step-by-step instructions

There are 2 ways to start the recovery process depending on which key you have lost.

**If you still have access to your mobile device,**

1. Open Debifi app.
2. Click on “Recovery” inside your vault:
![Recovery button for Debifi Bitcoin Vault](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/bitcoin_vault_recovery_button_a71f9f7d04.png)
5. In the next window you will get the main information about vault recovery. Click on “Start recovery”.
6. Put your secret phrase in the next step and request recovery.
![Put secret phrase and initiate Bitcoin vault recovery](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/put_secret_phrase_and_request_recovery_016185aa55.png)
8. After your secret phrase is verified, your recovery request will be reviewed by the Debifi support team.


**If you have lost your mobile device or access to the Debifi app,**

1. Create new vault
2. Contact Debifi support under <support@debifi.com> to begin an access-recovery request and provide your secret phrase that you have set up during your vault creation for verification as well as the address to which your bitcoin should be transferred during the recovery.
3. Then the review process will start.

NOTE: If you forgot your secret phrase, you cannot recover your vault through the recovery process. 


**Review process**

Debifi support will verify your recovery request.
The review process will take some time. 

Once the verification is successfully completed, a recovery transaction is created using the Bitcoin address you provide through email or in the Debifi app. 
The transaction is then signed as part of the recovery process. 

Then the recovery request enters the mandatory security waiting period.
This mandatory seven-day security delay adds an additional layer of protection against unauthorized recovery requests.

This means that access recovery is **not immediate**. You should allow seven days for the security delay after the transaction is signed before the recovery transaction can be completed. 


**Moving BTC to another address**

For recovery, you need to have your **remaining key** available. 

Which key is this, depends on what you have lost:

- If you lose access to your **phone**, your hardware wallet key remains available.
- If you lose your **hardware wallet**, your Debifi app key remains available.

If you lose both of the keys, the recovery will not be possible.

Your left key will be needed to sign the transaction for sending BTC from your old vault to the provided BTC address confirmed in your account.

Transaction signing depends on which key was lost:

- If the phone was lost (Key 1 lost): the transaction is sent to you via email, and you should sign it with your hardware wallet key

- If the hardware wallet was lost (Key 2 lost): the transaction is signed manually on your account via the Debifi app:
![Sign recovery transaction in Debifi app](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/sign_recovery_transaction_ff7f1c4dc1.png)

Transactions are automatically signed by Debifi after 7 days of providing user signatures.

Once the mandatory seven-day security delay has passed, Debifi can use its backup key to help complete the recovery transaction.

The backup key is the third key in your vault's 2-of-3 multisignature setup. Together with your remaining key, it provides the two keys required to authorize the recovery transaction. 

All the BTC amount from the old vault will be transferred to the provided BTC address. 

### Important things to remember

Your Debifi Vault is designed so that no single key is sufficient to authorize a Bitcoin transaction.

However, your ability to recover access depends on keeping the information and keys required for recovery available.

Remember these three things:

**1. Keep your secret phrase safe.**

It is required for recovery verification.

**2. Keep access to at least one of your keys.**

The remaining key is required for the standard access-recovery process and signing the transfer transaction.

**3. Contact Debifi support if you lose your phone or hardware wallet.**

The recovery process includes verification and a mandatory seven-day security delay before the Debifi backup key can be used to help complete the recovery transaction.


Recovery is designed to provide an additional path back to your vault without giving Debifi unilateral control over your Bitcoin.

Debifi Bitcoin Vault recovery process cover image

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How to recover your Debifi Bitcoin Vault

Debifi Vault is a non-custodial Bitcoin vault designed to help you securely store and manage your Bitcoin while keeping control of your funds. 

## What is a Bitcoin vault?

A Bitcoin vault is a secure way to store and manage Bitcoin while adding extra protection against losing or compromising a single private key. Unlike a regular Bitcoin wallet, a multisignature vault can require multiple keys to authorize a transaction. This means that one lost, stolen, or compromised key is not enough to move the Bitcoin. A vault can be used for long-term storage while still allowing you to receive, send, and manage your BTC when needed.

## Is Bitcoin vault safe?

When choosing where to store your Bitcoin, the main question is about safety and how your funds are protected: “is Bitcoin vault safe where my Bitcoin would be stored”?

So, is Debifi Bitcoin Vault safe? How does the Debifi Vault protect your Bitcoin?
The Debifi Vault uses a **2-of-3 multisignature** setup, which means that two out of three keys are required to authorize a transaction. No single key can move your Bitcoin on its own.

The three keys are:

**App key** — stored on your mobile device in the Debifi app.

**Hardware wallet key** — stored on your supported hardware wallet. (During vault setup, you connect a supported hardware wallet and add its public key to the vault.)

**Debifi backup key** — securely stored by Debifi.

Debifi cannot use the backup key on its own to move your Bitcoin. It is one of the three keys in the 2-of-3 setup and is used as part of specific processes, such as recovery.

This setup means that losing or compromising one key does not automatically give someone control over your Bitcoin. It also gives you a recovery option if you lose access to one of your keys.

Debifi Vault currently supports Trezor hardware wallets. Support for BitBox is coming soon - already in Q4!

Moreover, you will create a secret phrase during the setup of your Debifi Vault. You need to keep it safe and remember it, as it is required to verify your identity during the Vault recovery process. This secret phrase will be also stored securely by Debifi and used strictly for the verification.

## How to create the Debifi Vault?

[Learn how to set up your Debifi Vault](/blog/en/how-to-create-bitcoin-vault) in our separate step-by-step guide.

## What can you do with a Debifi Bitcoin Vault?

Your Bitcoin vault is designed for secure long-term storage and everyday management of your BTC.

You can use it to:

- receive Bitcoin
- store your Bitcoin
- send Bitcoin
- use your Bitcoin as collateral for a Debifi loan

You can also
- view your transaction history
- check balances

The Vault is designed to keep your Bitcoin under your control while adding an extra layer of protection through multisignature security.

## How Bitcoin vault works

To hide your balance, click the eye icon: 
![Hide balance in Bitcoin vault](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/privacy_mode_hide_balance_0eae9d5b4e.png)

Click a transaction to view its details. Click “Close” to return to your vault:
![Check transaction details in Bitcoin vault](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/bitcoin_vault_transaction_details_38982ee417.png)

### How do you receive Bitcoin?

You can receive Bitcoin directly into your Debifi Vault.

Open your Vault in the Debifi app and use your receiving address to send BTC to the Vault. Click the “Receive”-button to see your address and QR code.

One vault means one constant Bitcoin address.

Once the transaction is confirmed on the Bitcoin network, the BTC becomes available in your vault. 

### How do you store Bitcoin in the Vault?

Once your Bitcoin is in the vault, it is protected by the 2-of-3 multisignature setup.

Your BTC is not controlled by a single private key. Instead, two of the three keys are required to authorize a transaction. This reduces the risk associated with losing or compromising a single key.

You can keep Bitcoin in your vault for as long as you want and manage it through the Debifi app.

### How to send Bitcoin from your Vault?

You can send bitcoin from your vault to another Bitcoin address.

To send bitcoin, click the “Withdraw” button.
![How to withdraw Bitcoin](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/how_to_withdraw_bitcoin_9a28c44a15.png)

In the next step enter the destination address and amount, choose the currency and click “Continue”:
![Withdraw Bitcoin](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/withdraw_bitcoin_8471693987.png)

Follow the signing process. Because the vault uses 2-of-3 multisignature security, two keys are required to authorize the transaction. Sign the transaction by clicking “Sign & send” to send BTC.
![How to send bitcoin](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/how_to_send_bitcoin_a29c77d4d0.png)

### How to recover the Vault if one of the keys is lost?

Because the Vault uses a 2-of-3 setup, losing one key does not automatically mean losing your Bitcoin.

If you lose access to your hardware wallet or phone, you can use the Vault recovery process.

For example, if you lose your hardware wallet but still have your app key and secret phrase, you can start the recovery process in the Debifi app and move your Bitcoin to a new BTC address.

The recovery process includes a security review, transaction signing, and a mandatory seven-day security delay before the recovery transaction can be completed.

If you lose access to your phone, a separate recovery process is available through Debifi support.
If you lose access to both your hardware wallet and your app key, you will no longer be able to restore your vault.

If you have forgotten or lost your secret phrase, unfortunately, you will not be able to recover your vault. The secret phrase is an essential part of the recovery process if you have lost one of your keys. You should always keep your secret phrase secure. 

Find more about the recovery function in our article: [How to recover your Debifi Bitcoin Vault](/blog/en/debifi-bitcoin-vault-recovery)


## How to close the Debifi Vault?

To close your Debifi Vault you need to send all BTC amounts to another Bitcoin address so that your Vault balance is zero. 
To close the Vault, click the three dots in the upper-right corner and then select “Close vault”:
![How to close Bitcoin vault](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/close_vault_caf45a833c.png)

Enter your PIN to confirm. Your Vault is now closed.
![Debifi Bitcoin Vault is closed successfully](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/vault_closed_successfully_92735ea11d.png)



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Debifi Vault: how Bitcoin Vault works

Lugano, here we come! On 23 and 24 October the Debifi team will be at Plan ₿ Forum. Two days, one stand, and one subject we never get tired of: multisig.

**When:** 23-24 October 2026 
**Where:** Plan ₿ Forum, Lugano, Switzerland 
**Our stand:** 105, next to Sygnum

## Why we are talking about multisig

After last year's hacks, security is what bitcoiners ask us about most. Multisig is our answer to that question, and it is what Debifi is built on. So we made our whole stand about it. You can try it, play it, and ask us anything about it.

## Find us at stand 105

We are at stand 105, right next to Sygnum. The whole team will be there both days, so come and put faces to the names.

### What is happening at the stand

**Try our platform.** Go through the full flow of the loan, with us next to you. It takes 30 to 40 minutes, [so please book a slot](https://debifi.com/events/plan-b-lugano-2026).

**Get 15 minutes with the team.** Bring your questions about borrowing, lending, Vault or the API. [Book a slot, or just drop by](https://debifi.com/events/plan-b-lugano-2026).

**Play multisig.** Pick up a card with four keys at our stand. Collect a stamp for each key around the forum, bring the full card back to us, and you are in the draw for one of three Trezor Safe 7 hardware wallets. We pick the winners at random on 24 October.

**Or just say hello.** Even five minutes is enough to meet us.

### We would love to meet you

Whether you are thinking about borrowing against your bitcoin, lending, building lending into your own product, or connecting an AI agent to your loan book, come and tell us what you are working on.

## Cannot make it to Lugano?

[Leave your email on the event page](https://debifi.com/events/plan-b-lugano-2026) and we will send you a PDF on how Debifi works, plus a discount code for your first two loans. About a week after the forum, we will publish a write-up of the two days, with photos and what people asked us most.

[See you in Lugano!](https://debifi.com/events/plan-b-lugano-2026) 

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Let's talk multisig in Lugano

A Bitcoin-backed lending API lets a business connect its own product or operations system to a lending workflow. Instead of moving between a dashboard, spreadsheets, and internal tools, an approved integrator can manage offers, contracts and repayments in one controlled environment.

## Build a Bitcoin lending experience

A business can use the Debifi Bitcoin lending API to create a borrower or lender portal that fits its own client journey.

It can show relevant offers, guide a client through contract creation, and keep contract status, repayment instructions, documents, and messages in one familiar interface. The API supports available-offer discovery and management of a business’s own offers.

That lets an institution build its own experience around Bitcoin-backed loans without building every lending and escrow workflow from zero.

## Build a treasury or lending desk

A fund, treasury team, or family office can build an internal console for managing liquidity and lending activity.

The console can help a team:
- set offer terms, APR, LTV, currency, and payment methods
- pause offers as liquidity and risk appetite change
- track contracts, rates, notifications, payment details, and account settings

This can reduce repeated manual handoffs while supporting role-based permissions and IP allowlisting.

## Build operations around the full loan lifecycle

A Bitcoin-backed loan is not simply “open” or “closed.” It moves through acceptance, any required identity verification, escrow creation, signing, deposit, payment, active loan management, repayment, and completion.

An integration can turn those stages into a clear operations queue. For example, it could use contract statuses, flags, and deadlines to identify contracts that may be waiting for a signature, payment confirmation, document, or repayment action.

The API does not provide a ready-made “next action” queue; the integrator defines that logic within its own product or operations workflow.

It can also support more complex situations. The API for lending includes extension requests and an extension calculator, allowing a lender’s credit or operations team to review extension requests and propose new terms, such as LTV or APR, or reject the request. The borrower can then accept or decline the proposed terms.

## Connect reporting and reconciliation

Lending teams need more than a client-facing view. Finance, operations, and compliance teams need reliable records.

The lending API provides access to contracts, payment and repayment transactions, attachments, chat messages, and notifications. An integrator can use those records in internal reporting, reconciliation, or case-management tools. This reduces manual copying and gives a team more context when reviewing a specific loan.

## Use webhooks for event-driven workflows

Where webhooks are enabled for an integration, they can notify a business when relevant contract events occur. This can help keep an internal system in sync without repeatedly polling for changes. A business could use webhook events to update an operations queue, trigger a reconciliation check, notify an authorized team member, or refresh a client-facing contract view.

Webhook configuration can include a destination URL, a webhook name, and an HMAC secret for verifying incoming event notifications.

## Built for controlled access

Institutional Bitcoin lending requires stronger access controls than a key stored securely in an application.

Debifi’s authentication flow combines a bearer session token with a client TLS certificate for most protected requests. Certificate-protected calls use a dedicated secure domain, and both session tokens and client certificates are rotated regularly.

In simple terms: an integration has more than one proof of identity, and protected actions are tied to a secured client connection. That gives businesses a foundation for building internal controls around lending activity.

## Start with one useful workflow

Start with a simple internal console that shows offers and active contracts, highlights the next required action, and gives authorized users a small set of carefully controlled actions. From there, a business can add a branded client portal, automated reporting, or deeper treasury workflows.

The Debifi Bitcoin-backed lending API is not just a way to retrieve data. It is Bitcoin lending infrastructure that lets a business make Bitcoin-backed loans part of its own product and operating model, while keeping contract, escrow, and risk workflows visible.


Bitcoin lending API connecting business software to Debifi infrastructure

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Bitcoin-Backed Lending API: What Can You Build With Debifi?

Artificial intelligence is changing the security landscape.

AI tools can help developers write, test, and improve software. But the same progress also gives attackers more capabilities. Tasks that once required deep technical knowledge, time, and manual effort can now be assisted by automated tools.

Attackers can use AI to study public information, create more convincing phishing attempts, identify weak patterns in software, and search for potential vulnerabilities at greater speed and scale. For financial platforms, this raises the bar.

The question is no longer only whether a system was secure when it launched. The question is whether it continues to be tested, reviewed, and improved as the product, the codebase, and the threat landscape evolve.

## Why one-time checks are not enough

Traditional security reviews remain important. Independent thinking, expert code review, and structured testing are essential parts of building reliable software, but modern threats do not stand still.

Every new feature, integration, or code change can introduce unexpected behaviour. Even a small issue may become meaningful if it affects authentication, permissions, financial logic, contract flows, notifications, or the way users interact with the platform. That is why security needs to be continuous.

It means treating every release as something to verify, not simply something to ship. It means testing code before deployment, reviewing changes from different perspectives, and responding quickly when a potential weakness is found.

## AI changes both sides of security

AI is making vulnerability discovery more accessible. A determined attacker may use automated tools to examine a large amount of code, look for common mistakes, generate possible attack paths, or prioritize areas that deserve closer attention. This makes it more important for security teams to work proactively rather than wait for an incident.

The positive side is that AI can also support defenders. Used responsibly, modern analysis tools can help teams identify suspicious patterns, review code more broadly, explore potential edge cases, and surface issues that deserve human investigation. AI does not replace security experts or careful engineering judgment. It can make their work faster, more systematic, and more resilient.

The goal is not to trust a model blindly. The goal is to use every appropriate tool to ask better security questions.

A useful example comes from Project Glasswing, Cloudflare’s work on AI-assisted vulnerability research. Its core idea is not that one model, prompt, or automated scan can secure a codebase. Instead, security work becomes a repeatable process: map the system, investigate specific attack paths, challenge potential findings, and escalate only the issues that survive validation.

This type of vulnerability discovery harness separates discovery from judgment. One process may identify a possible weakness; a separate validation step then checks the relevant code, paths, functions, and assumptions. The purpose is to reduce false positives and ensure that engineering attention is focused on issues that are real, relevant, and actionable.

The model should remain interchangeable. Different AI systems can spot different patterns and make different mistakes. Using independent analysis and validation helps avoid relying on one model’s perspective alone. Human security and engineering teams remain accountable for reviewing evidence, assessing impact, prioritizing remediation, and confirming the fix.

## Security is a process, not a promise

No responsible team can promise that complex software will never contain a bug. What a responsible team can do is build a process designed to catch issues early and reduce the impact of anything that is missed.

At Debifi, this means treating code quality and security as ongoing work. Changes are reviewed, core logic is tested, automated pipeline checks must pass, and QA verifies product behaviour before releases progress. Major releases move through controlled environments before production.

This layered approach matters because no single check is enough.

Automated tests can detect regressions. Code review can challenge assumptions. QA can test real user flows. Controlled environments can reveal issues before they affect production. Security analysis can help identify risks that require deeper investigation. Together, these controls make it harder for bugs and vulnerabilities to reach users.

A practical security workflow can be viewed in four connected stages:

• Recon: understand the architecture, sensitive flows, trust boundaries, dependencies, and likely threat vectors.

• Hunt: test defined attack classes and look for weaknesses in the areas where they could matter most.

• Validate: verify that a potential finding is technically sound, reproducible, and not merely a theoretical or duplicate alert.

• Fix and learn: remediate confirmed issues, test the change, and feed the lesson back into future reviews and automated checks.

This approach also improves resilience. Security investigations should not depend on one long-running AI session or a single person retaining every detail. Clear records of findings, validation evidence, remediation status, and follow-up tests help a team resume work, avoid duplication, and maintain continuity as the codebase evolves.

## Continuous improvement is the real standard

As AI tools become more capable, the standard for security must rise with them.

Debifi’s aim is not to rely on a one-time audit or a static checklist. It is to keep improving how the codebase is reviewed, tested, and assessed for potential vulnerabilities as new threats emerge.

That includes learning from new security research, strengthening testing practices, and using modern defensive tools where they add real value, always backed by careful human verification.

Project Glasswing reinforces a useful principle: the lasting value is not in a single AI model. It is in a disciplined vulnerability-management process that can adapt as tools, codebases, and threats change.

Security is never “finished.” It is a continuous commitment to review, test, question assumptions, fix issues quickly, and protect users as the digital environment changes.


AI security and continuous vulnerability testing

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Security evolving

Bitcoin had a challenging second quarter of 2026.

At first glance, the market story seems simple: a short recovery in April followed by increasing pressure and a confirmed bear market by June. But price charts only show part of the picture.

Looking deeper into Bitcoin-backed lending activity on Debifi reveals a different trend: users are becoming more focused on disciplined risk management, long-term positioning, and the original principles of Bitcoin — transparency, and control over your assets.

Let’s look at what happened during Q2 2026 and what it means for Bitcoin-backed liquidity.


## April: Positive Momentum and Strategic Positioning

April started with renewed optimism.

After five months of mostly sideways movement, Bitcoin finally broke higher and closed the month at **$76,308**, gaining **11.87%**.

At Debifi, users responded to the improving market conditions.

Average borrowing costs decreased significantly, reaching **10.42% APR**, a drop of **310 basis points** compared to five months earlier.

Lower borrowing costs encouraged users to secure longer-term liquidity. Average loan duration increased to **13.47 months**, showing that borrowers were looking beyond short-term market movements.

At the same time, average Loan-to-Value (LTV) remained conservative at **66.84%**.

This demonstrated that borrowers were maintaining a healthy buffer instead of maximizing their available borrowing capacity.

## May: Lower Rates and Strong Risk Discipline

May brought a period of consolidation.

Bitcoin declined approximately **3%**, closing the month at **$73,621**. Although the price briefly reached **$82,850**, it failed multiple times to break above the important 200-week moving average.

Historically, repeated failures at major resistance levels often indicate that the market needs more time to build a stronger foundation.

Despite weaker price momentum, borrowing conditions continued improving.

Debifi reached a major milestone as average borrowing rates dropped below **10% for the first time**, reaching **9.9% APR**.

These conditions allowed users to unlock liquidity without selling their Bitcoin while maintaining responsible collateral management.

Average LTV remained stable at **65.45%**, showing that users continued prioritizing risk control even during uncertain market conditions.

## June: Bear Market Arrives, But Lending Behavior Changes

June brought a much sharper market correction.

Bitcoin declined **20.5%**, closing the month at **$58,545** and falling below the important $60,000 level.

After several attempts to reclaim the 200-week moving average, Bitcoin eventually moved below this key technical indicator, confirming a bear market environment.

For many Bitcoin users, June also brought back memories of previous market cycles.

In June 2022, [Celsius collapsed after freezing customer withdrawals](https://www.theguardian.com/technology/2022/jun/13/crypto-lender-celsius-network-halts-withdrawals-extreme-market-conditions), which highlighted the risks of centralized lending platforms that use customer collateral as their own balance-sheet asset.

However, the behavior of Debifi users during this market decline showed a different approach.

Despite Bitcoin dropping more than 20% in June, average LTV increased only slightly: from **66.84% to 68.4%**.

This indicates that borrowers were actively monitoring their positions and [managing their collateral](/blog/en/smart-loan-management) responsibly.

At the same time:

- loan demand increased,
- average borrowing rates moved back to **10.28%**,
- and average loan duration reached a new record of **13.48 months**.

Instead of reacting emotionally to market volatility, users continued using Bitcoin-backed lending as a long-term liquidity tool.

## What Q2 Shows About Bitcoin Lending

The second quarter of 2026 highlighted an important shift.

Despite increasing market volatility, borrowers continued to manage their loan positions conservatively. Stable LTV levels, longer loan durations, and relatively consistent borrowing costs suggest that many users remained focused on long-term planning rather than reacting to short-term price movements. 


**To provide additional flexibility for borrowers**, Debifi introduced [a new feature allowing users to renegotiate their loan timeframe](/blog/en/contract-extension) when a contract reaches maturity instead of closing an existing loan contract and creating a new one.

This provides additional flexibility for long-term Bitcoin holders who want to maintain liquidity without unnecessary disruption.

### Bear Markets Build Stronger Foundations

Bear markets create opportunities for smarter risk management and stronger infrastructure.

Q2 2026 showed a growing focus on responsible borrowing, disciplined LTV management, and long-term capital efficiency. Dedicated Bitcoin holders are using this period to activate their capital without giving up ownership of their BTC.

Bitcoin lending market analysis for Q2 2026 bear market

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Bitcoin in Q2 2026: Smarter Lending in a Bear Market

Following June's sharp drawdown, Bitcoin staged a modest recovery in July, opening the month at **$58,545** and closing at **$62,750**, representing a **7.27%** monthly gain. At the same time, 30-day volatility declined significantly, dropping from **42%** in June to **31%**, as market conditions stabilized after the previous month's heightened turbulence. This moderation in volatility points to a healthier and more balanced trading environment.

On the lending side, Debifi's metrics showed only modest changes. The average loan duration edged down slightly to **12.76** months, reflecting a stable preference for medium to long-term financing. Borrowing costs continued to ease, with the average Annual Percentage Rate (APR) declining to **10.11%**, reinforcing the attractive financing conditions available on the platform.

The average Loan-to-Value (LTV) ratio also decreased to **64.12%**, indicating a slightly more conservative lending environment. Overall, July's figures reflect a healthy and balanced market, with borrowers continuing to benefit from favorable financing conditions while maintaining prudent leverage levels.

_**Sources:** Debifi open loan offers, The Block, TradingView & BitBox._

<hr>

## Test Bitcoin-Backed Lending for Just $50!

Experience Debifi’s non-custodial workflow with zero stress before committing larger funds.

[Try out the $50 demo offer here.](/blog/en/50-dollar-demo-loan-offer)

<hr>
 

## July 2026 Overview

Following June's correction, July brought a welcome period of stabilization. Bitcoin recovered 7% over the month while volatility eased considerably, allowing market participants to shift their attention away from short-term price swings and back toward long-term capital management. This effect is evident in the **decrease of the average LTV from around 68.4% to 64.12%**, demonstrating our clients' proactive portfolio management.

At Debifi, we believe that one of the most important decisions for anyone using Bitcoin-backed loans is selecting the appropriate Loan-to-Value (LTV) ratio. While many lending platforms advertise high maximum LTVs, experienced Bitcoin holders increasingly recognize that borrowing the maximum available amount rarely represents the optimal strategy.

For long-term investors, the objective is not to maximize leverage but to unlock liquidity while preserving ownership of their Bitcoin. A conservative LTV provides a significant safety buffer against Bitcoin's natural volatility, reducing both the likelihood of margin calls and the need to actively manage collateral during periods of market stress.

This philosophy is increasingly reflected in borrower behavior. Family offices, entrepreneurs, and high-net-worth individuals generally favor initial **LTV ratios between 20% and 35%**, prioritizing capital preservation over maximum borrowing power. While higher LTVs offer greater immediate liquidity, they also expose borrowers to substantially greater liquidation risk during sharp market corrections. You will find more info on how to manage your LTV [in this article](/blog/en/typical-ltv-for-bitcoin-backed-loans-2026). 

At Debifi, we observe the same long-term mindset. Although our marketplace offers flexible lending conditions, borrowers continue to actively monitor their positions and maintain prudent leverage levels, as reflected by the slight decline in the average LTV during July. Combined with our non-custodial multisignature model and strict no-rehypothecation policy, this conservative approach allows Bitcoin holders to access liquidity without compromising the security of their most valuable asset.

**In Bitcoin-backed lending, the best loan is not necessarily the largest one. It is the one that allows you to sleep well at night, knowing that your Bitcoin remains protected while continuing to work for you.**

> :bulb: **Tip:** **Curious about Bitcoin-backed lending but hesitant to take your first loan?**
>
>We’ve introduced a **$50 Demo Loan Offer** on Debifi so you can experience our full non-custodial workflow firsthand from accepting a contract to depositing BTC collateral into multisig escrow and completing repayment.
>
>Running on our main platform with real Bitcoin, this low-friction offer gives you total peace of mind and complete familiarity with the interface before committing larger funds. 
>
>[Try out the $50 demo offer here](/blog/en/50-dollar-demo-loan-offer) and see how seamless non-custodial lending can be!

Bitcoin and Debifi lending snapshot for July 2026

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Debifi & Bitcoin Snapshot for July 2026

[Debifi ](https://debifi.com)is a non-custodial lending platform where you can borrow against your bitcoin without selling it. Your bitcoin stays secure in a multisig escrow while you get instant liquidity.

Here's how it works, and how to get your first loan.

## How It Works

When you take out a loan, your bitcoin goes into a 3-of-4 multisig escrow. This means no single party controls your collateral—it's locked specifically for your loan and can only be released when you repay or if there's a default.

The Debifi app handles everything: signing transactions, managing the escrow, and coordinating loan repayment. When you repay the loan, you get your bitcoin back.

## Getting Started: 6 Steps

### Step 1: Download the App
![Step 1](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/step1_9b8d036b42.jpg)

Head to debifi.com/app and download the Android app. Create an account with your email, then set up a strong PIN and enable Two-Factor Authentication (2FA).

### Step 2: Back Up Your Seed Phrase
![Step 2](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/step2_7887fe6916.jpg)

Write down your 12-word seed phrase on paper and store it somewhere safe. This is the only way to recover your account if something goes wrong. Don't skip this step.

### Step 3: Link Your Device
![Step 3](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/step3_421191acec.jpg)

Use your 2FA code to link the app to your account. This connects your phone to Debifi's web platform so you can browse loans and manage your account.

### Step 4: Browse Loan Offers

Go to https://debifi.com/offers and check out available loans. You'll see different terms, rates, and amounts from institutional lenders.

### Step 5: Sign the Loan
![Step 5 ](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/step5_da752c65c5.jpeg)

Found a loan you want? Open the app and sign the contract. The app will generate your public keys and set up the multisig escrow for your collateral.

### Step 6: Deposit and Get Paid
![Step 6 ](https://zr5pqljgeynt.compat.objectstorage.eu-zurich-1.oraclecloud.com/blog-production-mainnet/step6_f67afb62af.jpg)
Send your bitcoin to the multisig escrow address. Once the deposit confirms, the lender sends your loan funds to your chosen address. Done.

That's it. Debifi lets you put your bitcoin to work without giving it up. If you've been sitting on bitcoin but need cash, this is one way to have both.

Download the app at debifi.com/app to get started.


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 How to Get Started with Debifi

## When Adding Collateral or Repaying Your Loan Partially Makes Sense

Forced liquidation is one of the few moments in a loan’s lifecycle where events can escalate quickly and usually against your interests.

For those using Bitcoin-backed loans to access liquidity without selling long term holdings, understanding how liquidation works and learning how to actively manage risk is crucial.

In a previous piece, we explored what forced liquidation is, how it functions, and why it exists in collateralized lending. If you haven’t checked it out yet, it’s worth a read:

 👉 [*Forced Liquidation: What It Is and Why It Happens*](https://debifi.com/blog/en/forced-liquidation?utm_source=blog&utm_medium=blog_post&utm_campaign=froced_liquidation)

In this follow up, we’ll focus on two practical steps borrowers can take to avoid liquidation altogether:

- Adding more collateral to the loan  
- Partially repaying the loan

Both are simple in concept, yet highly effective when used thoughtfully.

## A Quick Recap: What does liquidation mean?

Forced liquidation happens when your collateral value falls below a predefined threshold relative to your outstanding loan.

At this point, portions of your collateral may be automatically sold to protect the lender and maintain loan stability. While this mechanism is essential for any collateralized lending system, it tends to trigger during periods of high volatility \- precisely when borrowers would prefer not to be forced sellers.

The goal isn’t to “outsmart” the liquidation mechanics. It’s to stay comfortably clear of them. And that’s where active loan management comes in.

## When Does It Make Sense to Add More Collateral?

Adding collateral boosts the safety buffer of your loan by improving your loan-to-value (LTV) ratio. This can be a smart move when:

- **Market volatility rises:** Sharp downward swings can push LTVs closer to liquidation thresholds faster than anticipated.
- **Your loan is long-term by design:** If your plan is to hold both Bitcoin and your loan over an extended period, adding collateral reduces the need for constant monitoring.
- **You prefer peace of mind over hyper-optimization:** A slightly overcollateralized position often beats one that demands constant attention.

For many Debifi users, this follows a simple principle:

*Preserve first. Optimize second.*

## When Does Partial Repayment Make Sense?

Partially repaying your loan lowers the outstanding principal, which reduces your LTV without altering your collateral position. This approach can be ideal when:

- **You have excess liquidity:** Paying down part of the loan may be more efficient than letting capital sit idle elsewhere.
- **You want to reduce risk without adding more collateral:** Particularly relevant if your Bitcoin is spread across multiple wallets or governance setups.
- **You’re approaching a critical LTV level:** Even a modest repayment can meaningfully expand your margin of safety.

Partial repayment is usually tactical \- not a way to exit a loan, but a method to rebalance it.

## Adding Collateral vs. Repaying the Loan: How to Weigh the Options

Both strategies achieve the same ultimate goal: lowering your effective LTV. The difference is simply which resource you’re willing to deploy:
- **Adding collateral** (Bitcoin) is best for: maintaining loan size
- **Partial repayment** (Fiat/Stablecoin) is best for: reducing leverage

There’s no universally “better” option, only what aligns with your structure, liquidity needs, and risk tolerance.

## How to Add Collateral or Partially Repay a loan on Debifi

Debifi makes both actions transparent and fully borrower controlled:

- **Adding collateral:** Increase your collateral within your existing loan, improving your LTV without altering loan terms, by simply sending an onchain transaction to the escrow address.
- **Partially repaying your loan:** Reduce your outstanding principal at any time, lowering leverage while keeping the loan active, by sending the funds to the provided payment details of the lender.

No hidden mechanics, no yield tricks, just straightforward ways to adjust your position.

## Final Thought: Risk Management Is a Feature, Not a Reaction

Forced liquidation isn’t a failure \- it’s a safeguard.

The most resilient borrowers, however, treat liquidation thresholds as levels to never approach, rather than crises to manage at the last minute.

Adding collateral or partially repaying the loan isn’t an emergency measure. It’s a proactive strategy for long-term holders who want liquidity without relinquishing control.

If your priority is preserving capital, maintaining reputation, and building structures you don’t have to constantly monitor, proactive loan management isn’t optional. It's essential.

Debifi Blog