Bitcoin borrowing?

[Jostle]

I have done it before in another "wrapped bitcoin" ecosystem. Where my bitcoin was "wrapped" on the blockchain. I deposited it in a defi protocol - borrowed USDC against it, for around 4% APY.  Used that USDC to put into another defi protocol for an 11% APY yield. So I "arbitrage" 7%. However, the risks remain high. If the first defi protocol went scam or shut down, I lose all my bitcoin. Truth be told, it was hacked but also recovered.

I don't think I would do it anymore now, unless the counterparty is extremely trustworthy.  In the future, if bitcoin is ever "regulated" in the country I lived, and it becomes available to borrow against (in a mainstream manner), I would do it again. Provided it has acceptable loan rates (3 or less percentage)

[TheUltraElite]

You can use bitcoin as collateral to get altcoin loan or use altcoins as collateral to get bitcoin loan. Either way works, depending on what type of use you have of that asset you are getting. Of course I never suggest people to trade with money that they have borrowed but I guess if a survey was done, this would be the biggest share of the pie along with gambling.

I have personally never take any such loans and would not take any because I have enough credit available on fiat based system that I can use when and where I wish to. I perfer to keep my debt zero and hence my spending are limited so as to avoid getting into a debt trap.

[Hyphen(-)]

You can use bitcoin as collateral to get altcoin loan or use altcoins as collateral to get bitcoin loan. Either way works, depending on what type of use you have of that asset you are getting. Of course I never suggest people to trade with money that they have borrowed but I guess if a survey was done, this would be the biggest share of the pie along with gambling.

I have personally never take any such loans and would not take any because I have enough credit available on fiat based system that I can use when and where I wish to. I perfer to keep my debt zero and hence my spending are limited so as to avoid getting into a debt trap.

Personally, I don’t think borrowing money is bad, but borrowing Bitcoin or any altcoin is bad to me, I will rather take stable coin instead so that the volatility of the crypto market will not affect t the loan terms and the value of the money I borrows because the market can go bullish sometimes, you can’t control it and it will affect t your payback plan as well.

Furthermore, I don’t want taking loan to invest in any crypto even if it is Bitcoin, I will rather wait to have some money I can afford to save for long to use in buying the Bitcoin than taking loan to buy or trade crypto. I have no where to rush to, it can be taken step by step.

[lovesmayfamilis]

Personally, I don’t think borrowing money is bad, but borrowing Bitcoin or any altcoin is bad to me, I will rather take stable coin instead so that the volatility of the crypto market will not affect t the loan terms and the value of the money I borrows because the market can go bullish sometimes, you can’t control it and it will affect t your payback plan as well.

Furthermore, I don’t want taking loan to invest in any crypto even if it is Bitcoin, I will rather wait to have some money I can afford to save for long to use in buying the Bitcoin than taking loan to buy or trade crypto. I have no where to rush to, it can be taken step by step.

Yes, it makes a big difference whether you take money in fiat currency or in crypto. Of course, it would be better to give up such actions altogether and learn to live with what we have, but unfortunately, the world is now living in debt. Honestly, taking out a crypto loan is a surefire way to turn gray ahead of time.: most often, according to the law of greed, something will happen that can lead to an increase in our debts instead of the expected profit. Therefore, if there are no global events in life, it is better to give up life on credit altogether, because no one knows the future, and debts always need to be repaid.

[Free Market Capitalist]

I'd love to hear your opinions on if/why you borrowed against your Bitcoin?

Do you think it worked as you wished? Is it worth it?

No way. That idea was popularized by Michael Saylor in recent years and has left more than a few who heeded his advice with a bitter taste in their mouths. Borrowing against your assets is a typical strategy for high-net-worth individuals, but they usually do so with a low debt-to-equity ratio. The impulsive retail investor who listened to the message and borrowed against his $10K in Bitcoin when it was at $125K ended up getting wiped out.

In general, if your financial net worth (excluding the home you live in) isn’t at least a few million, it’s not worth experimenting with borrowing against your assets. Doing so with smaller amounts might work out if you’re smart and disciplined—but only if you remember that debt equals risk, and more debt equals more risk.

[Zigabel]

Hey y'all,

I'd love to hear your opinions on if/why you borrowed against your Bitcoin?

Do you think it worked as you wished? Is it worth it?

Cheers

There are times when you make an investment and because you may be at loss or the investment has not yielded the amount of projected profit expected it will yield, you will rather source for funds elsewhere to do whatever it is you may want to do rather than harvesting your investment prematurely. This is one reason, another could be that at the time your wallet seem inaccessible and the need for which you are wanting to fund is urgent such that before you will get access to your wallet and carry out a transaction, the time may be far spent and you may not meet up on the supposed reason for which you wanted the funds. and yes sometimes it is worth it for Bitcoin, especially during Bull seasons, a little more wait could increase the profit from what it was as at the time you wanted to get the profit, so it becomes better to rather get the funds elsewhere and then repay back later after you must have gotten your profit from the Bitcoin investment. There are other reasons for which someone may want to borrow rather than using their Bitcoin at the time.

[Nathrixxx]

I don't know where some people get the idea of borrowing Bitcoin from, but to me, it's totally a no-go; I can't take on this for any reason. Bitcoin is expected to be invested when we have the capacity to afford investing in it. There are many ways we can invest in Bitcoin if we take our time to either earn it, mine it, or get it as a free offer. Some can even exchange their Fiat to hold Bitcoin and turn it into an investment asset.

[AYOBA]

Well it depends on how you see it. Folks take loans just so they can avoid selling off their Bitcoin unnecessarily for any reason. It's easy to say that way you get to continue holding, and even if you want to pay back, you can as well pay using your normal daily or monthly income rather than selling at a loss. That being said I will advise against borrowing big amounts though, because if the market was to just suddenly dip it can actually liquidate you easily. Even at that you will still have to consider the interest rate of the loan, dip or not. So yeah perhaps keeping your loan small would be better. That's all.....

Do you think take loan just for longs terms holding is advisable? Why ask this equation is that their some people that don’t have any sources of income and they have interest to invest in Bitcoin for a long period of time, if those kind of people take a loan and invest at the end it will not favour them. As we all know that Bitcoin is not stable the market is fluctuating all the time, if it happen that the duration of this loan is due to pay how do we expect him to pay back when he doesn’t have any other alternatives to pay back the loan?

And once the loan is overdue it will definitely affect his Bitcoin investment, and that is why is not advisable for anyone to take a loan just because of Bitcoin investment. Than buy the bitcoin and later sell at lose, I think is better to wait for the right time when your capable of buying and hold for periods of term.

[HajiBagi]

Just see it as someone has a land, but the person need money. The person may prefer not to sell the land just to avoid paying tax for the land sold and because he believes the land price in the next few years would have increased very well. These are the two main reasons someone can decide not to sell his asset or property, but borrow money instead.

You are not wrong about the reasons to want to use what you have; from your example, the land is collateral for a loan instead of selling it, but many people who have done that have lost their property to the lenders when they are unable to meet up with terms and conditions. It means you could also lose your bitcoin when used as collateral for a loan, so the terms and conditions, and importantly the interest rate for the loan, should be considered carefully.

You also have to consider the fact that the value of your Bitcoin is still affected by the market, and it will put you in a terrible position if the market takes a huge dip. You may be required to add something more of value as collateral for what you have collected.

Borrowing against your bitcoin is very risky, in my opinion, i will rather sell part of my bitcoin to use it than borrowing against my bitcoin because i don’t know what will happen if i couldn’t pay or meet up with the time to pay the debt, i will not argue with anyone who is capable of borrowing against his bitcoin because everyone have their own way of paying or know how to handle situations, but for someone to avoid putting themselves in a tight situation, it is better to sell part of your bitcoin and use it to solve your problem.

The first thing to come a person mind before borrowing against your bitcoin is that bitcoin is unpredictable, no one know what the price will be in a few minutes, you can not rely on bitcoin for your debt because you the price can drop or rise at any time, so that is a risk decision.

[Hamza2424]

Hey y'all,

I'd love to hear your opinions on if/why you borrowed against your Bitcoin?

Do you think it worked as you wished? Is it worth it?

Cheers

I have not borrowed against my coins yet, but if someone were to do it, they would do it for tax-saving purposes, as everyone has shared. But there is another benefit to it.

When you borrow money against your coins, custody of your coins is given to a centralized entity, and they are now responsible for them. If anything happens, like what happened with Coldcard or Ledger, then they will be responsible for it.

You just have to make sure they are a big entity with enough liquidity and a strong enough position in the market that they would be forced to repay you rather than leave the industry. That way, you pay little or almost no tax, get to use your money without even selling your coins, and have proper safety too. But you have to give up custody in these cases.

[Aanuoluwatofunmi]

Smart decision will always suggest not borrowing to invest in Bitcoin or to stake your bitcoin against any assets as collateral, we can't just jump into conclusion of doing something when we don't force sit to weigh down the opinions on whether it is going to be a profitable one or not.

[9ja Amaka]

Can't think of a scenario where I did take borrowed cash using my Bitcoin as collateral. Basically, I've used other assets as many would say they used land to take borrowed cash.

In my time, I used LTC because I have a little of it that could serve as collateral. Bitcoin is too volatile to be used for collateral. If the deadline to return the borrowed cash is exceeded, perhaps by a small margin, the lender will not hesitate to sell off the Bitcoin for profit when the price increases.

[salad daging]

Why borrow bitcoin? Trade, investment, casino or other needs?
Loan = means there must be interest paid, so for me this will not be worth the risk that is too high, meaning you do not need to force anything if you can not afford there are other ways that I think is better to do.
Some platforms offer loans with bitcoin, but I feel it is not good then it will not do it, I'm sure the majority here do not do it.

[Zoomic]

It's okay to borrow against Bitcoin but that's when there's a good loan payment plan set outside to fully repay.

It's only when one borrows because they are expecting Bitcoin to pump so they can repay their loan from the price increase that I consider them unwise because the market can actually go against them.

Bitcoin is a long-term asset for many of us but that is not enough reason to take unnecessary risks just to avoid selling some of it.

[Obsidian Games]

Not really a fan of borrowing or lending crpyto just my personal opinion.

[Alphakilo]

It's okay to borrow against Bitcoin but that's when there's a good loan payment plan set outside to fully repay.

It's only when one borrows because they are expecting Bitcoin to pump so they can repay their loan from the price increase that I consider them unwise because the market can actually go against them.

Bitcoin is a long-term asset for many of us but that is not enough reason to take unnecessary risks just to avoid selling some of it.

If I have to borrow against my Bitcoin investment, it would be because I am sure I can repay the loan without losing my Bitcoin investment and also because I believe the loan should be higher than the Bitcoin am dropping as collateral. Otherwise, why borrow when I can easily liquidate my asset in a bull season to sort my problem and continue accumulation as microstrategy has done in the past and keeps doing as a better option than borrowing to repay with interest.

[As-Soon-As]

Hey y'all,
I'd love to hear your opinions on if/why you borrowed against your Bitcoin?
Do you think it worked as you wished? Is it worth it?
Cheers

If you are holding Bitcoin, you should not borrow to hold Bitcoin, as this is the most likely way to cause you to lose. If you borrow, you must repay it, you will be helpless to pay some interest on the money you borrow. As a result, such a situation will arise, even if you sell your Bitcoin investment at a loss, you will have to pay it back on that day, so you should definitely not take a loan for Bitcoin investment.
However, you can definitely use discretionary income to invest in Bitcoin, if you have a good balance, you can buy Bitcoin using a large amount of money,
and if your income is low, you can invest in Bitcoin with a small amount. There is no fixed amount to invest in Bitcoin, you can invest according to your ability.

[skjwkn]

Thanks y'all for the discussion. If you have any experience in borrowing stablecoin onchain and actively running some strategies to earn yield while holding bitcoin, would love to know. I believe Nexo is centralized, like an exchange.

[bhadz]

I don't know where some people get the idea of borrowing Bitcoin from, but to me, it's totally a no-go; I can't take on this for any reason.

It is not different from lending in banks with the use of your assets. Jewelry, real estate, cars, and other things that have a value that the bank can use as collateral. The idea is to save your bitcoin but use it at the same time without actually selling it and you get the money out of its value.

Bitcoin is expected to be invested when we have the capacity to afford investing in it. There are many ways we can invest in Bitcoin if we take our time to either earn it, mine it, or get it as a free offer. Some can even exchange their Fiat to hold Bitcoin and turn it into an investment asset.

That is one of its purposes when we have already invested and own it. You can take a loan against but just as you, I don't think that I'll be doing it. I don't like the idea of paying with interest while the lender has got my bitcoins and if some unknown occurrence that I am not able to pay it, they're going to take it from me wholly.

I believe Nexo is centralized, like an exchange.

It is an exchange, a centralized exchange.

[Nothingtodo]

Hey y'all,

I'd love to hear your opinions on if/why you borrowed against your Bitcoin?

Do you think it worked as you wished? Is it worth it?

Cheers

No I have not had any experience so far where I can borrow money against Bitcoin or use Bitcoin as collateral.

Bitcoin is not legal in my country yet and the government is still against Bitcoin. So at the moment, there is no such collateral system in my country where you can deposit Bitcoin in a bank and receive money or a law has been issued to accept cash by depositing Bitcoin with an NGO.