Should you sell your Bitcoin when you need cash? Or is there a smarter way?
Let's look at the data.
The Cost of Selling
When you sell Bitcoin, you face:
- Capital gains tax - 15-20% (or more) depending on jurisdiction
- Lost upside - If BTC appreciates, you miss out
- Timing risk - You might sell at a local bottom
- Re-entry costs - Buying back means fees and potentially higher prices
The Borrowing Alternative
When you borrow against Bitcoin:
- No tax event - Loans aren't taxable income
- Keep exposure - Your BTC appreciates while collateralized
- Flexible timing - Repay when it suits you
- Keep your sats - They come back when you repay
Historical Analysis
Looking at Bitcoin's history:
| Scenario | Sell | Borrow |
|---|---|---|
| BTC goes up 50% | Miss gains | Keep gains |
| BTC goes down 20% | Avoided loss | May need to add collateral |
| BTC stays flat | Taxed anyway | Only pay interest |
In most scenarios, borrowing outperforms selling - especially during bull markets.
When Borrowing Makes Sense
- You need short-term liquidity
- You're bullish on Bitcoin long-term
- You want to avoid triggering taxes
- You have a plan to repay
Try It Yourself
Use our Sell vs Borrow Calculator to see the numbers for your specific situation.
Ready to borrow instead of sell? Get started.