What Happens If The Price of My Crypto Collateral Goes Down?
On the other side of things, if the value of your collateral significantly decreases, a crypto margin call may occur. Crypto margin calls are calculated based on the LTV (loan-to-value) rate outlined in your loan agreement (click here for more information about how LTV works). A margin call can happen when the value of your collateral drops, increasing the LTV of your loan.
In the event of a margin call, you will have to add more collateral to your account to maintain a healthy LTV ratio. The first margin call occurs at a 70% LTV. At this point, you have 72 hours to take action by posting additional collateral or paying down the loan balance. We will keep you informed if your LTV starts to near the 70% mark so you can take action preemptively.
If your LTV reaches the 80% mark, BlockFi will automatically sell a portion of your crypto collateral to bring your LTV back to a 70% LTV.