Borrowed against my crypto instead of selling – here’s what actually happened

Had about $12k in ETH last year and needed $5k cash for an unexpected expense. Really didn't want to sell – ETH had already pulled back from its high and I was bullish longer term. Friend mentioned crypto-backed loans. Here's the full story including where it almost went sideways.

The mechanics: you put your crypto up as collateral, they lend you cash, you pay it back with interest, you keep your crypto throughout. LTV (loan-to-value) determines how much you can borrow. I borrowed $5k against $12k ETH – about 42% LTV. Kept the ratio low deliberately.

What I liked immediately: money in my account same day. No credit check, no bank interview, no explaining anything. Just KYC on the platform and done.

Where it got tense: two months in, ETH dropped about 20% in a few weeks. My LTV jumped from 42% to around 53% – still safe, but I was watching it more than I wanted to. Had I borrowed near the maximum LTV it would've been liquidation warning territory.

How it ended: ETH recovered and went above my entry point before I repaid. Total interest: around $180 over four months. If I'd sold the ETH to get the cash I'd have missed a 35% move. The math worked in my specific case – I know it doesn't always.

The platform I used was YouHodler – Swiss-regulated which mattered for the custody side. I used a 30-day loan rolled over twice; on 30-day terms the LTV ceiling is 90% though I stayed nowhere near that.

What I'd tell someone considering it: LTV buffer is everything. Don't borrow at 80–90% just because you can. Leave room to survive a 25–30% drop. The interest rate is secondary.

Would I do it again? Yeah, in the right situation. If I'm genuinely long-term bullish and have a specific short-term cash need, it's a real option. If I'm uncertain about the asset, I'd just sell. Has anyone else done this?