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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.

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wymike 8mo ago

Genuine question: which is the least likely, statistically speaking when looking at historical data?

A)12 months after any date Bitcoin will be up12% or more

B) During the 12 months after any date Bitcoin looses 50% of its value in fiat terms

C) During the 12 months after any date Bitcoin looses 80% of its value in fiat terms

If B and C are less likely that A some people will be a calculated bet that they can benefit from such a loan.

It’s not significantly different to getting a mortgage to buy a property and then borrowing again against that property to buy something else.

Sometimes it blows up in your face but this is also the playbook people use to increase their wealth.

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Discussion

Logen 8mo ago

I vow to never used a third party to place bets to “increase my wealth” my wealth is increased by working hard and buying the right asset

wymike 8mo ago

So you would never take out a mortgage to buy a house?

Logen 8mo ago

Buying a house has a utility value before it has a monetary value