As part of the strategic partnership with Summ, CoinRabbit team has prepared this educational article to break down one of the most widely used capital management strategies among high-net-worth investors and crypto whales: the Buy, Borrow, Die strategy. Walter Barett, Chief Strategy & Growth Officer at CoinRabbit, provides his expert perspective and explains how the strategy works in practice.

The Buy, Borrow, Die approach has long been used in traditional finance to preserve wealth, optimize taxes, and maintain exposure to appreciating assets. With the rise of crypto-backed lending, the same framework has become increasingly relevant for digital asset holders, making it accessible far beyond institutional circles.

Walter Barett, Chief Strategy & Growth Officer at CoinRabbit, explains:

“What we’re seeing today is a shift in how crypto investors think about liquidity. Instead of selling assets, more sophisticated holders are borrowing against their positions to stay flexible while keeping long-term exposure intact.”

Originally introduced by Professor Edward McCaffery of the University of Southern California, the Buy, Borrow, Die strategy is built on a simple principle: unrealized gains are not taxed, and loan proceeds are not treated as income. In the crypto ecosystem, this principle is amplified by 24/7 markets, instant loan approvals, and global access to capital. But how does it work in practice, why do crypto whales favor it, and what should be kept in mind when using this strategy?

What Is the Buy, Borrow, Die Strategy?

At its core, the Buy, Borrow, Die strategy is built around a simple but powerful idea: avoid selling appreciating assets whenever possible. Instead of realizing gains and triggering taxes, investors use their assets as collateral to access liquidity. It follows three basic steps:‍

1. Buy assets with long-term appreciation potential
2. Borrow against those assets when liquidity is needed, with flexibility to deploy funds across a wide range of purposes: from new investments and business ventures to real estate, vehicles, or personal expenditures
3. Hold the assets indefinitely

In traditional finance, this approach has been widely used with stocks, real estate, and private equity. In crypto, the same logic applies, but with faster execution, fewer intermediaries, and significantly lower barriers to entry.

Walter Barett notes:

“The key distinction many investors miss is that selling and borrowing are treated very differently from a tax perspective. Once this is understood, past misconceptions fall away, and borrowing against crypto becomes a strategic way to access capital while keeping investments intact.”

When an asset is sold, any gain is typically subject to capital gains tax. When an investor borrows against an asset, however, the loan proceeds are not considered taxable income in most jurisdictions. The underlying asset remains owned by the borrower and continues to participate in future price appreciation.

This distinction is what makes the Buy, Borrow, Die strategy so attractive, especially for investors sitting on large unrealized gains.

How the Buy, Borrow, Die Strategy Translates to Crypto

Crypto assets introduce several characteristics that make the Buy, Borrow, Die framework particularly effective:

• Highly liquid markets, operating 24/7
  
  
• Instant access to credit, often without credit checks
  
  
• Global collateral acceptance, independent of local banking systems
  
  

In practice, a crypto investor deposits assets as collateral on a lending platform and receives liquidity in stablecoins or fiat. Loan-to-value ratios range from 50% to 90%, allowing investors to be flexible and maintain a buffer against market volatility.

Crucially, the asset is not sold. Ownership remains with the borrower, and any future appreciation accrues to them, not the lender.

“What’s changed over the last few years,” Walter explains, “is that this strategy is no longer limited to institutions or early adopters. Crypto lending platforms have lowered the operational barrier, making these tools accessible to a much broader group of users. At CoinRabbit, we see this shift clearly and believe crypto-backed loans should be understandable and available to all investors, providing a reliable way to engage with digital capital.”

Building on this, investors don’t need to rely on a single liquidity event. They can keep their main holdings intact while using borrowed capital multiple times by refinancing, adjusting their positions, or putting the borrowed funds into new opportunities.

Why Tax Efficiency Sits at the Center of the Strategy

Most tax systems share two fundamental principles:

• Unrealized gains are not taxed
  
  
• Loan proceeds are not treated as income
  
  

As a result, selling an appreciating asset often creates a significant tax obligation, while borrowing against that same asset does not. For long-term crypto holders, this difference compounds over time. Repeated asset sales can erode capital through taxes and fees, while borrowing preserves exposure and defers taxation.

This is where Summ’s expertise becomes critical. Through our strategic partnership, CoinRabbit users benefit from Summ’s robust tax tracking and reporting capabilities. Borrowing may not trigger a taxable event, but interest payments, refinancing, and broader portfolio activity still need careful documentation, and Summ ensures this process is accurate, transparent, and aligned with regulatory standards.

About Summ

Summ simplifies crypto tax reporting across 3,500+ wallets, exchanges, and blockchains. It generates precise, accountant-endorsed reports for a wide range of crypto activity, including DeFi and on-chain transactions, helping users stay fully compliant.

About CoinRabbit

CoinRabbit is a crypto asset management platform that helps you make the most of your digital portfolio. Built on the principles of sound money and long-term value, it lets you borrow against crypto, earn yields, trade hundreds of assets, and preserve your capital. 

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