BTC lending is getting interesting

[marrcelo]

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

I dont see right or wrong in this. Depends of the personality of the investor. Who has more bold profile can feel comfortable in take loan using Bitcoin as guarantee to seek bigger returns. Already who is more conservative prefer avoid this type of risk. The two paths can work or go wrong. In the end, weighs more the risk bias of each one.

[knuckey]

I don't want to bother borrowing to meet liquidity, I'd rather sell a small portion of my bitcoin, a simple step when I want to buy it back and the price is more expensive, I just consider it the interest from what I borrowed, besides selling won't always be a loss, borrowing for me is only a hassle if I have valuable assets to sell (Bitcoin)

[Qhunman]

If you are expecting to pay any loan you took with the interest you will get from bitcoin, then you are actually making a mistake because you really don’t know how long it will last for you to get profit from bitcoin, the best option is to look for another way to pay back the money even if it’s by installment as you have suggested.

From my perspective,taking loans to invests in bitcoin isn't a wrong, people can actually take loans as long as they have the means of paying them back without selling their bitcoin. The mistake some people make is is that they rely depend on their bitcoin profits to repay their loans without having any other source of income which is wrong because if bitcoin price isn't increasing as you planned and maybe your loan is due for payment you will be forced to sell part of your bitcoin to repay, so what I'm trying to say is that people can borrow money to invest as it isn't a bad idea but they shouldn't depend on their bitcoin profits to repay their loans instead they should have an alternative means of income.

[Nrcewker]

Rather than all this complications if you need money urgently and don't want to touch into your Bitcoin why don't you just get a loan normally without ever bringing your Bitcoin into play.

Getting a loan from a bank is not easy. You need to provide collateral or a mortgage and depending on the country and its crypto regulations, many banks might not even accept Bitcoin as collateral.

Lets say this is the situation that I have put all my money into Bitcoin, I dont have any other assets left and I need some money. How can someone give me a loan without any collateral, since I dont have any other assets? I think if the money is needed urgently or for something very important, selling the Bitcoin would be wiser. I mean at the end of the day, why are we investing so much? To live happily right? If selling the coins and getting the work done is possible then you should probably go with that OP.

[alastantiger]

I don't want to bother borrowing to meet liquidity, I'd rather sell a small portion of my bitcoin, a simple step when I want to buy it back and the price is more expensive, I just consider it the interest from what I borrowed, besides selling won't always be a loss, borrowing for me is only a hassle if I have valuable assets to sell (Bitcoin)

I would not mind putting my Bitcoin as collateral to borrow some money that I want to use for something important like my business or other things and when I make back the money then I can pay with interest but still get my Bitcoin in the exact amount I sent for the collateral back while the price of tBitcoin would have increased while it was been held as collaterals.

Before taking the loan I have to be sure that I can pay it back so I do not end up selling my Bitcoinsl. Borrowing is not bad when you have means of paying back but borrowing when you can not pay back, that is not a good decision to take and it will be better to sell some Bitcoin and cover your expenses while holding the rest and if you make more money in the future, you can buy more Bitcoin again.

[asriloni]

Bitcoin will never be used as a collateral because of its high volatile nature, using Bitcoin as a collateral will cause serious uncertainty for the lender and the loanee.
Rather than all this complications if you need money urgently and don't want to touch into your Bitcoin why don't you just get a loan normally without ever bringing your Bitcoin into play.

In fact, it does. Bitcoin is being used as an collateral in several defi and credit line platform such as Babylon and Nexo. You can borrow stable coin use native Bitcoin used as collateral in those platforms. The volatility can be sorted out by giving LTV to your loan, then it puts yourself as the one who has -

responsibility to maintain your Loan to Value always stay healty, otherwise your collater will be seized. The volatility is no longer a bollock that prevent an innovation to use bitcoin as a collateral.

[Obari]

One thing I’ve been wondering about lately:

If you’re holding BTC for the long term but suddenly need liquidity, selling it feels like you are about to lose your position and might never get it back at that price before you buy back in.

Borrowing against it makes more sense in theory, you get to keep the BTC, access liquidity, repay the loan, get your BTC back.

But the tricky part is doing this without introducing unnecessary custodians, bridges or wrapped BTC.

If native BTC can eventually be used as collateral while staying on Bitcoin, that could open up a pretty interesting lending market.

Would you personally borrow against BTC you plan to hold long term, or would you rather just sell a small portion?

It all depends on several factors and it depends on the situation in ground as well as the conditions surrounding the loan and it also depend hugely my standing position on bitcoin, if I'm in profit, sincerely the best option is to sell off some little portion but if I'm in a loss, I would prefer to take a loan against bitcoin especially if it's a long term loan.

Generally as an investor, your investment portfolio isn't something we should touching at every little problem that comes and that is why it has been advised severally that, we should only investment amount left after all expenses have been deducted including discretionary funds and by so doing, you wouldn't be triggered to touch our investment but rather fall back to our discretionary funds