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67 sats \ 2 replies \ @j7hB75 13h \ on: 5 Thoughts On How A Bitcoin Backed Strike Loan Changed My Finance Habits econ
So, let me get this straight, you get a fiat loan that’s backed by Bitcoin. You can make monthly interest payments or pay principal and interest at the end of the term. Over the period of the term, you need to save in fiat to repay the principal as well as interest. This is where I’m conflicted. Why not just save in Bitcoin and pay your credit cards in fiat? I get that there’s upside during a bull market but timing the market is foolish. Just seems very risky and almost unnecessary. I get how it’s beneficial for Strike. Still waiting for someone to explain this simply enough to convince me.
Why not just save in Bitcoin and pay your credit cards in fiat?
It’s called leverage plus the price of bitcoin in the future might be more than it is today. Taking out a loan with steady fiat income is a gamble.
It’s risky and the prudent thing to do is use the fiat windfall pay off debt and stack DCA style with future cash flows. The problem with this strategy is that the Bitcoin price can run away from you thus stacking less sats instead of taking a loan and buying lump sum.