Bybit Expands Borrowing Capacity with Collateral Recognition Ratio Update

Bybit is expanding borrowing capacity for users with large crypto holdings by raising the collateral recognition ratio across supported assets in its Unified Trading Account (UTA) loan product.

This move aims to increase effective leverage for high-balance traders and institutions. Bybit says the change will benefit users who hold concentrated positions, particularly those whose borrowing power was previously capped once their holdings crossed preset thresholds.

Under the prior framework, when a user's balance of a single collateral asset exceeded a certain level, the portion above that threshold could see its collateral recognition rate fall to zero. This created a 'cliff effect,' where borrowing capacity would abruptly drop after reaching a certain threshold.

The updated model removes this cliff effect by assigning non-zero recognition rates, roughly between 10% and 80%, depending on the asset, even in the highest tier. Bybit says this change effectively lifts the upper bound on usable collateral for large single-asset holders, allowing them to deploy a greater share of their inventory for financing and trading purposes.