The loan terms from Strike are for 12 months, not forever. 😂 And as with any bitcoin loan they require you to maintain a certain LTV ratio (loan to value), which is affected by the market price of bitcoin. If bitcoin’s price within that 12 month period dips hard (as it often does in the short term), then you could face liquidation if you’re not able to post more collateral or immediately pay the loan down enough. Plus the custodial risk and the interest costs. Not worth it unless it’s an absolute last resort, and even then you risk less of your Bitcoin by just selling/spending some of it. These loan products need to improve significantly before they make much sense.
Discussion
I agree with everything you said.
My comment is more about the "hypercollateralized loan in bitcoin" in general, not this specific 12-month one. I don't know what the man in the photo said or represents.
About the contract in general:
As I said, the interest must be fair to the guarantee, it must be low.
Although I didn't say it explicitly, the contract needs to be long-term, because BTC is volatile, but it always appreciates against FIAT in the long term. I would say it would need to be at least 1 BTC cycle. And in the same way that you have to replenish the guarantee, there must be some clause releasing the surplus when it exceeds the agreed ratio for the hypercollateral.
And as I also said, you have to check the custody risk very carefully.
With that said, about the specific contract you are talking about, I agree with you.
On nostr:npub15ax0056u0p8hmgtstzg9emx7h9wad4ucnuutj89trsvuzdaehqhqdpc7af has no custodial risk.