Agreed. By allowing temporary leverage it can facilitate the purchases of additional investments like other projects and assets without Bitcoin liquidation. The Bitcoin held is helping people and companies build their wealth through tapping part of the equity for growth actions. Solid tool in the toolbox.
Discussion
if the asset doesn't grow against bitcoin, it's a net loss, metoo
The asset only has to grow against the int rate of the bitcoin loan if only judged by growth in the loan period. Or more commonly, the loan can act as a bridge to refi the purchased asset or the revenue on the inventory etc. in this bredge loan case the int is a cost but hopefully is worth the gains after stabilization of the new asset. It’s a great tool.
You pay the loan back in fiat, and then get the bitcoin back. You’re not selling your bitcoin to acquire some asset that then needs to beat bitcoin appreciation, you just need to pay back the fiat you borrowed.
yes, but you obviously haven't tried entrepreneurship because if that loan costs you more than the collateral asset could have been sold for then you are still in arrears on your cashflow.
Selling assets incurs additional costs as well as relinquishing ownership. Quite often those factors make the decision to take a loan out an easy one vs selling.
HFSP tho, if you lend it when you would profit more by spending it as you need to during a bull run
especially right now, lending bitcoin for capex is a dumb idea, better plan is to phase your expenditure as much as you can, defer it because your passive gains are going to be better if you don't.
economy right now is in chaos because of the new regime in washington and it's affecting the global market all over the place. i'm cheering for efforts to disrupt things to reduce the asymmetries but right now my main concern is doing my job well and ensuring that my work doesn't get wasted on bad decisions about subjects i'm something of an expert in (eg, spam, social networks, network security in general, cryptography).
so, i'm just gonna say, all these companies racing to offer bitcoin loans are clearly seeing an opportunity to profit at the expense of enterprises, because it makes no sense to spend an asset that is growing proportionally to your holdings, versus other times when the growth is sub-inflation.
Your not lending any bitcoin. Your premise is totally false. You’re getting a loan using bitcoin as collateral. How can anyone take you seriously if your fundamental premise misunderstands the product?
The taxes part is what makes it make sense.