Never take a loan against an asset that can drop 70% you will get margin called
Why would they sell and not take a loan against it? nostr:npub1cn4t4cd78nm900qc2hhqte5aa8c9njm6qkfzw95tszufwcwtcnsq7g3vle explained some motivations for why an OG would sell now (buying things with utility value) but why not buy those things with a dirty fiat loan and hold the hard money?
Discussion
You’re preaching to the choir my friend. I personally don’t think it’s a good idea or very aligned with the Bitcoin ethos. But there’s a lot of Bitcoiners out there who are doing it. Perhaps for people who want access to liquidity without having to sell their coins, it’s worth the risk. I’m sure lots of these people will get the best of both worlds (realizing some wealth of their coins without having to sell) without ever being margin called. It’s just an individual risk benefit analysis.
Some interesting data from chat gpt:
• For Bitcoin-backed loans (i.e., loans where Bitcoin is used as collateral), some platforms report significant volumes — e.g., one article notes that in the first half of 2024, one lender saw ~US$191 million in Bitcoin-backed loans. 
• Market size projections: one research piece estimates the global “Bitcoin Loan Market” was ~US$6.72 billion in 2023, forecasted to grow to ~US$59.44 billion by 2031. 
Links below