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Why not simply spend the BTC?

Because why would I spend a scarce, appreciating asset like Bitcoin, when I can borrow against it for fake money, and let Bitcoins appreciation ‘pay’ down my loan over time

Same reason why someone wouldn’t sell their home if they need liquidity. Why would I sell my home that’s gaining value, if I can just borrow against it and get some liquidity to purchase what I need

I see where you’re coming from as a bitcoin-only business like yourself. However the world is still fiat. So until everyone accepts bitcoin, borrowing fiat against it for liquidity, is a much smarter move financially than to part ways with it

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Discussion

Leathermint 3mo ago

The difference is that the home is not liquid. It's not money. This is why you don't spend it and instead offer it as collateral. If I already have money in pocket, there is no reason to use it to get a loan of money.

But you say you don't want to spend it because it appreciate in value. And THIS is why this financial product actually exist for. It's a way to short fiat like I said before. The only reason to use good money to borrow bad money is to leverage the NGU of the good money.

Dylan 3mo ago

Okay so you get it. Then what’s your issue with it?

Leathermint 3mo ago

It's marketed as a revolution in finance when it is actually just an other tool to go leverage. I don't believe it helps restoring good market signals because this tool is not Bitcoin but rather a symptom of fiat.

My OP was saying this: "This is not a revolution in finance it's just a way to short fiat".

Leathermint 3mo ago

What I mean is that it's not much different than trading. You take such loan because you bet on NGU of Bitcoin.

The reason someone takes a real loan is because he bet on himself.

I consider the first one to be a form of shitcoining.

Leathermint 3mo ago

My position on this have nothing to about me running a business. I don't believe the people loaning their Bitcoin have and ever will have a significant impact on me. It might actually end up do publicity for Bitcoin and be good for me in the end.