Imagine you give strike $40,000 of bitcoin for a $20,000 cash loan in business A, you take the $20,000 and your greedy self buys bitcoin with it, deposit it again to strike, and get a $10,000 cash loan in business B.
Remember; this is a 12 month term loan. At 12% interest. Immediately you are signing up to pay the back $33,600 within 1 measly year. ($2665 per month) in order to get back the $60,000 in bitcoin.
The only thing that would need to happen for you to lose everything and still owe the debt back is bitcoin to drop in price 50% (which is rare to be fair) You would to lose your entire bitcoin position AND still owe $2665 per month, every month for an entire year.
You’re essentially betting that Bitcoin won’t fall 50% or more over the next year. If it does, you lose everything.
nostr:nevent1qqstugmxjn99qf8rpzcz29zakga36cds53kpv7ckjg9wyq5zerrakwgzyzkr76h7zavn7cvpq5fa4jdpu4zws7uuaydj05mm3rk937a2jq225qcyqqqqqqgffcsh7
1. You don't still have the payment if you get liquidated.
2. Liquidation at 80% LTV means you still have 20% of your BTC.
Please Login to reply.
1. Fair. I could see how that’s true. You’d still be out all the bitcoin.
2. Liquidation is not possible if you never gave them your bitcoin in the first place
Not all, 80%. And you could always post more collateral to protect.
2 is correct.
