would you use your bitcoin as collateral for a loan? \ stacker news ~bitcoin

would you use your bitcoin as collateral for a loan?

4168 sats \ 44 comments \ @brandonsbytes 7 Feb bitcoin

yes61.3%

no38.7%

75 votes \ poll ended

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883 sats \ 1 reply \ @hodlpleb 7 Feb

Yes, in 10-20 years #380081

34 sats \ 0 replies \ @lv99slacker 7 Feb

Same.

230 sats \ 1 reply \ @TomK 7 Feb

no, I know the economic argument, but in my experience there is nothing better in life than being independent, having no debts and not being in credit with anyone.

22 sats \ 0 replies \ @brandonsbytes OP 7 Feb

i lean your way too. cash is king, if that cash is bitcoin, but not Bitcoin Cash, haha!

174 sats \ 1 reply \ @cryotosensei 7 Feb

No way. Never leverage, never get into collateral. I spend a lot of effort accumulating my sats. I don’t want to risk all out there

0 sats \ 0 replies \ @sugarfix 7 Feb freebie

It would be a cheap way of exchanging crypto for sovereign fiat without KYC

174 sats \ 0 replies \ @Natalia 7 Feb

no, having debts ruin peace of mind, not to mention the risk of someone take away your Bitcoin.

32 sats \ 2 replies \ @OT 7 Feb

If its long term like 5 or 10 years.

I made some mistakes last cycle playing with this. Its not worth it.

0 sats \ 1 reply \ @brandonsbytes OP 7 Feb

what were the mistakes? if you can share.

122 sats \ 0 replies \ @OT 7 Feb

Using BTC collateral to borrow USD and buy more bitcoin.

Loans on hodlhodl and Ledn only go up to 1 year. I guess in hindsight I was influenced by Saylor. It was working well until it wasn't. At $50k I didn't think it would ever break $20k. It did and I got liquidated.

So the lesson was a good one. Lucky I didn't bet my whole stack and learned to DCA.

So for me to do this again I'd need enough collateral for a 90% drawdown and a loan that lasts for 5-10 years. Interest rates would have to come down too. Maybe 5% or so.

47 sats \ 0 replies \ @KLT 7 Feb

I thought long and hard about this and I think I’ll just use fiat, get a loan with a low interest rate and then use the remaining cash flow to stack sats and consider using appreciated sats to pay down the loan, or not

28 sats \ 2 replies \ @fred 7 Feb

Yes I use it for loans presently

11 sats \ 1 reply \ @brandonsbytes OP 7 Feb

so you’ve done it a few times? with any particular organization you’d be willing to share?

21 sats \ 0 replies \ @fred 7 Feb

I'm using Binance for now but looking to moving it out

27 sats \ 2 replies \ @0359d785c8 7 Feb freebie

Did it. Still haven't payed. Waiting for Bitcoin to go higher before. Take the loan about 20k.

27 sats \ 1 reply \ @oliverweiss 7 Feb

Could you maybe share more details? What service you used?

21 sats \ 0 replies \ @0359d785c8 9 Feb

Exchange allowed me to use Bitcoin as collateral, since we where in the bear market the risk of being liquidated was low.

Exchange was www.buda.com

45 sats \ 0 replies \ @f6287b82CC84bcbd 7 Feb

Until fiat dies, its great for accuumating more fiat to also buy more bitcoin and to invest in projects which help with adoption or to help with accuumating more SATs

42 sats \ 2 replies \ @arrivederci 7 Feb

While the bitcoin backed loan market is still relatively immature, interest rates are still quite high. But they should come down as the industry matures because BTC is absolutely the best form of collateral there is (e.g. superior to RE, which is much, much less liquid than BTC).

11 sats \ 1 reply \ @brandonsbytes OP 7 Feb

good point in the interest rates hopefully coming down with more adoption. what do you think will make them come down? more big industry adoption, like with all this ETF stuff?

21 sats \ 0 replies \ @arrivederci 8 Feb

I think just more lenders realising the value of BTC as collateral and how easy it is to make loans against it (can do it all online and even without having to know the identity of the debtor or check their credit worthiness). And once they realise this, them looking at how good the returns presently are as a creditor. Right now as a lender you can get 15% p.a. and up for loaning out USD, basically risk free.

Competition between a greater number of lenders should then start bringing those interest rates down to where it's still an attractive return but not as high as presently.

31 sats \ 1 reply \ @freetx 7 Feb

Not exactly the same, but I've been thinking of getting a BTC denominated life insurance policy.

Its a whole-life policy and roughly the terms are pay 10 BTC in over 10 years - and receive 15 BTC at death.

The big draw of these types of arrangements is that you can borrow against the policy and pay no capital gains. So suppose that by year 5 the cash value (how much you've paid in) is at 5 BTC...this means you can borrow that 5 BTC (sell it or whatever) and then that loan gets deducted from the death benefit when you die (ie. so at death your estate receives 10 BTC payout not 15)

Obviously you need to trust the insurer...which I'm not totally sure I do. Not because I think they are shady, but simply will any company be around in 30 years? Will it even be possible for them to generate 15 BTC from my 10 BTC in "investments"....I dont know....but in theory its a solid approach.

1 sat \ 0 replies \ @brandonsbytes OP 7 Feb

Not because I think they are shady, but simply will any company be around in 30 years? Will it even be possible for them to generate 15 BTC from my 10 BTC in "investments"

great point. but, your idea in general is very interesting. how likely do you think it is to become a common practice?

21 sats \ 0 replies \ @OriginalSize 7 Feb

After you, Sir.

71 sats \ 0 replies \ @grayruby 7 Feb

I have used my bitcoin as collateral for a loan to acquire more bitcoin. It's a product offering that Ledn has called B2X loan. Say you deposit .1BTC they buy .1BTC on your behalf and you just need to maintain a certain collateral threshold.

Anyways I closed it out early when they became shitcoiners but it was a lucrative offering as I took it out around 19k and closed it out around 26k bitcoin price. I paid a couple hundred dollars in interest over the span of 15 months or so.

22 sats \ 2 replies \ @TheBTCManual 7 Feb

Lol hate to say it but with everything it depends, if you've got a large enough stack that you could pledge and have left over for collateral and you need the liquidity or its cheaper to tap into it than other financing methods yeah makes sense, but right now theres a lot of counter party risk with the platforms available

Sure you can try to do something on-chain like P2P lending but that comes with its own complexities and limited liquidity that might not meet your current needs

I think the space has to mature a lot more before we see a competitive market for products like this

0 sats \ 1 reply \ @brandonsbytes OP 7 Feb

i think you are right. what sort of maturing still needs to happen? just more serious players and common use cases for loans?

21 sats \ 0 replies \ @TheBTCManual 8 Feb

The asset class gets bigger, more liquidity so less vol, so people don't need to have have so much spare collateral in case it rips down like 50%, specialised institutions that focus on a use case, home loans, car loans etc.

the more options, the more we can figure out a market rate for loans in each sector, IE 3% for homes, %5 for cars etc 10% for short term loan and also from a tech stand point escrow services that can support on-chain, lightning etc

22 sats \ 0 replies \ @Fabs 7 Feb

You really wanna risk your stack for the chance of acquiring a small amount more?

Use fiat, that's what it's for after all; exchanging it for something of worth.

22 sats \ 0 replies \ @GregAsks 7 Feb

No, I don't want to send anybody my bitcoin.

21 sats \ 0 replies \ @kurszusz 7 Feb

My answer right now is a categoric NO. But after 4-5 halvings from now...it is possible...on this time 1 BTC will value more than $1M ;) Right now it is in the best place in my wallet...just to do nothing ;)

21 sats \ 0 replies \ @Roll 7 Feb

No, i won t.

As i want to keep it for my old days or tought days..

21 sats \ 0 replies \ @softglitter2d 7 Feb

Already did it in the past, went well..thinking doing it again

21 sats \ 1 reply \ @JuanMiguel 7 Feb

Too risky at the moment.

0 sats \ 0 replies \ @brandonsbytes OP 7 Feb

what is the main risk you see right now?

21 sats \ 0 replies \ @justanumber 7 Feb

At this stage, I don't know enough about it, haven't done the research. I'm definitely intrigued as to how that might help me in the future. At this stage I'm still in the process of stacking. Something for me to look into later.

21 sats \ 0 replies \ @nicosey 7 Feb

In the new world it maybe the only thing you own and maybe tax efficient to do so...

21 sats \ 0 replies \ @PRA3S3NT1A 7 Feb

Take a loan to buy more bitcoin ?

21 sats \ 1 reply \ @faithandcredit 7 Feb

What would you use the loan for?

0 sats \ 0 replies \ @brandonsbytes OP 7 Feb

my thought would be a house or maybe a business if it had a lot of start up costs.

21 sats \ 0 replies \ @john_doe 7 Feb

Answered no, because my consumption pattern is to consume if I can afford and if I should. I am lucky enough to have most of my wants satisfied by doing sports so that I can focus on buying more bitcoins (I say that but I just bought an unuseful board to try nerdminer hahaha)