i still don't understand how borrowing against your bitcoin solves anything.
if i am 100% bitcoin and i take a loan against my bitcoin and buy a house or a laundromat etc...how do i pay back the loan?
don't i have to sell my bitcoin?
if i am 50% bitcoin and i take a loan against my bitcoin and buy a house or a laundromat etc...how do i keep accumulating more bitcoin?
i now have to pay back the loan with all my fiat
i think clown world just needs to learn how to live within its means
No .. it is not for 100 percent Bitcoiners ..
So if you wanna save part of your assets in Bitcoin .. and say you want them to serve as a collateral ( say upto 20 % ) for dollars without having to sell your Bitcoin .. and pay hefty fees ..
it is a good idea for businesses to meet their working capital requirements .. they will probably never use it ..
Btw ..you can do it with Tether Gold as also .. or a building too ..
hmm... still doesn't make sense...how does a business get out from under a 15% apr bitcoin to fiat loan?
Working capital current ratio = Current assets / Current liabilities
A working capital ratio greater than 1.0 means the company’s assets are kept ahead of its short-term debts. A working capital ratio somewhere between 1.2 and 2.0 is generally considered good. However, this varies depending on the industry.
Now imagine you want to adopt Bitcoin strategy for your treasury ( like MSTR ) ..
You can collatrize your Bitcoin to meet your working capital requirements .. you will probably never need to use that but auditors will have easy time certifying your business as healthy ..
Btw - this is just one use case .. there may be many more ..but as far as I see , I don't think it is any benefit to individual unless you are ultra rich .. in which case your own balance sheet is like a corporation:-)
this still makes zero sense. say i need 500k for my laundromat and have $1Mil in bitcoin (because i sweep cash flow to bitcoin).
if i take a loan against my bitcoin i need to run the business and sweep cash flow into the loan (interest + principle ).
now i can't accumulate $500k in bitcoin because i have pay back the loan
Exactly.
Just means every idea you have better be an amazing one
