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12% is crazy high

Not crazy high in comparison to other fiat loans out there. Yes, way higher than the 6-7% on a mortgage but way lower than credit cards. Pretty much in the ballpark of HELOCs or fixed 2nd loans people take out on their homes to get some cash.

This market will improve as time goes by, it will be much more beneficial in the future.

I’ve been in fiat lending for over 10 yrs and Bitcoin lending is really exciting. It will open up a ton of doors for people. I’m not sure if CJ Konstantinos is on Nostr but he has some great takes on the subject.

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Discussion

Ben Justman🍷 7mo ago 💬 1

Totally hear you on rates fitting in there.

But given the liquidation risk on the consumer and the decreased risk for the loan company, the rates are CRAZY high

kazlife 7mo ago

For sure. It just depends on where they get the capital from. We know it’s crazy high for the risk they’re taking (pretty much none) and so does Strike, but they don’t have the money required to run this lending operation. They get it from somewhere in fiat land where the understanding of BTC is completely different. Strike has to pay to get that money so they can lend it out. To make a profit, they charge 12%. Once the BTC lending market matures and fiat land realizes the risk of these loans, rates will naturally come down.