If you take a Bitcoin-backed loan, understanding margin calls isn’t optional. It’s the single most important risk to manage.
What Is a Margin Call?
A margin call happens when your loan-to-value (LTV) ratio rises above the lender’s threshold due to a decline in Bitcoin’s price.
Example:
– You borrow $50,000 CAD against $100,000 in Bitcoin (50% LTV)
– Bitcoin drops 40% → your collateral is now worth $60,000
– LTV rises to 83%
– DWM Canada’s margin call threshold: 80-90% LTV
– You receive a margin call
What Happens During a Margin Call?
When your LTV approaches the threshold, you’ll be notified and given options:
1. Add more Bitcoin collateral — deposit additional Bitcoin to bring LTV back to safe levels
2. Partially repay the loan — reduce the principal to lower your LTV
3. Do nothing — if the threshold is breached, DWM Canada may liquidate sufficient collateral to repay the loan
How to Avoid a Margin Call
Buffer at origination. DWM Canada lends at 50% LTV maximum. Borrowing below maximum gives you a larger price buffer. At 50% LTV, Bitcoin would need to drop 40-45% before you hit margin call territory.
Watch the price. Set price alerts. Know your liquidation price before you borrow.
Have a plan Before taking a loan, have additional Bitcoin or cash available to top up collateral if needed.
DWM Canada Margin Call Thresholds
| LTV Level | Status |
| Below 50% | Safe zone |
| 50-80% | Monitor closely |
| 80-90% | Margin call triggered |
| Above 90% | Liquidation risk |
New to Bitcoin? Before you can borrow against Bitcoin, you need to own it. Buy Bitcoin in Canada at 1Bitcoin.ca →
Ready to borrow? Apply at DWM Canada →
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DWM Canada | Bitcoin Custody & Lending