Letās talk about selling Bitcoin š
What are your thoughts on selling Bitcoin to pay off debt like personal loans and credit cards?
In this scenario, you donāt have extra cash to pay the debt because you currently use your extra fiat to buy Bitcoin.
The purpose of selling in this scenario would be to pay off those debts and buy more Bitcoin with the funds freed up from monthly payments and interest.
What are your thoughts?
#asknostr
Good question.
Another idea maybe: get a loan against bitcoin if you can, and pay it back with that.
Also I expect dollar weakening, because they need weak dollar to pay back their loans.
But this means other countries might have to weaken their currency to not weaken their exports.
The thing I canāt yet wrap my head around is I can take out a btc backed loan to pay off my debts, but now I have new debt, incurring monthly interest, that still needs to be paid off, so we havenāt really moved at all, right? Kind of just kicking the can down the road
Yes, and no.
If you have a btc backed loan, your collateral (btc) accrue interest, because you never sold. And if btc raises more, than your interest, you won.
Actually this is how the rich lives.
Buy, borrow, die.
They buy investments, and take up loan, that costs less, then their gains.
But you have to be careful, not to get liquidated.
Also there is a type of loan, that has no monthly payment.
Would you not accrue more Bitcoin in the long term if you did not get a BTC backed loan but instead sold your Bitcoin to eliminate debt and bought more Bitcoin with the freed up funds?
Yes, your stack takes a hit in the short term but over time you acquire more than you would have since a BTC backed loan does not increase the amount of bitcoin you have.
I understand your point of appreciation but physically stacking with freed up money no longer going to debt may earn you more Bitcoin in the long run.
1. If you sell your btc to repay your loan, you will have less bitcoin, and more cash month by month to buy btc.
2. If you take a loan with btc as collateral to pay back your debt, you will have all btc, and still more cash month by month to buy btc, if you take a repay at maturity loan (no monthly payments.)
In theory, in option 2, you could roll over your loans infinitely, so you never have to sell your btc for fiat. But in this scenario, you will have to have a bigger stack, so you can post more collateral if btc hits bottom. So this scenario highly depends on your stack size to begin with. With too small stack, I would not do it. Also questionable if you can roll over infinitely.
Get rid of that CC debt ASAP
You would sell in this scenario to accomplish that?
PROTIP: You can just never pay off debts & keep loading up on #Bitcoin / #BTC. š¤
I would just pay off your debt as fast as possible and whatever you can spare goes into a DCA. There are ways to roll over debt on credit cards to new cards with 0% for a year. Not sure if itās better than just paying off the debt.
Yah pay off the personal debt and credit cards.. if it was like a mortgage donāt do it but the smaller stuff just pay offā¦
Depends how much debt weāre talking, but If your monthly payments are manageable I wouldnāt at this point. But if bitcoin pumped to 200k or something later this year, I would.
A huge thank you to everyone who gave their two sats on this note. I enjoy the perspective of other Bitcoiners. š¤
How bullish are you?
Chances are that your Bitcoin will more than outpace the growth of your debt. Think about it this way: If you spend a few million sats now to pay off your $5,000 of debt, it will have effectively cost you $10k to pay off your debt if Bitcoin doubles in value.
Now, it's true that money you have to spend on minimum payment amounts cuts into how much you can stack in the future, but you have to balance that with how long it will take you just to build back up to the amount you had before you sold. You might calculate it to be a relatively short amount of time, at the current price. But what if the price goes up significantly? Now you've missed out on that price increase, and it will take you longer and more money to buy back in just to get back to the same amount of sats you had to start with. Likely more money and time than it would have taken to just pay off your debt with USD monthly payments.
If you happen to know that we're at the top of a cycle, and that the price of Bitcoin is going to crash by 60%-80%, then it might make sense to sell now to pay off some debt, because you would be buying back in at lower prices and be able to build your stack back up much faster. But how confident can you be that this is the top? I think we still have a lot more upside this cycle.
Iām bullish. This is just a thought experiment to see other Bitcoinerās thoughts on selling.
I see your perspective and have thought the same. The only other solution I can think of to preserve oneās stack would be to stop buying all Bitcoin and elimnate debt. Once the debt in question is gone, resume Bitcoin purchases. Thoughts?
