Nostr Web Client

Making your "trading" decisions easy without predicting future prices.

Always dump fiat for bitcoin. You can call it dollar cost averaging, but this is simpler - if you don't need the fiat now (to pay rent), dump it.

Never sell bitcoin. If you need cash, use it as a collateral for a fiat loan. Shorting fiat (that loses value) and not deciding when you can spend (Bitcoin price does not matter that much).

You keep your btc value and if the rate of rising prices is higher than the interest rate (it mostly is), you can repay the loan later with less work. Or you can just keep the credit line open indefinitely. Also, when you don't sell btc, you don't pay taxes from the sale of btc.

So: always buy, never sell, spend whenever you need to.

https://hackyourself.io/product/how-to-harness-the-value-of-bitcoin-without-having-to-sell-it-ebook-mini-course/

Reply to this note

Please Login to reply.

Discussion

DireMunchkin 2y ago

Bitcoin backed loans are terrible though - A lot of people where doing this strategy 2021-2022 and most of them got rekt on it.

You need to have the loan be overcollateralized. I.E the Bitcoin needs to be worth 2x the dollar amount or some margin of safety like that.

When the Bitcoin price drops, which it will sometimes do, your custodian will margin call you. That is they will ask you for more BTC to post as collateral, within a short span of time.

If you don't have more collateral AND you are looking at your phone AND you can send it to them within a few hours, they will liquidate the collateral. That means market selling your Bitcoin at the bottom.

Also, you will need to give up custody of your Bitcoin in order to borrow against them, so that the custodian can liquidate you. This also exposes you to all the typical risks of custodians: Fractional reserve, rehypothecation, fraud et cetera.

Just selling your Bitcoin for cash if you need to for major spending is much safer.

Juraj 2y ago

All true, although I'm doing it for a long time and not getting rekt, because I understand the risks and I'm prepared for them.

For me it's better to take on a little risk in order not to pay taxes and not give away the upside.

The need to cover the risks is real though. There are more ways to do it, you can even have an option strategy to hedge the risk.

Here's a screenshot from a chapter of Cryptocurrencies - Hack your way to a better life table of content where I describe them in detail.

https://nostrcheck.me/media/public/nostrcheck.me_7761521560205758791689586708.webp

DireMunchkin 2y ago

Fair enough. I do like the idea of borrowing instead of selling on paper, just not with a 24/7 margin callable loan. 😰

Personally I would just eat the opportunity cost of selling instead. But I also live in a jurisdiction with no cap gains tax, so YMMV.

Juraj 2y ago

I also live in jurisdiction without capital gains tax, but I want capital gains and by selling btc, I lose future capital gains of btc.

I have an easy system. Notification comes soon enough for me to react, I have the coins for topping up margin ready. For the past three years, I was topping up approximately once a year. My problem is the opposite: I should withdraw the collateral more often.