Strike Lending explained by Jack Mallers
I wish this product had come sooner from Strike Lending with lower minimums. A personal experience:
Scenario:
I recently had 2 large unexpected expenses hit at the same time. Whats worse, the price of BTC dipped at exactly the same time. I don't keep idle fiat lying around for this. I have income, but I need dollars to cover my needs.
Options:
My traditional finance choices to borrow money were: some sort of personal loan, to delay credit card payments past the due date , or default on a necessary obligation. But with a credit check, origination fees, time delays and other frictions, it would have been too late anyway. Not to mention what lender wants to lend to someone with no liquidity and countless bank transfers to places like 'River' and 'Strike'?... Doesn't sound like a loan officer's ideal client.
Delaying credit card payments at who-the-hell-knows-what-ungodly-% AND taking a hit on my credit score? No way.
So, I had to sell some sats when the BTC price was down to $80k.
A better way?
Enter Strike Lending (if only it were sooner). There are many trade-offs to consider. Maybe I'm just a fan boy, but I'm already sold on it.
Rather than tapping into emergency sats to pay my obligations, I could have deposited sats on Strike and borrowed the cash I needed. My bank is already linked. Immediately I can withdraw USD, pay my obligations off in full, and work toward paying off my Strike loan. No selling required.
The terms of the loan are: 1 Year loan, 12% APR, 50% LTV, no origination fee, no early prepayment fee, no credit check, ready immediately.
Objections & Retort:
It's too many sats to keep on an exchange. I have to trust Strike not to run off with my sats. I lose access to the sats on Strike for the duration of the loan. 12% APR is stiff.
However, I could pay it off early. Let's say I pay it back in 2-3 months, my interest expense is cut down significantly. And the best part? I'd keep my sats which have rallied ~20%. As soon as the loan is repaid, I'd get my sats the hell off the exchange ASAP.
End the Story:
I'd be willing to accept these tradeoffs because - I did not want to sell sats at a bad time. But sometimes, life happens, and that's OK. That 12% loan is looking pretty damn tasty in hindsight. I'm glad we are getting tools and products to utilize if needed.
