I've heard of solutions to leverage your bitcoin (which effectively frees up bitcoin for spending while keeping the returns, like a loan) all done natively on bitcoin. Could be an alternate way to do loans. Demand that instead maybe if you're against dollar loans? Just sayin'. Lnmarkets is a thing that exists, I hear tell.
Discussion
Don’t leverage your Bitcoin unless you are ready to lose it. Use it for savings, build those savings up, spend/sell some if you need to in order to afford life, and utilize fiat loans with much better terms for larger purchases (home, car, etc) if you need to. The current Bitcoin loan offerings suck majorly.
I currently don't have access to any borrowing with good terms, so I'll just keep working, saving and spending less than I get in.
That's highly speculative claim.
I took a bitcoin backed loan (to pay taxes lol) at 8% (50% LTV).
Fiat, non-backed loan was something like 15%.
I could sell bitcoin, giving gov. 15% and miss current bull run.
Why not set up a payment plan with the tax office? They are typically at a comparable interest rate to your 8% and you don’t have to leverage your bitcoin that way. There are so many options in almost every situation to explore BEFORE jumping to taking a loan with shit terms against your sats.
we can't do that in my country. The terms are horrible. Worse then loan sharks (and daily interest).
and I did my research, this was least shittiest option.
LNMarkets is futures and options not a fiat loan. Yes there is “borrowing” with leverage but very different than borrowing against bitcoin to buy a car or some shit.
Yeah but technically it still would free up bitcoin as if it was loaned to you, with the risk of liquidation of the collateral you place (or stop loss targets) and the work needed to manage that risk. It's like how investors use LEAPS to get exposure to a stock over a year or more without actually putting all of their collateral into the equivalent amount of equity for the same price fluctuation. That frees up more collateral to be used anywhere else because of the fungibility of money. So technically, it's the same, just with highly adjustable risk and risk management requirements.
Any form of loan involves speculation, like an investment. That's why corn is telling me to be humble and don't use loans.
Of course I'm invested in Strategy anyway so... lol! But it's a small part of my overall wealth.
Kind of I guess but collateral difference is huge ie strike you need 2x + collateral to secure fiat. Futures you can chose you’re leverage but lowest being 2x which would be .5 collateral going all the way up to 100x or .01 collateral. KYC vs Non. Etc. so it’s not exactly the same product it’s quite different.
Different product indeed, but some of the function is identical.
It's like a car vs a tank. Kind of the same thing, has a lot of the same parts and functions, but kind of isn't the same thing.