We're nowhere near the state when borrowing against BTC is feasible.
As you just said, people are on all sorts of psychotropics asking for those absurd interest rates, plus the overcollateralization and the lack of safety (you lose control of your BTC and are forced to trust a third party, in the best case).
I keep stacking with the hope that one day not too far in the future the market will solve these issues and we will be able to use BTC without having to liquidate our holdings.