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Author Topic: Lending Against Your Bitcoin  (Read 202 times)
dezoel
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June 17, 2021, 08:20:54 PM
 #21

It’s nothing new. This is something that a lot of people have been doing for years now and I am aware of it but I have not had interest in it. I just feel it’s best to Hodl my coins till when they increase. Sites like BlockFi, Crypto.com, Luno, and so many of them does this. And depending on the platform and token you’re actually using for the lending , you can get from 6% to 18% or maybe a bit above that.

But imagine you just hold the coins in your wallet after you might have bought them at a lower rate and then hold for years, the price can go up and you will get 1000%. So this is another reason why some people are not interested in that, they just prefer to HODL it themselves.

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tread93 (OP)
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June 18, 2021, 01:34:57 PM
 #22

OP, are you trying to get a loan in order to finance your future ATM business by any chance?  I thought I'd post here instead of responding to your PM, and I hope I'm not revealing a secret of yours by doing so--though the note you sent me didn't sound like it was confidential.

If that's the case, I wish you luck--and I'd recommend you enter the bitcoin ATM game sooner rather than later, at least if you're in the US.  I've been watching my state on Coinatmradar, and there have been a lot of ATMs popping up all over the place, with three in my own city, where there had been just one about a year ago.  They're all owned by different companies, too, with different fee structures, though the only one I really trust/like so far is CoinFlip.

If this is unrelated to that, I'm afraid I don't know of any place other than the Currency Exchange section to borrow against your bitcoin holdings.  But considering that most potential borrowers in that section don't offer any collateral at all, I'm pretty sure your request would be a welcome change and you'd easily get a loan with the appropriate collateral if you wanted to go that route.  Most people are looking for loans in bitcoin, but if I understood you correctly, you're looking for a fiat loan with bitcoin as collateral.  Either way, I doubt you'll have a problem.

Again, best of luck to you and your future endeavors, my man.  Glad you PM'ed me.

Edit:  I just read your PM again and I'm probably mistaken about your goal with the loan--but I wish you the best anyway, whatever your plans are.

Hey m8, appreciate your message. That process is currently underway and I should have my first machine deployed by the end of July! I'm actually utilizing my client's revenue share program and I opted for a 0 APR card to finance the machine. Based on my conversations from many operators most of them have said that these ATMs are paying for themselves in 6-9 months, so basically my plan here is to utilize the debt from the banks to have this bitcoin ATM pay for itself! Then i'll have my own little money printer and I'll reinvest either into more machines or more BTC.  I have cash flow to move if I need to, originally I was considering using some BTC to pay for this and my op would have accepted but I didn't find that a good way to do it simply because BTC is king, and I don't want to put up any of my coin because i'm holding long term. This post was really just to learn more about how folks are doing this, I've just seen a lot of commentary on the subject for people who would prefer to lend against their BTC over selling it to get fiat when needed, and that made me curious. Something like this would be more attractive at ATHs maybe in 2025 and beyond.

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June 18, 2021, 01:58:25 PM
 #23

There are a few advantages and of course some serious disadvantages with these.

You're looking to start a business, you're bullish on BTC, you think the value of your collateral will get up, and only from those gains you will pay both the interest rate and make a profit while having money to invest now!. All is good! But!

Your funds are locked in, you must pay your debt before getting access to them if you go over your loaned amount you have locked bitcoins twice the value that you can't touch, monthly payments back, and no real way to get out of it other than taking another loan...so if you need extra money for something you're in trouble, which brings up to the main danger. What if bitcoin experiences a dump, like the one we had a few months ago:

You take a loan of 30k  you guarantee it with a BTC worth 60k, then the dump comes, you must increase your collateral otherwise your BTC will be liquidated at 30k, and if you can't, that's it. And the price recovers in a week back to 40k and you realize that no matter how you spin it you have lost between $10-30k which you can't get ever back because your bitcoin is gone and so are future possible gains!

I wouldn't advise anyone on taking a loan at 1:2 without keeping a serious reserve to cover this and at the same time just like the others I would be against taking a loan on a large sum, you're risking your collateral in a non-FDIC insured platform, so if something happens, it is gone forever!

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