Borrow fiat with your Bitcoin and never sell

[Cannabijoy]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

[n0ne]

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

[Cannabijoy]

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

Yes, if I need something, I would borrow the money instead of selling the Bitcoin to purchase it. Michael Saylor talks about this. If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money. If I sell the Bitcoin for fiat, then inflation will eat up that money. This is apparently what everyone from Elon Musk to Donald Trump does. They don’t actually have any money. They just have property, and borrow against the property because the property is more valuable than the cash.

[Bitcoin_Arena]

Also remember that once you borrow fiat, you are giving the lender opportunity to make way much money using your collateral (Bitcoin) on top of charging you very high interest rates. If anything goes wrong and you default the loan, your valuable Bitcoins are gone.

I would rather sell a small portion of my bitcoins for survival, while I keep the rest for the future.

[Yogee]

....
If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money.

You're not really gaining anything unless you sell them right? You will just be paying interest regardless of the fiat value of your BTC. What would you do when you borrowed money and then BTC price drops?

It's easy to say things when you have not been into those situations yet. Focus on accumulating those bitcoins first before saying what you're going to do with them.

[hatshepsut93]

How do you plan to settle the debt without selling Bitcoin? Bitcoin is not a legal tender in most countries, so you will have to liquidate it.

And now imagine the worst case scenario. You borrow money, Bitcoin crashes, you now have to sell your coins for a very bad price to settle the debt. But if you wasn't so greedy and simply sold Bitcoin while it's high, you would have more wealth, even with taxes and inflation.

[KingsDen]

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

Does anyone else plan on doing this?

I have been trying to get the real picture of what you meant. I read through twice and I was able to understand that;
When you have enough bitcoin maybe amounting to $100,000 you will have to borrow fiat of half the value. Let's say $50,000 and use your bitcoin as a collateral. When your bitcoin rises to Let's say $130,000 you will pay your debt with the bitcoin and still have enough left in bitcoin. The whole scenario was sounding fine until you said that you will clear the debt without selling the bitcoin. Let's assume it was a mistake.

Meanwhile, how long loan are you gonna get, how will you know if bitcoin will bull or bear and how will you be able to prove to the lender that you own the bitcoin. By sharing the address for him to checkup on blockchain? Not a good idea, or by sharing your secret keys, not also a good idea or by showing the person your bitcoin balance?

Please explain your idea very well.

[Cannabijoy]

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

Basically, you buy an asset that is sure to appreciate. What you lose in interest, you gain substantially more in equity- allowing you to borrow even more. This is why I said I wouldn’t borrow more than half of what Bitcoin is worth at any given time. This will ensure you do not lose all your Bitcoin.

https://www.wsj.com/amp/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

Does anyone else plan on doing this?

I have been trying to get the real picture of what you meant. I read through twice and I was able to understand that;
When you have enough bitcoin maybe amounting to $100,000 you will have to borrow fiat of half the value. Let's say $50,000 and use your bitcoin as a collateral. When your bitcoin rises to Let's say $130,000 you will pay your debt with the bitcoin and still have enough left in bitcoin. The whole scenario was sounding fine until you said that you will clear the debt without selling the bitcoin. Let's assume it was a mistake.

Meanwhile, how long loan are you gonna get, how will you know if bitcoin will bull or bear and how will you be able to prove to the lender that you own the bitcoin. By sharing the address for him to checkup on blockchain? Not a good idea, or by sharing your secret keys, not also a good idea or by showing the person your bitcoin balance?

Please explain your idea very well.

Not exactly. I don’t plan to live on Bitcoin alone. I will still have a job that ensures I can make the payments until I invest in enough things that offer a steady return.

[moderator's note: consecutive posts merged]

[bittraffic]

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

[sheenshane]

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

I get you and this is how I love how Robert Kiyosaki inspired people about debt and taxes and it might it's good if you watch this short clip of him.
https://www.youtube.com/shorts/vZv-7NqI3NM

This man I most admire, it's sure you've learned a lot with him and I think this idea is also good to apply if you want to invest in Bitcoin and aim for a target range time so that you can get paid the interest.

Your idea seems good, but make sure you can handle it very well.  There should be a game plan.

[Uang_kartal]

if you are looking for posts about bitcoin lending in the future, you can check this https://bitcointalk.org/index.php?topic=5137889.0

pending the requirements that the Op wants and the minimum requirements for submission.
if there is no urgent reason such as paying fees or any fees, you should not borrow if the goal is for long-term investment. I believe in your enthusiasm and prejudice in the bear market (analysis can change at any time). money itself which is not an emergency. Borrowing money, either fiat or crypto, can burden you and make you uncomfortable with the timeframe and interest requested.

[Cannabijoy]

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

If I sell Bitcoin once it reaches an ATH, and it continues to rise, I will never be able to recoup my Bitcoin. People sold their Bitcoin when it reached an ATH of $10. Suppose they made a million dollars. If they held their Bitcoin and could borrow against it, they would have $1,000,000 to invest in a business, plus $2 billion in Bitcoin.

[ChiBitCTy]

There is always a level of risk involved in things like this, and if you’re borrowing fiat monies while putting up bitcoin as collateral, then you’re going to have to pay interest on those dollars borrowed. Are you aware of that being the case? I’m not sure this makes sense, would need a little more background info on everything. 

[Cannabijoy]

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

I get you and this is how I love how Robert Kiyosaki inspired people about debt and taxes and it might it's good if you watch this short clip of him.
https://www.youtube.com/shorts/vZv-7NqI3NM

This man I most admire, it's sure you've learned a lot with him and I think this idea is also good to apply if you want to invest in Bitcoin and aim for a target range time so that you can get paid the interest.

Your idea seems good, but make sure you can handle it very well.  There should be a game plan.

I have seen videos with Robert Kiyosaki before, and he makes a lot of sense. You don’t want to borrow money against your Bitcoin for something like a car. You want to borrow the money to invest into rental properties or some other business that will make you money. You could sell the Bitcoin and live your entrepreneurial dreams; or you can borrow the money, live your entrepreneurial dreams, and keep your ever rising Bitcoin.

[Fundamentals Of]

There is of course both advantages and disadvantages to this. But the problem with borrowing fiat using your Bitcoin as collateral is probably that you will send your Bitcoin to the lending platform or company. And the amount of Bitcoin you are sending is definitely bigger than the fiat that you received.

Now, the lending platform is hardly to be trusted. Not only is this company centralized and in control of your funds, meaning its owners could suddenly exit and vanish into thin air, this company could also go bankrupt anytime. When that moment comes, your Bitcoin will be stuck.

[gunhell16]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

So according to what you said when you have Bitcoin you will borrow money for no more than half of the Bitcoin you have? Are you referring to a Bitcoin? You didn't say anything about the amount of bitcoin, you just said that when you have Bitcoin, do we know if you are only targeting half or 1 bitcoin. It's a bit like what you're saying is just confusing or just a little messy. But in my understanding, maybe it's better not to borrow money if you have 1 Bitcoin. It's like you injured yourself if your body is fine.

Also, there are many ways in this forum to earn bitcoin or even altcoins as long as you just research and ask questions here, there are even other members on this platform who lend here like @darkstar, Shasan and others as long as they will see that you have a source of funds to pay what you borrow.

[Poker Player]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

....

Does anyone else plan on doing this?

You are late for this. This is so 2021 what you are saying.

The one who popularized this last year was Michael Saylor, to the point of recommending to people that if you have a paid off house, take a mortgage and buy Bitcoin with the money they give you. Soon other Youtubers jumped on the bandwagon, like Max Kaiser.

The problem is that we are in 2022 and many of the entities that allowed you to borrow against you Bitcoin have gone bankrupt, and people who had deposited Bitcoin in them, to borrow against it, for trade or other reasons, have been left without their Bitcoin and we will see if they get it back.

Remember: "not your keys, not your Bitcoin".

If you acquire a significant amount of Bitcoin it is much safer to sell or spend small parts than to borrow against it, even if you have to pay capital gains tax. Better to pay tax than to lose your Bitcoin.

[bigjuk]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

It's okay to borrow money, all of that is the right of the consumer, the borrower doesn't want to know what the money is being lent for.

Buy crypto loans and investments, if you are able to face monthly interest for borrowers, there is nothing wrong with holding on for the next few years, obviously you have to consider the risks that occur or before they happen.

[worle1bm]

It's not fiat that you can put as collateral because once the person is having access to your funds they can be gone with a blink of eye and you need to pay the debt also so it's not a win-win situation as you are assuming it to be.You can wait for some time and in future when your btc holding are worth significant amount you can buy stuff with it you like and it will be adopted in most of the region without even risking your coins.

[aoluain]

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

If I sell Bitcoin once it reaches an ATH, and it continues to rise, I will never be able to recoup my Bitcoin. People sold their Bitcoin when it reached an ATH of $10. Suppose they made a million dollars. If they held their Bitcoin and could borrow against it, they would have $1,000,000 to invest in a business, plus $2 billion in Bitcoin.

Yea the trouble is that you will have to hand over Bitcoin to whomever you borrow the FIAT
from, this means you lose control of that Bitcoin and when the value falls you will have to
give them more Bitcoin to cover the value of the FIAT loan, its like a "Margin Call".

Alternatively you could do what I did twice before and its something most others would
frown upon but it worked for me. Just get a FIAT loan without touching your Bitcoin
and buy more Bitcoin with it. Timing is everything and I have done it 6 months before
the halving then 12 months after the halving sell the Bitcoin you bought to do what
you want or just part of it to pay the complete FIAT loan back.

* of course i cannot guarantee this will actually work just based on fast performance alone!

[so98nn]

The capital gains on bitcoin is huge, my country levies taxation around 30% and not only this if you own a business then you have to pay additional 18% export tax on the bitcoin sold against fiat. This is very very layered structure from Indian government so that we can not freely use the bitcoin.

If this continued I am afraid there is no way Indians can get into bitcoin freely unless and until they fly to tax feee country sell the assets there and wire it with fiat to get only capita gains as personal passive income. Idk, but it sucks.

[laurenB7742]

The risk is that if you don't pay the interest, your collateral will also disappear, in which case I would do it the way @Bitcoin_Arena mentioned. I will also sell some bitcoins to cover work expenses, and then I will find a way to buy back those sold bitcoins when I can afford it. The market is still there and the opportunity to own bitcoin has never gone away so there is no need to mortgage assets while we can sell them.

[Cannabijoy]

You are late for this. This is so 2021 what you are saying.

The one who popularized this last year was Michael Saylor, to the point of recommending to people that if you have a paid off house, take a mortgage and buy Bitcoin with the money they give you. Soon other Youtubers jumped on the bandwagon, like Max Kaiser.

I’m not saying use your house as collateral to buy more Bitcoin. I’m saying use your Bitcoin as collateral to obtain more property (specifically investments that will earn you more money).


If you acquire a significant amount of Bitcoin it is much safer to sell or spend small parts than to borrow against it, even if you have to pay capital gains tax. Better to pay tax than to lose your Bitcoin.
[/quote]

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

Yea the trouble is that you will have to hand over Bitcoin to whomever you borrow the FIAT
from, this means you lose control of that Bitcoin and when the value falls you will have to
give them more Bitcoin to cover the value of the FIAT loan, its like a "Margin Call".

Why would you have to hand over your Bitcoin? Perhaps you do now, but I am talking about the future when Bitcoin is more established. You don’t have to move out of your house when you use it as collateral. You only have to prove that you possess the asset that you’re using.

[moderator's note: consecutive posts merged]

[Poker Player]

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

No, it wouldn't. It doesn't actually.

Because in your argument you are obviating the increased purchasing power of Bitcoin, with which it is worth selling to enjoy the benefits while maintaining or even increasing purchasing power.

Stop listening to the snake oil salesman Saylor.

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

You are cheating yourself.

Like selling $1M for $10? What the **** are you talking about?

It will always be better to sell small pieces than borrow because in order to borrow you will have to deposit at least twice as much, giving up your private keys, and with the volatility of Bitcoin, you will soon receive a margin call.

Why would you have to hand over your Bitcoin? Perhaps you do now, but I am talking about the future when Bitcoin is more established. You don’t have to move out of your house when you use it as collateral. You only have to prove that you possess the asset that you’re using.

Here we are talking about realities, not what you imagine. You have to hand over your Bitcoin in order to borrow.

[Cannabijoy]

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

No, it wouldn't. It doesn't actually.

Because in your argument you are obviating the increased purchasing power of Bitcoin, with which it is worth selling to enjoy the benefits while maintaining or even increasing purchasing power.

Stop listening to the snake oil salesman Saylor.

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

You are cheating yourself.

Like selling $1M for $10? What the **** are you talking about?

It will always be better to sell small pieces than borrow because in order to delete you will have to deposit at least twice as much, giving up your private keys, and with the volatility of Bitcoin, you will soon receive a margin call.

Sorry, I may have worded that wrong. What I mean is, if I sold 100,000 Bitcoin at $10 a coin in 2011, for a total of $1,000,000, my million dollars would have lost 25% of its purchasing power due to inflation- while the Bitcoin would be worth $2 billion.

[Poker Player]

Sorry, I may have worded that wrong. What I mean is, if I sold 100,000 Bitcoin at $10 a coin in 2011, for a total of $1,000,000, my million dollars would have lost 25% of its purchasing power due to inflation- while the Bitcoin would be worth $2 billion.

Many have had the same idea as you, popularized by the snake oil salesman and have ended up liquidated or with their bitcoin lost or locked in broken exchanges.

At the time I doubt you could borrow against your Bitcoin, but let's assume you could.

Leaving that Bitcoin worth $1M, they would lend you a maximum of 50%, or $0.5M, but it is not convenient to borrow the maximum because at the minimum that the price oscillates a little downwards you would receive a margin call to provide more collateral or you would be liquidated. On that borrowed amount you would have to make periodic payments, which if missed, you would also be liquidated. If the exchange went bankrupt you would be left without your funds.

How much would you have borrowed to have a good margin of safety? $200K? With a downturn like the last few months, you would have received a margin call as well.

That borrow idea is fine if you are a billionaire, have like 10,000 bitcoins, and to finance your lifestyle you only need to borrow against 50 or 500 at most, but not for ordinary people as the snake oil salesman has taken it upon himself to popularize.

[jrrsparkles]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

It works theoretically but is it really possible in reality? How you are going to pledge your bitcoin to borrow your fiat, if you give your bitcoin to someone as collateral then it becomes their possession not just only the collateral since we all know that bitcoin transactions are irreversible. 

[kamvreto]

to replace the fiat system is currently not possible, Bitcoin still has pros and cons and price fluctuations will affect the level of risk of using bitcoin. Bitcoin and fiat today still go hand in hand, complement each other and do not replace each other. Borrowing money for long-term investments is not a problem as long as there is a return for the loan. Borrow according to what you need, banks value borrowers more than savers because borrowers will provide many advantages for the bank.

[bitbollo]

it is too risky as a strategy because the price can fluctuate dramatically and make an investment almost like playing in the casino.
if you do not really need cash for an investment you are basically trusting everything to the hope that the price of bitcoin will revalue... otherwise how do you repay your loan?

then ok here we are all bullish and we think that the price of bitcoins always tends to rise over the long term (maybe years or decades), but imagine a big contraction takes place (similar to what we have seen in recent months) ...
practically you risk losing all the bitcoin and keeping yourself with a large fiat debt to repay.

[NotATether]

I dont have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

You are going to trust the economic recession with your borrowed cash?

Sorry to rain on your parade, but the inflations and rising interest coming from the recession megastorm in the next few months are going to wipe out your borrowed cash, and the bitcoin you're borrowing it against (because even more lending platforms will collapse - this time by running out of cash because govts will not bail them out).

Don't throw your hard-earned bitcoins into a funnel, wait until the price gets out of its bearish burrow, and then buy the stuff you want by liquidating parts of your BTC.

[sunsilk]

This is viable if you have other source of income that can support to pay your debt whatever is the market's situation. But I won't do this strategy and I know how it feels hard to sell your bitcoin when you're in need.

Yet, borrowing and using your bitcoin as collateral or you're asking for a loan so that you'll save your bitcoin is going to add your responsibility because of the interest that you'll get.

On the otherhand, it's okay to sell and have it saved on a stablecoin and wait until the price drops so you can buy again.

[fullhdpixel]

The risk is that if you don't pay the interest, your collateral will also disappear, in which case I would do it the way @Bitcoin_Arena mentioned. I will also sell some bitcoins to cover work expenses, and then I will find a way to buy back those sold bitcoins when I can afford it. The market is still there and the opportunity to own bitcoin has never gone away so there is no need to mortgage assets while we can sell them.

Not only the interest that needs to be paid but also the borrowed amount. I think it's also possible to pay for the interest first? I heard it last time, when our neighbour borrow a cash but I heard they pay the interest first. Maybe that can work better so that the next time you pay it will now look smaller and you are motivated to pay it on time.

The only way that your collateral could disappear is when you fail to pay the loan or also called as default. If you bought your bitcoins on a price which is lower than your selling price then its fine to sell it and get some profits but we can always sell whenever there is a good pump. That way we will never run out of cash and there is no need to borrow money anymore.

[ethereumhunter]

to replace the fiat system is currently not possible, Bitcoin still has pros and cons and price fluctuations will affect the level of risk of using bitcoin. Bitcoin and fiat today still go hand in hand, complement each other and do not replace each other. Borrowing money for long-term investments is not a problem as long as there is a return for the loan. Borrow according to what you need, banks value borrowers more than savers because borrowers will provide many advantages for the bank.

As long as we feel we can repay the money we borrowed, we can borrow money from the bank and return the loan money every month. But suppose we are going to use the money to start a business. In that case, we must carefully calculate the risks because a business cannot always provide a profit so we may have difficulty paying the loan. Maybe it would be better to try with the money you have first and keep trying to make a profit so that your capital money can be big and you don't have to borrow money from the bank.

[Agbe]

The whole story is complicated, If I say I understand you that is like. Your story is not straight forward. Are you saying that you want to borrow Fiat with bitcoin? How? If it is like that then you are saying the opposite of the whole thing because it is the Fiat currency you would have borrowed to buy bitcoin not the other way round. By way. Bitcoin is not to replace the Fiat currency system but to use as the assistant/alternative as to the Fiat currency. The quantity of bitcoin is not enough to take over fiat currency system unless if more bitcoins are produce in the ecosystem. And also borrowing money to buy bitcoin as you are interested to do it is not advisable because bitcoin is not a stable coin. Now you borrow  $300 to buy bitcoin as the rate of $20k and bitcoin ironically come down to 17k. What will you do?

As for me, I am not planning to do what you are planning to do.

[AmoreJaz]

This is viable if you have other source of income that can support to pay your debt whatever is the market's situation. But I won't do this strategy and I know how it feels hard to sell your bitcoin when you're in need.

Yet, borrowing and using your bitcoin as collateral or you're asking for a loan so that you'll save your bitcoin is going to add your responsibility because of the interest that you'll get.

On the otherhand, it's okay to sell and have it saved on a stablecoin and wait until the price drops so you can buy again.

whatever the OP is planning here, as you have suggested, much better if the OP has other means so in case of need, he can use it and not touch his satoshis. hard to get a loan and if you are just relying on this as source of funds, more then likely you will be on tight budget and sell it at a loss. this is why it is not a smart move if you are just having your satoshis and no other source of funds to take care of your other expenses.

[Hamphser]

This is viable if you have other source of income that can support to pay your debt whatever is the market's situation. But I won't do this strategy and I know how it feels hard to sell your bitcoin when you're in need.

Yet, borrowing and using your bitcoin as collateral or you're asking for a loan so that you'll save your bitcoin is going to add your responsibility because of the interest that you'll get.

On the otherhand, it's okay to sell and have it saved on a stablecoin and wait until the price drops so you can buy again.

whatever the OP is planning here, much better if you have other means so in case of need, you can use it and not touch your satoshis. hard to get a loan and if you are just relying on this as source of funds, more then likely you will be on tight budget and sell it at a loss.

Proper money management would be the key and never ever consider on putting yourself on higher risk just because you are really that eager with your crypto investment.We know that crypto investment does

really have that chance for you to make big profits in the future but going all in or taking big loans and doesnt have much sufficient source of income then you would really be putting yourself in big trouble.

Always consider the risk factor and act accordingly which you do seem for it to be that will put you into advantage.

[kamvreto]

to replace the fiat system is currently not possible, Bitcoin still has pros and cons and price fluctuations will affect the level of risk of using bitcoin. Bitcoin and fiat today still go hand in hand, complement each other and do not replace each other. Borrowing money for long-term investments is not a problem as long as there is a return for the loan. Borrow according to what you need, banks value borrowers more than savers because borrowers will provide many advantages for the bank.

As long as we feel we can repay the money we borrowed, we can borrow money from the bank and return the loan money every month. But suppose we are going to use the money to start a business. In that case, we must carefully calculate the risks because a business cannot always provide a profit so we may have difficulty paying the loan. Maybe it would be better to try with the money you have first and keep trying to make a profit so that your capital money can be big and you don't have to borrow money from the bank.

if you still have personal money and can be used to trade why not. it's a better choice than having to borrow from the bank. Collecting profits little by little then the capital will be greater. But the most important of all is that trading skills must be really qualified. the average borrower of money in the bank is those who have good trading skills, so that returns will be faster and can be controlled. If you don't have skills, it's better to forget to borrow money at the bank.

[nullius]

Public Service Announcement:

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

Where that road leads:  Liquidation.

For example, from someone who started out exactly with the oh-so-clever idea that you state in OP—with lower leverage than you think to use, “in case the price drops”:

Now, I want to kill myself... or at least, take up alcoholism as a hobby.

(Someone, please quote me.)

Later, after worse wreckage:

Finding that loose change helped so much:  $48.82 is now a lot of money to me.

My finances have become dollhouse-sized.


Image:  A dollhouse handmade by someone’s grandfather (Dave Parker, 2007).  Surely a mansion, compared to what my scaled-down finances can afford.

A few months ago, as I nurtured my growing BTC long-term savings and a zoo of alts, I was throwing around $10k and $40k chunks of stablecoins.

[...]

I am now the proud owner of 0.0495 BTC plus a handful of sats, with a liquidation price a little bit under $19.2k.  If Bitcoin somehow breaks below $20k, the whole account is so small that I can hold a dollhouse yard sale of miniaturized alt-dust to raise $50; another $50 infusion would push my liquidation price down by >$1,100.  Eventually, I will get around to freeing my itty-bitty dollhouse bitcoins from the encumbering debt of around $853.  Meanwhile, I can hold a dollhouse tea party.

$48.82 is now a lot of money to me.  Finding that loose change helped so much.

[Morosophy]

I don’t think borrowing money keeping your bitcoins as collateral is a good idea, moreover many countries do not yet consider it as a legal tender. The risks are too high. You can wait for some time and then sell the bitcoins once the price increases instead.

[lizarder]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

Because the cash market is more likely to have an advantage, if it is lending rather than savers, that's why they are more after that kind of thing, but actually we can also take advantage of bitcoin to get maximum profit.

For example, we can buy bitcoin at a low price, so we can trade until bitcoin goes up at a high price, especially now that market conditions have an opportunity for us to buy and make investment schemes as we want.

The most important thing is that the method we use can generate profits, whether large or small, it really depends on how prepared we are in making investments, be it capital or the long or short-term strategies that we use.

[Cannabijoy]

Public Service Announcement:


Where that road leads:  Liquidation.

For example, from someone who started out exactly with the oh-so-clever idea that you state in OP—with lower leverage than you think to use, “in case the price drops”:

Now, I want to kill myself... or at least, take up alcoholism as a hobby.

(Someone, please quote me.)

https://i.imgur.com/yDYL8Uy.png

Later, after worse wreckage:

Finding that loose change helped so much:  $48.82 is now a lot of money to me.

My finances have become dollhouse-sized.

https://live.staticflickr.com/159/370515222_dfed969473.jpg
Image:  A dollhouse handmade by someone’s grandfather (Dave Parker, 2007).  Surely a mansion, compared to what my scaled-down finances can afford.

A few months ago, as I nurtured my growing BTC long-term savings and a zoo of alts, I was throwing around $10k and $40k chunks of stablecoins.

[...]

I am now the proud owner of 0.0495 BTC plus a handful of sats, with a liquidation price a little bit under $19.2k.  If Bitcoin somehow breaks below $20k, the whole account is so small that I can hold a dollhouse yard sale of miniaturized alt-dust to raise $50; another $50 infusion would push my liquidation price down by >$1,100.  Eventually, I will get around to freeing my itty-bitty dollhouse bitcoins from the encumbering debt of around $853.  Meanwhile, I can hold a dollhouse tea party.

$48.82 is now a lot of money to me.  Finding that loose change helped so much.

This person was apparently borrowing against their Bitcoin in order to purchase more Bitcoin. This sounds like a terrible idea, because if the price of Bitcoin drops, then you’ve lost value in the equity of your original Bitcoin, and you’re paying a higher price for the new Bitcoin because you have to pay off the loan.

A few months ago, I bought on margin between $35k and $43k.  Some things went wrong, with complications from other transactions; leverage wound up higher than planned, but still at what seemed a "safe" level.  Then, I held through $48k because I do not want to sell any BTC, ever.

I was one of the idiots trying to increase LTH BTC by leveraging BTC to buy more BTC in the dip, then slowly repaying the margin loan from other income.  (Plus doing some of that "borrow against your BTC!" stuff for other purposes; this is the succinct version.)

That's similar to what Saylor does.  Why shouldn't I do it?  Oh, yes, because Saylor has access to lending terms that are not insane.

Exchange margin accounts make loans on the worst possible terms:  If the fuzzy-notional price of an oracle (not even the real market order-book price) dips even one microdollar below exactly $x for even one microsecond, then a robot instantly trashes your collateral.  Sells down, market-dumps - with liquidation penalty.

This is not something I would recommend doing at all. However, I never want to sell my Bitcoin. I want to leave it to my children, and teach them about money and why they should buy Bitcoin.

You never sell the family gold, and you never sell the family farm. My dad sold a farm in exchange for an acre with a house; and now that farm is worth 30x what he sold it for, and his acre is maybe worth 3x after 20 years. I don’t want to make that same mistake.

[davis196]

This seems like a risky idea.
1.There are interest rate hikes so the fiat loans are going to get more expensive.
2.Bitcoin is highly volatile and if the Bitcoin price drops severely you will have to add more BTC to the collateral or the lender will declare your default, sell your collateral and demand more money from you to in order to cover the rest of the loan.
3.If you plan to buy real estate, there is a real estate price bubble in many counties around the world(I don't know your country). There interest rate hikes and the upcoming recession might hit the real estate market. Good luck owning a real estate with decreasing value while having to repay a loan.

[Mauser]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

I am not sure if this works, you want to borrow Fiat money against Bitcoins. Will you over the bank bitcoins as collateral or the apartment you are buying? If the property is the collateral it might work, because I don't think the bank would accept bitcoins at the moment, the price dropped to much this year. Taking out a loan to buy a property is a good idea if you can afford it. I am assuming you are planning on living in the property yourself, or do you want to rent it out? If you live in it yourself then you need to make sure you have a steady income each months to cover the expenses and the interest payments on the loan. Another factor is that we have very high inflation right now, all the new loans will be much more expensive. And if the loan needs to be refinanced in the future you need to expect much higher payments.

[Silberman]

Also remember that once you borrow fiat, you are giving the lender opportunity to make way much money using your collateral (Bitcoin) on top of charging you very high interest rates. If anything goes wrong and you default the loan, your valuable Bitcoins are gone.

I would rather sell a small portion of my bitcoins for survival, while I keep the rest for the future.

The OP is planning for a very risky move, I mean even if he were to find a bank which allowed him to use his bitcoin as collateral for a loan, things are never that simple, we know the price of bitcoin can be very unstable so if at some point the price of his bitcoin went so low that it was barely enough to pay the debt and the interest rates then the banks will force him to sell for a bad price, he will have to pay capital gain taxes and will lose all his bitcoin, so such a move is simply too difficult to execute for the average investor in this market.

[glendall]

are you crazy
ready who will believe in your commitment, it's crazy in my opinion, as far as I know if you borrow money, you must have interest and payment due in how many months or even years, but you guarantee your btc without any clarity on the price your btc will be lost
it's better to sell as much as you need , than borrow money even though we have money in bitcoin, don't make it difficult for yourself to defend something whose certainty is not clear

[Nrcewker]

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

The OP only means how he will make profit, and hence sharing us his ultimate strategy to make money.
BTW op you mentioned that if you sell your Bitcoins, then you need to pay tax for it. But I would say why to sell your Bitcoins at exchanges? Do P2P trade and save money from taxes.
Moreover the plan is great to listen, but risky to execute.
Nevertheless,  OP if you ever successfully complete this strategy of yours, then do let us know here in this thread.
We are waiting for you to get rich.

[sunsilk]

This is viable if you have other source of income that can support to pay your debt whatever is the market's situation. But I won't do this strategy and I know how it feels hard to sell your bitcoin when you're in need.

Yet, borrowing and using your bitcoin as collateral or you're asking for a loan so that you'll save your bitcoin is going to add your responsibility because of the interest that you'll get.

On the otherhand, it's okay to sell and have it saved on a stablecoin and wait until the price drops so you can buy again.

whatever the OP is planning here, as you have suggested, much better if the OP has other means so in case of need, he can use it and not touch his satoshis. hard to get a loan and if you are just relying on this as source of funds, more then likely you will be on tight budget and sell it at a loss. this is why it is not a smart move if you are just having your satoshis and no other source of funds to take care of your other expenses.

Many experiences have we heard that this won't end up better.

It seems a sound plan to execute but when he's on the actual thing, he'll surely meet those problems that he didn't anticipated when he was planning to do this.

All things are easy to think of when it's come to borrowing and buying bitcoin but these two are not that really a good combination to be done.

[Fatunad]

This is viable if you have other source of income that can support to pay your debt whatever is the market's situation. But I won't do this strategy and I know how it feels hard to sell your bitcoin when you're in need.

Yet, borrowing and using your bitcoin as collateral or you're asking for a loan so that you'll save your bitcoin is going to add your responsibility because of the interest that you'll get.

On the otherhand, it's okay to sell and have it saved on a stablecoin and wait until the price drops so you can buy again.

whatever the OP is planning here, as you have suggested, much better if the OP has other means so in case of need, he can use it and not touch his satoshis. hard to get a loan and if you are just relying on this as source of funds, more then likely you will be on tight budget and sell it at a loss. this is why it is not a smart move if you are just having your satoshis and no other source of funds to take care of your other expenses.

Many experiences have we heard that this won't end up better.

It seems a sound plan to execute but when he's on the actual thing, he'll surely meet those problems that he didn't anticipated when he was planning to do this.

All things are easy to think of when it's come to borrowing and buying bitcoin but these two are not that really a good combination to be done.

Borrow only when you are in need or emergencies but of course you should really be that mindful and realize or do make out questions for yourself if you could able to pay those borrowed amounts
that you have done on due time? If not then never ever consider this option as this would really create bigger problems in the future.If you are investing with bitcoin then invest on something
which you can afford to lose and as much as possible never ever consider on taking up some loan as this would really be creating huge problem instead on making profits.
Make use of fiat on daily transactions and invest on bitcoin and hold for long  term on extra money that you do have.

[laurenB7742]

The risk is that if you don't pay the interest, your collateral will also disappear, in which case I would do it the way @Bitcoin_Arena mentioned. I will also sell some bitcoins to cover work expenses, and then I will find a way to buy back those sold bitcoins when I can afford it. The market is still there and the opportunity to own bitcoin has never gone away so there is no need to mortgage assets while we can sell them.

Not only the interest that needs to be paid but also the borrowed amount. I think it's also possible to pay for the interest first? I heard it last time, when our neighbour borrow a cash but I heard they pay the interest first. Maybe that can work better so that the next time you pay it will now look smaller and you are motivated to pay it on time.

The only way that your collateral could disappear is when you fail to pay the loan or also called as default. If you bought your bitcoins on a price which is lower than your selling price then its fine to sell it and get some profits but we can always sell whenever there is a good pump. That way we will never run out of cash and there is no need to borrow money anymore.

I don't see a difference when it comes to paying interest before or after, as paying interest first means your initial loan amount will be less and that will make it difficult for you because you don't have enough money to take care of your business.

I don't welcome mortgage loans, especially with volatile assets like bitcoin. We invest bitcoin to serve life not we serve bitcoin so selling some I won't take too seriously.

[bitzizzix]

If you are new to bitcoin and don't know the risks involved then don't borrow money to invest and if you know the risks then you can borrow and invest, are you able to bear the risks that will be faced because bitcoin or other cryptocurrencies are very risky investments.
although bitcoin will promise for a long period of time that takes years whether you are ready or have other income for your loan payments, and if there is it is up to you too because in reality you will not encounter any unexpected problems that will stress you out.
So it's okay to borrow money for any investment, either way, it's better gradually or you'll just lose money you can afford to lose without running into financial problems.
And if you can't wait to buy bitcoin in bulk, you can sell something expensive (not a place to live) to invest without involving a third person, only you and the bitcoin are involved.

[sunsilk]

Many experiences have we heard that this won't end up better.

It seems a sound plan to execute but when he's on the actual thing, he'll surely meet those problems that he didn't anticipated when he was planning to do this.

All things are easy to think of when it's come to borrowing and buying bitcoin but these two are not that really a good combination to be done.

Borrow only when you are in need or emergencies but of course you should really be that mindful and realize or do make out questions for yourself if you could able to pay those borrowed amounts
that you have done on due time? If not then never ever consider this option as this would really create bigger problems in the future.If you are investing with bitcoin then invest on something
which you can afford to lose and as much as possible never ever consider on taking up some loan as this would really be creating huge problem instead on making profits.
Make use of fiat on daily transactions and invest on bitcoin and hold for long  term on extra money that you do have.

Well, there's a likely that if he's in dire situation he'll sell what he got from holding and that's what he's going to use for paying his debts.

This option is for someone who can really confidently pay his debts with other sources that he's got. But if this is the only wealth that he's got, the bitcoins that he's holding.

It's hard to imagine that he'll be forced to sell his bitcoins just to pay those debts someday.

[Kakmakr]

Ok, now tell me one thing....

What happens if the Bitcoin price dumps and it goes into a "recovery" phase for 3 to 4 years ....as it did before? Then you have to pay interest on the borrowed FIAT for 3 to 4 years. 

Not just that.... the interest that you paid on the borrowed capital ....also lose accumulated interest that you could have received, if it was in a Bank. There is also no guarantee that the price will recover to a new all-time-high. 

[jaberwock]

Also remember that once you borrow fiat, you are giving the lender opportunity to make way much money using your collateral (Bitcoin) on top of charging you very high interest rates. If anything goes wrong and you default the loan, your valuable Bitcoins are gone.

I would rather sell a small portion of my bitcoins for survival, while I keep the rest for the future.

The OP is planning for a very risky move, I mean even if he were to find a bank which allowed him to use his bitcoin as collateral for a loan, things are never that simple, we know the price of bitcoin can be very unstable so if at some point the price of his bitcoin went so low that it was barely enough to pay the debt and the interest rates then the banks will force him to sell for a bad price, he will have to pay capital gain taxes and will lose all his bitcoin, so such a move is simply too difficult to execute for the average investor in this market.

We have exactly that in crypto as well. You pay let's say 120 dollars worth of ethereum, to get 100 dollars worth of bitcoin, and that 120 dollars worth of ETH is collateral. Meaning if the price drops and you lose some, then they have the right to liquidate you and you will have to live with the loss. The higher collateral you are willing to spend, the more money you will be making, and that is how people are approaching this at the time.

Crypto collateral loans are not good, they are not giving you the fair rates plus they are not actually loans because if you have enough collateral, that ain't really a loan. Loan is what you get when you have no other money.

[TheUltraElite]

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax.

If you live in a country where bitcoin is openly used to buy everyday stuff then good for you, but then buying stuff will gradually end up attracting taxes too. Now you cant live without paying for your food and water, so whats the point you are trying to make? Good and services tax exist in countries.

Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

Surely you will gain, but that is a gain on paper, not in reality unless you sell. If your objective is to evade taxation by using bitcoin then you are in the wrong place.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Bitcoin has its pros and cons just like fiat, in the ideal scenario they are supposed to work complementing each other.

Does anyone else plan on doing this?

I am sure others have had "pipe-dreams" like yours before this and failed after realizing their mistake.

[kryptqnick]

Op, are you living in the USA? 'Cause I think the scheme of borrowing instead of selling is very specific to the US where loans are extremely common, and where there's such a thing as a sell tax which one avoids by never selling the asset. If you're comfortable with this system and you live in the US, it might be alright. I personally would never do that because I come from a culture where loans are very rare and risky, and people just buy what they can afford and don't borrow unless there's absolutely no other way.

[uneng]

It's simply better to avoid needing to borrow money because I don't want to have to sell my bitcoins, but I also don't want to have to pay interest to the bank over loans and unfortunatelly we can't predict how much percentage profit bitcoin is going to generate us in a year time period. Fluctuations can be positive, negative or nothing at all, therefore you are forced to prepare a 'Plan B' to repay your loan anyway.

[BIT-BENDER]

If you ask me OP I think you didn’t think this through. Let’s say I follow your instructions and decide to borrow Fiat using Bitcoin and at the point of be running the process bitcoin is 20k dollars and that’s I get 20k dollars Fiat. Let’s say at the time of repayment bitcoin goes up to to 30k how would the transaction be, and if who I borrowed the money from is knowledgeable about crypto-currency then it would be a major problem.

[Slow death]

I had to read it many times to understand what is the point of you making a loan when you already have money that you invested in bitcoin and you can use it? I have a question:

The day you took your money and decided to buy bitcoin, what was your deal with it? your goal was to buy bitcoin and make hodl and never spend that bitcoin and you die without spending the bitcoin? was that your goal? or was your goal to buy bitcoin and hodl until it increased a lot and then you spent it in the real world?

when we make an investment the objective is to make a profit and then we use that profit, and we continue to invest and then we use the profit, always keeping the principal to generate more profit. it makes no sense to make a loan when you could sell a part of your bitcoins and leave another part until you had a big increase to make more profit

[coolcoinz]

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

This is what big companies are doing and why they recently got in trouble when the price crashed.
They took loans with their bitcoin as collateral, but when the price halved the lenders demanded more collateral, which the companies couldn't provide because their investors and sales dwindled.

As for you, the average user, taking a loan with bitcoin collateral is not a bad idea, as long as you don't use all of it. Say, I'd take one now for the equivalent of 2 BTC, while holding 10 BTC. The price could go lower, but even if it went below 10k USD, which will I'm willing to bet will not happen, I'd still be completely safe.

[TelolettOm]

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

Yes, if I need something, I would borrow the money instead of selling the Bitcoin to purchase it. Michael Saylor talks about this. If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money. If I sell the Bitcoin for fiat, then inflation will eat up that money. This is apparently what everyone from Elon Musk to Donald Trump does. They don’t actually have any money. They just have property, and borrow against the property because the property is more valuable than the cash.

owh I see your point. so you prefer to borrow money than sell your Bitcoin if there is something urgent to get money?
well, this is your own plan and I cannot blame you. everybody has individual thinking.
but for me, I will try my best to stay away from loans. I prefer to sell my asset if something happen with me and need much money than borrowing money for loans moreover in bank. because I need to pay for the debts and interest. additionally, I maybe feel worried if having loans, I cannot life calmly. that is why I prefer not to have loans. better to sell my assets and then I can collect money again to add my investment.

[goldkingcoiner]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

So let me get this right:

You want to

1. Borrow fiat for half of your Bitcoin as collateral.
2. Pay off the loan by, what, selling Bitcoin profits for x amount of fiat or in the form of x amount of Bitcoin?

So either you are paying tax once you sell for fiat to pay your debt OR you pay in an agreed amount of Bitcoins. And seeing as Bitcoin is going up very nicely, you could actually lose out more on profits than you would have paid on taxes. Unless of course Bitcoin falls. But thats not a bet I would want to take. Because the chances that Bitcoin is going to go past 33% in price is more likely than the opposite. And at that point you lost more than if you paid 33% in taxes.

Don't the rich make money by borrowing fiat to buy property which will then generate turnover (revenue)? That generated turnover is taxed and part of the profit is used to pay back the loan? Once its paid back they can do the same method over again but this time borrow more by using the bought property as additional collateral?

Any turnover is still taxxed. If your property does not generate any profit and you have no fiat to pay them back then they can take your property and your Bitcoin as collateral. Am I missing something?

The same method for borrowing money to buy Bitcoin would generate huge profits.
But first you have to find someone to loan you fiat to buy Bitcoin.

The loan application conversation would go like this:

You : Hi, I want to borrow fiat to buy BTC.
Bank: No. If we were smart enough to understand the potential of Bitcoin, we would have bought it ourselves.

[DoublerHunter]

If you ask me OP I think you didn’t think this through. Let’s say I follow your instructions and decide to borrow Fiat using Bitcoin and at the point of be running the process bitcoin is 20k dollars and that’s I get 20k dollars Fiat. Let’s say at the time of repayment bitcoin goes up to to 30k how would the transaction be, and if who I borrowed the money from is knowledgeable about crypto-currency then it would be a major problem.

^ I think you did not understand as OP said, the BTC here is just collateral, whatever happens to the price still the BTC is the collateral.
Probably the point is, while BTC is at a low price or you know that your BTC will grow more in the future, instead of selling it directly to exchange, just use it as your collateral and borrow fiat which is fiat amount will remain the same as what you borrowed.
However, the problem here is where you will find a service that allows BTC as collateral and make sure it should be trusted.

[Mahanton]

You can do anything with the loan but if there is high rate of interest then there is little worry. If you have passive income investing in something that makes sense. Because you have to pay fixed amount of money against interest. Many people adopt the same approach in the case of Bitcoin and take loans by keeping Bitcoin as an asset. If it is for long time you will get advantage otherwise there is possibility of loss.

When we  do tend to take up some loan then we arent that dumb on not to know on whats the interest.Therefore, if you do see that it is really just high then there's nothing you can do about it
So its a take it or leave it kind of situation of yours to take. There's nothing wrong to take up some loan as long you are responsible  and able to repay those amounts in due time then i dont see
anything wrong with it as long it would be applied to investment but of course dont expect something from it because there's no assurance or sureness that you could make profits on time.

[Cannabijoy]

I had to read it many times to understand what is the point of you making a loan when you already have money that you invested in bitcoin and you can use it? I have a question:

The day you took your money and decided to buy bitcoin, what was your deal with it? your goal was to buy bitcoin and make hodl and never spend that bitcoin and you die without spending the bitcoin? was that your goal? or was your goal to buy bitcoin and hodl until it increased a lot and then you spent it in the real world?

when we make an investment the objective is to make a profit and then we use that profit, and we continue to invest and then we use the profit, always keeping the principal to generate more profit. it makes no sense to make a loan when you could sell a part of your bitcoins and leave another part until you had a big increase to make more profit

My goal is to never sell the Bitcoin, and to leave it to my children after I die. I will teach them about the first principles of money, and why Bitcoin is the greatest, hardest money ever created, so that they never sell it. Their cash can be stolen through inflation, their gold can be stolen by anyone, and their land can be stolen by eminent domain or asset forfeiture. Their Bitcoin can never be stolen, so long as they know how to hodl it.

[Flamous]

Not a wise thing to do as you do not know what will happen to bitcoins in the future.

[popeye95]

I had to read it many times to understand what is the point of you making a loan when you already have money that you invested in bitcoin and you can use it? I have a question:

The day you took your money and decided to buy bitcoin, what was your deal with it? your goal was to buy bitcoin and make hodl and never spend that bitcoin and you die without spending the bitcoin? was that your goal? or was your goal to buy bitcoin and hodl until it increased a lot and then you spent it in the real world?

when we make an investment the objective is to make a profit and then we use that profit, and we continue to invest and then we use the profit, always keeping the principal to generate more profit. it makes no sense to make a loan when you could sell a part of your bitcoins and leave another part until you had a big increase to make more profit

My goal is to never sell the Bitcoin, and to leave it to my children after I die. I will teach them about the first principles of money, and why Bitcoin is the greatest, hardest money ever created, so that they never sell it. Their cash can be stolen through inflation, their gold can be stolen by anyone, and their land can be stolen by eminent domain or asset forfeiture. Their Bitcoin can never be stolen, so long as they know how to hodl it.

I think you need to have a more thoughtful plan than this 'borrow fiat, never sell bitcoin' plan. You know, fiat has the interest rate, and if Bitcoin was under a bear market with price drop every day, you put yourself at risk. Saw how many crypto financials like 3AC, Voyager, Celsius are now under bankruptcy because of hedge funds, lending,... They've expanded a lot when it was a bull market and overestimated themself and can not cover under the bear market.

[Kelvinid]

Does anyone else plan on doing this?

I'm not, and it was not my plan. I keep Bitcoin and also fiat money and that is because Bitcoin is not fully accepted in all areas, not even in my country. Yes, I could say it was not banned in my country but the problem is it was not also accepted as currency. And I was urged to sell them and converted them to fiat money for there is something I could use to buy stuff and other necessities.

I see your idea was good but not really how it works this time, not now - might be possible and it works in the future.

[virasisog]

Does anyone else plan on doing this?

I'm not, and it was not my plan. I keep Bitcoin and also fiat money and that is because Bitcoin is not fully accepted in all areas, not even in my country. Yes, I could say it was not banned in my country but the problem is it was not also accepted as currency. And I was urged to sell them and converted them to fiat money for there is something I could use to buy stuff and other necessities.

I see your idea was good but not really how it works this time, not now - might be possible and it works in the future.

Good idea but isn't a wise move. It will never be advisable to invest in Bitcoin using borrowed funds. We all know how risky crypto investment is and it could only cause you trouble in case you fail in your investment. Borrowing just to have investment capital won't work in the long run. You better save and allocate funds for investment. Bitcoin investment is not as easy as you think because its volatility is unpredictable.

[salad daging]

Good idea but isn't a wise move. It will never be advisable to invest in Bitcoin using borrowed funds. We all know how risky crypto investment is and it could only cause you trouble in case you fail in your investment. Borrowing just to have investment capital won't work in the long run. You better save and allocate funds for investment. Bitcoin investment is not as easy as you think because its volatility is unpredictable.

Precisely for me it's not a good idea to take out a loan with a decent profit while we don't think about how big the risk will be later this also needs to be thought about and what if it happens, so I avoid it.

For me, a loan is not a good thing, especially for crypto investments which are full of high risk when volatility is difficult to predict, this kind of thing is not included in the management I planned, I certainly have to have my own allocation where when I want to have BTC it must be there when the price drops This will not be charged because it has been allocated differently from the loan where we have to return it at the specified time.

[Detritus]

From all I understand in your post, your talking about crypto loan. Selling my Bitcoin again...? No, I would not do that. Crypto loan is a great idea, I have not fully educate my self about this crypto loan but I know binance CEX has the feature where you can take a crypto/fiat loan and deposit another Coin, it could be BTC (your asset) as Collateral (https://www.binance.com/en/loan).
Instead of selling my Bitcoin for a cheap price, I'd rather go for the crypto loan.

[minime0105]

From all I understand in your post, your talking about crypto loan. Selling my Bitcoin again...? No, I would not do that. Crypto loan is a great idea, I have not fully educate my self about this crypto loan but I know binance CEX has the feature where you can take a crypto/fiat loan and deposit another Coin, it could be BTC (your asset) as Collateral (https://www.binance.com/en/loan).
Instead of selling my Bitcoin for a cheap price, I'd rather go for the crypto loan.

The thing it was trying to explain is a cryptocurrency loan as you said but it did not put it well not if you can understand taking loan 4 BTC and convert to Fiat currency it's not really bad idea but it can fall to the head or the person you borrow the money from because Fiat currency value is not really grow like cryptocurrency kind of market appreciation. Because i noticed that cryptocurrency is the way and it value do increase every day

[Ozero]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

I don't think this is a good idea. I think that you, speaking of a loan, do not have an interest-free loan, but a loan that must be repaid with decent interest. In your fantasizing, the possibility of returning the borrowed money is not considered at all. And this is the most important thing in your plan. Bitcoin has a high price volatility and it is very risky to take out a loan, relying on the rising price of Bitcoin, since its growth is accompanied by periodic very low and long price drops, as at the present time.
In addition, you should not expect that bitcoin or another cryptocurrency will eventually replace fiat. This will never happen.

[2stout]

This is really playing with house money (gambling) and I highly advise against unless you got an equal part of that borrow in fiat.  Why?  For example, say you borrowed when BTC was $50k and then it dropped to $18k- you would have to deposit some funds so some liquidation against your BTC doesn't happen.  If you fail to do so, then some, if not all, of your BTC could be liquidated to fulfil collateral requirements.

[Silberman]

I had to read it many times to understand what is the point of you making a loan when you already have money that you invested in bitcoin and you can use it? I have a question:

The day you took your money and decided to buy bitcoin, what was your deal with it? your goal was to buy bitcoin and make hodl and never spend that bitcoin and you die without spending the bitcoin? was that your goal? or was your goal to buy bitcoin and hodl until it increased a lot and then you spent it in the real world?

when we make an investment the objective is to make a profit and then we use that profit, and we continue to invest and then we use the profit, always keeping the principal to generate more profit. it makes no sense to make a loan when you could sell a part of your bitcoins and leave another part until you had a big increase to make more profit

The OP is trying to outsmart the system, he is trying to avoid having to sell his coins by using a loan and in this way avoid paying capital gains taxes, now it is true that some whales can do movements like this but I really do not expect that your average investors can actually do something like this, I think that it is better to keep things simple and to not try to do some fancy moves like this one, if we have to sell our coins for some reason then just sell them, because if we were to do something like this and it does not work then the repercussions will be way worse than to pay taxes on our capital gains.

[Lambent]

I think it’s best if you decide to sell a small part of your coin and use that, so you don’t lose and you can still make profit. Borrowing isn’t a good idea, no matter what, but each to their own.

[Cookdata]

I think it’s best if you decide to sell a small part of your coin and use that, so you don’t lose and you can still make profit. Borrowing isn’t a good idea, no matter what, but each to their own.

The two are not a good idea, borrowing without proper calculation and selling a portion of your bitcoin is not a good idea either.
One of the major problems of Loan is Liquidation management, if you take a portion that is bigger than your collateral, you will receive a call to top it when the price is dropping and if your collateral get to a point where it can no longer settle your loan, they will be forced to close it. The best way to always use your coin as collateral for loans is when the price is pumping or take a little loan with over collaterized bitcoins, so you don't get margin calls when you are not ready to settle your debts.

Selling your coins is also not a good option, if you sell them at low prices, you may never have the opportunity to enter them again and will have to pay multiple times the initial price amount you sold. However, if you are in need of money and have no other options, please sell and solve your problems, bitcoin will not run, and you can always optin again and again.

[ethereumhunter]

I think it’s best if you decide to sell a small part of your coin and use that, so you don’t lose and you can still make profit. Borrowing isn’t a good idea, no matter what, but each to their own.

If you can trade, maybe borrowing money is a good idea because you can use it to trade and try to make a profit so you can repay the loan later. But if you are borrowing just to buy bitcoins, you have to think about how to repay the loan because the bitcoin market is very volatile and there is no guarantee that you will make a profit when it is time to repay the loan. So you should be careful if you want to borrow money and consider the risks.

[Solosanz]

If you can trade, maybe borrowing money is a good idea because you can use it to trade and try to make a profit so you can repay the loan later. But if you are borrowing just to buy bitcoins, you have to think about how to repay the loan because the bitcoin market is very volatile and there is no guarantee that you will make a profit when it is time to repay the loan. So you should be careful if you want to borrow money and consider the risks.

I'd say borrowing money to invest on Bitcoin is safer than borrowing money to trade because trading has more higher risk to lose your money while investment, you're only need to wait until Bitcoin cross to bullish season. Based on the history, you need to wait at least 4 years to get good profit, so if you can calculate how much the interest you will pay after 4 years and predict how much the Bitcoin price after 4 years, it will be good.

Trading you're against the market and other traders who want to make a profit, it's really hard.

[ethereumhunter]

If you can trade, maybe borrowing money is a good idea because you can use it to trade and try to make a profit so you can repay the loan later. But if you are borrowing just to buy bitcoins, you have to think about how to repay the loan because the bitcoin market is very volatile and there is no guarantee that you will make a profit when it is time to repay the loan. So you should be careful if you want to borrow money and consider the risks.

I'd say borrowing money to invest on Bitcoin is safer than borrowing money to trade because trading has more higher risk to lose your money while investment, you're only need to wait until Bitcoin cross to bullish season. Based on the history, you need to wait at least 4 years to get good profit, so if you can calculate how much the interest you will pay after 4 years and predict how much the Bitcoin price after 4 years, it will be good.

Trading you're against the market and other traders who want to make a profit, it's really hard.

Indeed, there will be about 4 years before the crypto moves into a bullish season. But in those 4 years, there will be ups and downs that will frequently happen so you can profit from trading. That is why you should be able to analyze well before starting to trade to make a profit. It may be difficult at first but if you keep learning to analyze, you will be able to trade well. What you have to think about is how you pay off the loan money, especially if you don't have an income every month.

[naira]

snip~

Indeed, there will be about 4 years before the crypto moves into a bullish season. But in those 4 years, there will be ups and downs that will frequently happen so you can profit from trading. That is why you should be able to analyze well before starting to trade to make a profit. It may be difficult at first but if you keep learning to analyze, you will be able to trade well. What you have to think about is how you pay off the loan money, especially if you don't have an income every month.

Say borrowing money has to be repaid every month while borrowing to trade crypto is quite risky when you are not a really reliable trader. I don't recommend borrowing money to trade crypto, because I personally experienced it. An experience where I have done both options, namely borrow to trade crypto and borrow to invest. But if there is no interest on the loan, then you are not required to pay per month then you can invest. However, are there institutions that lend money without interest? certainly not !! because the borrowed money must continue to flow. Unless you borrow money from a rich relative and he doesn't demand you pay monthly.

I dare say that because of experiencing both options as I said. As a result, I borrowed about $1000 from my brother to buy Bitcoin ($6100) if I'm not mistaken in 2020 in March and it didn't take 4 years to release it because one year later it was bullish at around $58000. Again that doesn't mean it's effective for everyone, it's just that if you have enough money in savings to buy a few sats then never borrow.

[JohnBitCo]

Also remember that once you borrow fiat, you are giving the lender opportunity to make way much money using your collateral (Bitcoin) on top of charging you very high interest rates. If anything goes wrong and you default the loan, your valuable Bitcoins are gone.

I would rather sell a small portion of my bitcoins for survival, while I keep the rest for the future.

I would never like this idea of putting bitcoin as a Collateral. You can make money with bitcoin by selling it at high and buying back at high, i don't like this idea  of handing over your bitcoin to someone else and getting fiat money for that. What if the lender refused to return or does a scam or something ? the bitcoins are gone forever. 

[iamsange]

I think it’s best if you decide to sell a small part of your coin and use that, so you don’t lose and you can still make profit. Borrowing isn’t a good idea, no matter what, but each to their own.

Borrowing money from other parties is only more suitable for those whose profession as entrepreneurs are so that they can calculate their own profit for each month after deducting the installments that must be paid to the borrower. So this is definitely not suitable for those who do not have a particular business or company to turn their money through the products they produce.

[Ozero]

I think it’s best if you decide to sell a small part of your coin and use that, so you don’t lose and you can still make profit. Borrowing isn’t a good idea, no matter what, but each to their own.

Borrowing money from other parties is only more suitable for those whose profession as entrepreneurs are so that they can calculate their own profit for each month after deducting the installments that must be paid to the borrower. So this is definitely not suitable for those who do not have a particular business or company to turn their money through the products they produce.

Quite right. An interest-bearing loan or credit can be successfully used by businessmen when they have a regular income, but there are temporary difficulties in obtaining and distributing them. In other cases, the risk of loan default increases. This risk is multiplied if there is a cryptocurrency in this scheme, because no one can plan its price movements in advance. In addition, betting on the constant rise in the price of bitcoin is simply unreasonable. No one can know what will happen to the price of bitcoin in the next few years. In any case, such a risk is not for me.

[Bobrox]

I think it all depends on market conditions and your own wealth distribution. There are  men who made millions, from Bitcoin and there are men who invested at highs and sold at lower, because they could not stand the ups and downs. Borrowing money when the market is going to stay cool is a good idea. One can again take back their Bitcoin when the bull run starts...

Borrowing money when bitcoin still drop is good ideas but have another risk when using fund from loan to invest in cryptocurrency, some time out our controlling when bitcoin have another dip price after investing in lower price, need to find new way how to pay borrowing money used for investing in bitcoin. If have ability with lower loan interest I think worth used for investing from borrowing money but can't guarantee with your profit always.

Great opportunity looking on bitcoin still drop right now used borrowing money for investing in bitcoin, maybe one or two months later when bitcoin going up can pay borrowing as soon possible and not to be greedy used all borrowing money re investing again in bitcoin after reaching profit.

[gunhell16]

If you ask me OP I think you didn’t think this through. Let’s say I follow your instructions and decide to borrow Fiat using Bitcoin and at the point of be running the process bitcoin is 20k dollars and that’s I get 20k dollars Fiat. Let’s say at the time of repayment bitcoin goes up to to 30k how would the transaction be, and if who I borrowed the money from is knowledgeable about crypto-currency then it would be a major problem.

^ I think you did not understand as OP said, the BTC here is just collateral, whatever happens to the price still the BTC is the collateral.
Probably the point is, while BTC is at a low price or you know that your BTC will grow more in the future, instead of selling it directly to exchange, just use it as your collateral and borrow fiat which is fiat amount will remain the same as what you borrowed.
However, the problem here is where you will find a service that allows BTC as collateral and make sure it should be trusted.

That is the real question, whether the person who will lend OP fiat will agree to accept Bitcoin as collateral. Maybe, if the lender has an idea for bitcoin and believes in it, he will agree without hesitation.

But if the lender does not have enough knowledge about this, he will likely have second thoughts or he may not lend because he is hesitant about the bitcoin collateral.

[TribalBob]

I don't get you. Based on what I understood you're planning to borrow fiat once you've got enough bitcoin. Does this mean you're planning to borrow money placing bitcoin as the collateral. For borrowed money you need to pay regular interest.

Maybe this can turn to be effective, if the borrowed money is invested on something that brings you regular income.

Yes, if I need something, I would borrow the money instead of selling the Bitcoin to purchase it. Michael Saylor talks about this. If I have to pay 5% interest, but Bitcoin’s price raises over 5% a year, then I would be making money. If I sell the Bitcoin for fiat, then inflation will eat up that money. This is apparently what everyone from Elon Musk to Donald Trump does. They don’t actually have any money. They just have property, and borrow against the property because the property is more valuable than the cash.

maybe I'm one who is not the same as you, I'd better sell my bitcoins if I need money, especially since I'm just a casual worker, I save bitcoins for savings if I need money, compared to borrowing money with 5% interest, it's better if i release my btc, than i have to have debt and plus 5% bonus

[BobK71]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

As the market condition is very dip form the all time high, borrowing is a good decision if needed. Since the OP is saying that he doesn't have to pay any tax or anything extra. In that case you can borrow. But always thinking positively, borrowing or increasing investments can sometimes lead to major disasters.

[AicecreaME]

Instead borrowing fiat from a bank, or a loan shark, with a high interest, why not just wait for the bull run and sell half of your Bitcoin in the next ATH and use that to invest in properties, I guess that's much better than lending because if the bearish season will be like the past one, it's gonna take some years before it gets bullish again.

[Jeger.Kiting]

In situations like this, there is always some risk involved, and if you borrow fiat dollars as security for this, you will have to pay interest on the borrowed dollars. Platforms for financing are virtually astounding right now. In addition to being centralized and in control of your money, this business also has the potential to file for bankruptcy at any time, meaning the owner could depart at any time without warning. When the time comes, your Bitcoin will be destroyed, there is no chance for you to use the Bitcoin provided as collateral, and it is lost forever. Therefore, give these things some thought before you do them to avoid regret.

[ethereumhunter]

snip~

Indeed, there will be about 4 years before the crypto moves into a bullish season. But in those 4 years, there will be ups and downs that will frequently happen so you can profit from trading. That is why you should be able to analyze well before starting to trade to make a profit. It may be difficult at first but if you keep learning to analyze, you will be able to trade well. What you have to think about is how you pay off the loan money, especially if you don't have an income every month.

Say borrowing money has to be repaid every month while borrowing to trade crypto is quite risky when you are not a really reliable trader. I don't recommend borrowing money to trade crypto, because I personally experienced it. An experience where I have done both options, namely borrow to trade crypto and borrow to invest. But if there is no interest on the loan, then you are not required to pay per month then you can invest. However, are there institutions that lend money without interest? certainly not !! because the borrowed money must continue to flow. Unless you borrow money from a rich relative and he doesn't demand you pay monthly.

I dare say that because of experiencing both options as I said. As a result, I borrowed about $1000 from my brother to buy Bitcoin ($6100) if I'm not mistaken in 2020 in March and it didn't take 4 years to release it because one year later it was bullish at around $58000. Again that doesn't mean it's effective for everyone, it's just that if you have enough money in savings to buy a few sats then never borrow.

Indeed it is a risky action but it will return to the respective traders because if a trader already wants to try to focus on the crypto market and borrow some money, he will continue to work hard to achieve it. Before borrowing, you should consider it because it relates to many things. Don't let you get into trouble later when the time for payment arrives.

You are lucky if after you borrow from someone else, the price of bitcoin can increase dramatically and of course, you will get a big profit so you can return everything at once. But not many people can be like you because I met some friends who made the mistake of borrowing money to invest in crypto or to trade but weren't looking for more info on how to do it properly.

[AmoreJaz]

In situations like this, there is always some risk involved, and if you borrow fiat dollars as security for this, you will have to pay interest on the borrowed dollars. Platforms for financing are virtually astounding right now. In addition to being centralized and in control of your money, this business also has the potential to file for bankruptcy at any time, meaning the owner could depart at any time without warning. When the time comes, your Bitcoin will be destroyed, there is no chance for you to use the Bitcoin provided as collateral, and it is lost forever. Therefore, give these things some thought before you do them to avoid regret.

to be honest with this situation, i won't do what the OP is planning to do. unless, he has other resources that can back up his loan. also, when it comes to fiat loan, usually, you need to pay interest for certain period of time. do you think it is worth paying those interests while waiting for your bitcoin to get a good value? in this market, you'll never know what comes next. very risky if this is the only funds available to you. you may end up paying more because of the interest incurred during your loan term. and suddenly, the lending platform got away with your btc collateral, not only you but all the others who trusted their site! that's what you call bad fate.

[Pierre 2]

Yeah this was obvious exploit in monetary system. Under heavy inflation its best to borrow lot of money to buy precious things like cars, houses, gold where you can get direct advantage. Bitcoin is now another option. If you have wage, its best to borrow money, buy Bitcoin in bottom, cover your borrowed money with your wage, and take profits from Bitcoin. Its easiest get rich quick method I can see yet, its very risky. Never lose your job unless you become millionaire!

[Eternad]

Yeah this was obvious exploit in monetary system. Under heavy inflation its best to borrow lot of money to buy precious things like cars, houses, gold where you can get direct advantage. Bitcoin is now another option. If you have wage, its best to borrow money, buy Bitcoin in bottom, cover your borrowed money with your wage, and take profits from Bitcoin. Its easiest get rich quick method I can see yet, its very risky. Never lose your job unless you become millionaire!

Feds is increasing interest rates on loans and other commodities. I doubt that this is still a food idea since the plan is use Bitcoin as collateral but what if the interest rate of the loan increased while Bitcoin price decrease since its the direction of the market. The Op might end up lose all of his BTC holdings while still pays the interest of the loan since the value of the property is half the amount of Bitcoin while he didn’t consider paying the interest of his loan to his plan.

[TheUltraElite]

Instead borrowing fiat from a bank, or a loan shark, with a high interest, why not just wait for the bull run and sell half of your Bitcoin in the next ATH and use that to invest in properties, I guess that's much better than lending because if the bearish season will be like the past one, it's gonna take some years before it gets bullish again.

It can be managed without taking a loan but some people have the habit of taking a loan to start out on trading and not think of the consequences of a debt.

Few people actually want to start with their own capital directly kotha ven though they have to pay more from their pocket in case they lost money.

Cycling between the bull and bear cycles is what leads to good profits but slow indeed. Still it is the safer bet than taking a loan and going for trades with high risk than profit.

[angelomedhur6895]

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

[Sebas.tian]

Instead borrowing fiat from a bank, or a loan shark, with a high interest, why not just wait for the bull run and sell half of your Bitcoin in the next ATH and use that to invest in properties, I guess that's much better than lending because if the bearish season will be like the past one, it's gonna take some years before it gets bullish again.

Yes, that is the best way to overcome such challenges in the community,because borrow money from the bank or clubs to invest on bitcoin is not advisable to bitcoiners than to invest the little capital you have on bitcoin and wait for the bullish season to come before you can sell to make a huge income from your investment. Since we are still experiencing bearish market, I think any amount of money you invest on Bitcoin now, it will help you in future when the price of Bitcoin hit higher soon before you can sell to settle some debt you own than borrowing money to buy Bitcoin.

[CryptoHeadlineNews]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

It may seem like a smart idea by using Bitcoin as collateral for half of its worth in fiat currency, but to me, I'm the type of person who doesn't encourage borrowing at all, because I know how it feels to borrow, how it could put you in the state of unrest, sleepless night and makes you uncomfortable until finally paid off, as nobody can predict tomorrow. And one thing to always consider about borrowing is the interest rate, i.e is the interest rate high or is it low, and can I afford to pay such a rate or e.t.c. So for me, I rather prefer to be patient, save consistently and when I have enough funds, embark on that project I have in mind than borrow, just for peace of mind.

[Techkoy407]

I suggest, do not occasionally invest with borrowed money, it is very risky,
you do not know what the future investment will be like, even though bitcoin is quite promising, but you have to stay on guard for the possibility that is not good.

because if you invest or buy bitcoin with borrowed money, it will make you uncomfortable with the investment,
because there will be high anxiety and worry,
so my advice, invest with cold money to be more calm.

[KaliLinux]

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

If you do have enough Bitcoin in your possession this might mean you might not need to borrow because I would believe you have had enough to invest in that amount of Bitcoin. Why would you have to borrow when you know you would still be paying interest on the amount you borrowed or maybe you want to invest that cash in another profit-generating investment plus let us not forget that there is nothing wrong with taking profit from what you have invested over time. You can not HODL your Bitcoin investment forever without taking profit for yourself then why have you invested in the first place?

[justdimin]

Instead borrowing fiat from a bank, or a loan shark, with a high interest, why not just wait for the bull run and sell half of your Bitcoin in the next ATH and use that to invest in properties, I guess that's much better than lending because if the bearish season will be like the past one, it's gonna take some years before it gets bullish again.

Yes, that is the best way to overcome such challenges in the community,because borrow money from the bank or clubs to invest on bitcoin is not advisable to bitcoiners than to invest the little capital you have on bitcoin and wait for the bullish season to come before you can sell to make a huge income from your investment. Since we are still experiencing bearish market, I think any amount of money you invest on Bitcoin now, it will help you in future when the price of Bitcoin hit higher soon before you can sell to settle some debt you own than borrowing money to buy Bitcoin.

Depends on what type of loan you are getting. I talked about this before, since the price is low right now, if you could get a loan that you could repay back yourself then that’s not a bad loan. What is a bad loan? If you get it, and then you buy bitcoins with it, and you have to sell your coins to repay it back then it is a bad loan and you shouldn't take it.

But if you take it, and then you end up with paying it back without selling your coins, that means it was a good loan because you paid it back AND you have your coins staying. That’s a good loan and you should consider it. Learn the difference and you should be doing a lot better in the long run.

[Franctoshi]

I don't see anything wrong with this if you find any money lending bank that will grant you the loan, I think this depends on the duration of the loan, it will be fine if anything above 4 -10+ years for repayment period and during a zero or low interest rate period, but now the interest rate are on the high side for one to borrow.

However,  it could be a wise decision in the end. Michael Saylor sometime did borrow money to buy Bitcoin during the zero interest rate period before the last bull market, and I guess he must have paid off the loan because after that Bitcoin had that moon shot to 69k.

 But where I'm worried is the condition of the loan using Bitcoin as collateral , tell me are you gonna transfer the Bitcoin to them or what?

[isaac_clarke22]

~

Well obviously avoid it if you can. Don't invest if you don't have the money to do so. It is that simple. Surely there would be some people trying to justify that it could help your credit score, but who know what crypto will bring to your borrowed money in the next few years.

Is it a gain or nah? Imagine if you bought some Bitcoin back around when it was 64k, but then now it is 19.2k and your loan is almost reaching its repayment date.

[Cookdata]

If you do have enough Bitcoin in your possession this might mean you might not need to borrow because I would believe you have had enough to invest in that amount of Bitcoin. Why would you have to borrow when you know you would still be paying interest on the amount you borrowed or maybe you want to invest that cash in another profit-generating investment plus let us not forget that there is nothing wrong with taking profit from what you have invested over time. You can not HODL your Bitcoin investment forever without taking profit for yourself then why have you invested in the first place?

Life is challenging and very complex my dear friend!
Do you remember some time ago when Elon Musk decided to sell some of their Bitcoins? They claimed they needed some liquidity for future expenditure, I don't know how true this claim is but if at all Tesla actually has a platform they can take borrow that from, the bitcoin they sold would have acted as collateral for them because it is something they can pay back in future without selling their bitcoin but the question is, is there any decentralised protocol that can actually lend Tesla that kind of liquidity they needed? There is none and they were also not ready to take any risk with their bitcoin because most of the decentralized protocols that we have are full of shits that get exploited every time.

If you have your bitcoin as an investment and you need some cash as an emergency for short time and you don't have any means, you can always borrow but you have to borrow less amount in a way that your bitcoin will be overcollateralized so that you don't get liquidated in case of a price crash and margin calls.

[CryptSafe]

Mortgaging your Bitcoin for Fiat is not a bad idea but i hope you fully put modalities in place to remedy any unforeseen future circumstances. Doing this would save you the idea of selling making you hodle for long. Selling your Bitcoin wouldn't be an option with this step as you would definitely have some fiat with you. However, it's not just borrowing with Bitcoin as a collateral what do you intend doing with the loan to get you profit because this should be your thought at first as you know it's a big risk to take. You just have to make a good investment on the loan so as to save you more money getting more Bitcoin as you know  Bitcoin price is volatile. This would have you to hodle your Bitcoin for long pending wen your loan is due for payment by then, you must have made more profit to acquiring more Bitcoin added to your portfolio.

[imamusma]

I don't like something difficult when I actually have an easy choice. I mean why hold bitcoin and give it as collateral for a loan while I can sell it if needed? If bitcoin is meant to be a long term investment, then I need to have a spare fund other than bitcoin that I can use, that's a basic plan before investing. If I really don't want to touch bitcoin when I need money, then I really need to have a reserve fund.

The OP can do it where it's probably best for him, but if it's me then I'm more likely to sell bitcoin as necessary if I no longer have spare funds to work with. Everything is risky due to price volatility, but anything complicated should probably be avoided.

[jostorres]

I don't see anything wrong with this if you find any money lending bank that will grant you the loan, I think this depends on the duration of the loan, it will be fine if anything above 4 -10+ years for repayment period and during a zero or low interest rate period, but now the interest rate are on the high side for one to borrow.

However,  it could be a wise decision in the end. Michael Saylor sometime did borrow money to buy Bitcoin during the zero interest rate period before the last bull market, and I guess he must have paid off the loan because after that Bitcoin had that moon shot to 69k.

 But where I'm worried is the condition of the loan using Bitcoin as collateral , tell me are you gonna transfer the Bitcoin to them or what?

4 to 10 years is too good to be true. On many lending companies that I inquire, their terms are only short. They need the money as soon as possible so that they can accommodate other loaners. The interest rate for them is also high and I think there is no such thing as zero interest rate because how can they earn that way? And what I know is that interest rate depends on the longevity of the loan.

The longer you pay it, the higher the interest you're going to pay but yes we need to transfer our collateral to the lender. This sounds risky but this is only for the protection of the lender. What if the loaner won't pay the money that they borrow?

[Antonas1]

Doesn't every loan have a time limit to repay? What if your scenario doesn't work? Let's imagine this: you borrow cash while you still have Bitcoins. But until the time limit of the loan, Bitcoin price drops drastically and you lose. Isn't that more inflict a financial loss? This is not a smart way to go.

[woez]

Does anyone else plan on doing this?

It is true that cash transfers may be expensive and time consuming, but banks should not charge this fee in the first place because the amount of money the bank charges for a loan depends on how much money people want to save.

Well, continuing from the topic of conversation above, I think Bitcoin has been used by many consumers because it eliminates the need to have a credit card. Instead, linking your bank account information directly to your Bitcoin wallet, this allows us to bypass middlemen and make transactions without involving large financial institutions.

While this is certainly a positive step in the right direction, the cash market benefits borrowers at the expense of borrowers.

[Antonas1]

~

Everybody knows how it can pay it loan and it's clear that every loans have it limit the way I'm seeing loan things, a loan itself is something i know that can be repay according to agreement time, taking a load from the someone and buy Bitcoin and that load itself is used to buy Bitcoin and Bitcoin falls unexpected, the loan most be pay back because an agreement

I don't get you. You are replaying my answer as though giving an explanation to me about what if OP scenario doesn't work. But after reading your answer, I think your words are empty. Can you use an easier phrase for me to understand?