That is the same reason why most borrowers don’t offer crypto as collateral. As it can be sold in few minutes to get the loan amount they need, so, I guess the one that need urgent money don’t care about his investments or his coins, they go ahead selling it to fix the situation.

The only gentleman that would borrow 1 bitcoin for his XXXX coins , is someone knows that they can repay the loan amount in that time overwise they would sell it.

For OP’s case
They didn’t mention why they need the loan and from where will the repayment come from. My guess this is a collateral selling deal.