... earlier ITT: Using Bitcoin-collateralized loans to buy more Bitcoin.
Risky AF. Given how lucky I have been in life, I'm not sure I have the fortitude (even with the plate-training) to handle a strategy like that - even with 5%-10% of my stash.
Seems like the down-side risk is way too high IMO.
Ultimately, I get that NGU on a long-enough timeline, but the short-term volatility might fuck you hard without lube, and that's never fun.
Especially if they haven't enema'd and showered beforehand, if you catch my meaning...
This is something I am also facing, and kind of feel like you do. I am going to need to come up with some cheddar due to things going on in my world... This is one option. Borrow against my stack? Or just sell some.
Or another option is a line of credit... a loan not collateralize against the corn, but backed up by it for me. In other words... get a loan and then HOPEFULLY pay it off with a smaller amount of Bitcoin than it would have taken to do right now.
But on the other hand there is ALWAYS the possibility that BTC goes down, and I lose that bet.
Meh.
I feel you both. I've been thinking for a long time, trying to find a way to live off corn without actually spending corn. It seems impossible until you realize it only depends fundamentally on a NGU state.
Collateralized debt that can be margin called when NGD is risky. I don't like the looks of it. However, clever system might be devised in the (hopefully near) future when there are enough happy bitcoiners to create a demand.
Debt that is backed by corn, with an implicit bet that NGU (with some corn erosion if not). This could be viable if the time horizon is long enough - say, over 4 years? That's the first time range that came to my mind for some reason. Especially if the loan can be repaid earlier with a discount on the unpaid interest (for unpaid time), this really can get workable. It is tantamount to a long position with low margin on perpetual futures. If the corn goes up seriously, you shave off as much as needed to pay out the loan.
The system that feels the most comfortable to me uses out of the money covered call options. You write (sell) some call options now, promising you'll sell the corn at a certain strike price on a certain date. You get paid a premium for this promise. You get the premium immediately. I would write a call option @300k today, but since the strike price is so preposterously out of the money, the premium would be slim. On expiry, two things can happen: either the price is below 300k, so no one will ask you to buy at that price, and you're good; or the price is above that, so you are forced to sell for "only" 300k per coin.
There might be other ways. Or better said, I'm sure there are - but some are risky (DeFi trickery involved), and as for the others, I'm willing to hear and learn. Which better place for that than the WO?
Poll
