The new financial system is being constructed in front of us.
Instead of getting a Home Equity Line if Credit (HELOC) now you can get a Bitcoin Line of Credit (BLOC)
This product is better for those who don’t need a large lump sum 12 month loan but just need a monthly float to cover bills.
It starts at a crappy 13% APR
Product is live in Georgia and Massachusetts
Will roll out to other states and the world once the beta testing is over with these two states.
Maximum flexibility. You can open the account and use it like you would use any line of credit.
Target is to have a 15% loan to value ($150/$1000)
Jack created a cool calculator to see if BLOC can be useful for you
Disclaimer: I own shares in Strike and I use their loan products. Never been margin called or liquidated
What does mean loan to value? LTV?
collateral value vs the loan value....it's to protect the borrower from a margin call...
If it's not prying too much, have you used their loan products to get more bitcoin or have you used it avoid selling bitcoin? (these may be the same thing in the long run, but I guess I'm asking whether it's a play to lever up on bitcoin or to do smart tax stuff)?
I had a nice windfall and some debt to pay. So instead of paying the debt off I used the windfall and a bit of my own stack to open a loan.
I took the loan and paid off some nagging installment debt I had but at the same time I paid on principal as well so this latest draw down (I opened the loan near all time highs) I didn’t get liquidated. Darth tried to dunk on me but I’m no fool!
Here is my post about it #1261140
thanks for sharing those details. I have wondered about loans on bitcoin but never used them. when the price comes down like this, they do start to look attractive.
Yeah it’s much better to open them in bear markets. But you need to post more bitcoin. Plus states have minimum loan amount. So let’s say you only need $5k well the state law can make you take out a $12k loan.
I think the BLOC can solve a lot of problems with people not wanting to sell bitcoin and don’t need a high dollar amount with term but yet need liquidity to live life and not sell to trigger a tax liability
woah 13% is a hefty rake.
Thats probably a real market rate for someone posting actual dollars...not just newly created bank "assets" out of thin air...
would you loan to anyone at 11%? No, you would buy bitcoin and get 45%/yr... I assume thats what the customer gets (11%) and strike gets 2%
Mortgages are crazy fake money creation but so are auto loans, so of course you can get rates lower than inflation
That might be the market rate for someone posting actual dollars but if I am paying 13% and they can borrow at 6% why wouldn’t they just borrow (newly created fiat), lend it to me and capture the spread?
Where can they borrow at 6%? Maybe if banks start offering loans but I think Strike is juat a maker and 11% is what they have to offer...just my limited understanding though. Not the cheapest source of fiat credit but if you are tapped on the HELOC and other cheaper options...it works great
Sorry I am thinking of rates here in Canada. You can borrow secured around 5% and unsecured around 7.5%.
from banks right? banks are lending $100 for every $10 of book assets, so they can offer a lower than market rate.
No one that actually had to earn the money would risk it for 5%
True market interest rates are probably 10-13%, if currency is inflating at 8%, the risk premium is 2-5% which seems about right for a low risk loan.
15% LTV is really, really bad. Especially with those rates. It's not even close to competitors.
People using these services are fucking stupid!