Bitcoin backed loans seems like the next great failure.
Discussion
If they allow me to get a loan without having to sell bitcoin to get the down payment, I am all for it! The less Bitcoin sold the better!
In both case you lose custody of your coins. I don't believe it's possible to loan somethings while remaining in custody of it.
I'm also having difficulty to imagine this practice to be sustainable. We're talking about people loaning their money so they can spend without spending their money.
There's something off here. But maybe I'm missing something.
It is guaranteed lost if I go with the traditional bank and need to sell it. In fact, the back laughed at me when I showed them a screenshot of some of my bitcoin when they needed to verify funds. I said that this was it. And they said that they can’t count it until it is in a bank account as dollars.
Going with a bitcoin backed mortgage would at least keep the bitcoin as bitcoin.
The idea being that as bitcoin goes up substantially in value you could decide at that point to sell off a smaller portion to pay off the mortgage or keep paying the interest rates that should continue to go down as the collateral value increases over time. Kind of like an adjustable rate mortgage but where interest rates drop as the collateral value increases.
At least that’s my understanding.
I’m only willing to play the fiat game because that is the game we’ve been handed. I might as well use their corrupt system to my advantage since it is their system that caused the cost of home construction to go up so much in the first place.
As far as custody, you are probably right. I think I might get to hold one of the keys but if I stop payments, the bitcoin is gone. Still better than losing Bitcoin for sure if selling to get cash for down payment .
It does seem that each cycle has its bitcoin related financial instrument. Hopefully the introduction of loans doesn’t signal the peak of the bull market! Although in a way it would be nice because it would let me stack more than if it reaches new highs!
If they are to be the next falling financial instrument I think it will take a few years to unfold. They might become semi mainstream and catch people by suprise.
But I'm not yet 100% confident in that take. It just makes all my sense scream danger.
I’m always leery of anything that wants my bitcoin.
Here we go again... if ur cashflow positive why would you do this? If ur not cashflow positive, why would you do this?
🤔
I'm likely staying away from them. If I did meddle with one, it would be for a very low percentage of my stack. And even then I'm in the black enough to just buy the shit I need. I get that there are benefits in deferring taxes but it doesn't seem worth the headache to me.
I’ve got a range of fiat duties to do today, but attempting to explore why Bitcoin backed loans might be the more ethical way to go……. then again, I’m no ethicist, so could have a few holes. 😘👌