Crypto-Backed Loans Surge 74% as BlackRock Cuts IBIT Entry Threshold to $1M

TLDR

• Retail borrowers averaged 53.5 loans in 2026, marking a 74% surge from the 30.8 loans recorded in 2025.
• Bitcoin’s collateral share among wealthy users fell to 30.5% while Zcash advanced strongly to a 24.2% share.
• BlackRock cut IBIT’s in-kind Bitcoin conversion minimum by 96%, reducing the entry threshold to only $1M.
• IBIT has processed more than $5B in Bitcoin conversions while holding about 3.645% of total BTC supply.

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Crypto holders turned more often to loans backed by digital assets as market conditions weakened in 2026, according to research from CryptoQuant using CoinRabbit data. Retail users showed the sharpest increase, with average borrowing activity climbing 74% from the previous year. High-net-worth borrowers also increased loan use, while collateral choices shifted toward assets including Zcash.

At the same time, Bloomberg reported that BlackRock lowered the minimum for converting large Bitcoin holdings directly into shares of its iShares Bitcoin Trust ETF, or IBIT, expanding access to another way of retaining Bitcoin exposure without direct custody.

Retail Crypto Borrowing Climbs as Repeat Loans Increase

CryptoQuant found that retail users averaged 53.5 loans per borrower in 2026, up from 30.8 in 2025. That represented a 74% increase. High-net-worth users showed a smaller but still notable change, with their average number of loans rising 18% from 16.5 to 19.4. Crypto-backed lending allows holders to obtain cash without immediately selling their digital assets. 

Borrowers generally pledge more collateral than the loan amount because falling asset prices can create liquidation risks or trigger demands for additional collateral. Repeat borrowing also increased across CoinRabbit during the period analyzed by CryptoQuant. The share of users taking multiple loans rose from 61.9% to 65.1%.

Retail borrowers also waited longer between loans, averaging 21 days compared with 11 days previously. The report does not assign a single cause, but it records a clear rise in borrowing frequency across both major user groups.

Zcash Gains Share as Collateral Preferences Shift

Collateral composition changed alongside borrowing behavior. Among high-net-worth users, Bitcoin’s share of pledged assets fell sharply from 57.8% to 30.5%. Zcash reached 24.2% after failing to appear among the previous top 10 collateral assets. 

CryptoQuant linked part of that shift to Zcash’s price rally from about $50 in late 2025 toward $800. Monero, Chainlink, and Cardano also captured larger shares of high-net-worth collateral during the period. Retail borrowers continued to use XRP heavily, although its collateral share fell from 41.7% to 35.2%. Bitcoin remained close behind, while TRON, Stellar, BNB, Kaspa, and Velo also entered the retail collateral mix.

Trading preferences changed as well. Tether and Bitcoin retained the two largest positions by trading volume, while USD Coin moved into third place. Flare, Ether, and Ondo entered the top 10, while Solana, Stellar, and Shiba Inu dropped out.

Together, the CoinRabbit data tracked simultaneous changes in borrowing patterns, collateral selection, and trading activity. A separate shift has taken place among larger Bitcoin holders. Bloomberg reported on Aug. 25 that BlackRock cut the minimum size for converting Bitcoin directly into IBIT shares to $1 million in July.

The threshold had stood at $25 million when the in-kind conversion process first became available.  According to Robbie Mitchnick, BlackRock’s head of digital assets, the fund has processed more than $5 billion through these conversions, up from more than $3 billion when Bloomberg first reported the trend in October.

The process can take more than a week and allows holders to move Bitcoin from private wallets into a regulated fund while retaining price exposure. Mitchnick said concerns, including “kidnappings, ransom demands, and custody failures,” have encouraged some holders to make the switch.

Bloomberg also reported that Bitwise cut its own minimum from $100 million to $3 million. BlackRock’s 96% threshold reduction broadens access to family offices and wealthy individual holders. IBIT currently holds roughly 3.645% of Bitcoin’s total supply and lists net assets of $60.65 billion, while the more than $5 billion processed through its conversion service reflects growing use of the structure.

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Source: https://blockonomi.com/crypto-backed-loans-surge-74-as-blackrock-cuts-ibit-entry-threshold-to-1m/