Several options.
1. Home baked loan with multisig
2. P2p with firefish or other entity acting as a broker
3. Defi
4. Futures
Also note:
- you can insure the collateral with options
- if your other option was to sell the collateral anyway, it might be a good option. I prefer not to sell btc.
- selling btc can have tax implications, loan is tax free
Yes, there are risks, I go through them in great detail. So it's not irresponsible when I explain all the risks (and I mean all).
That’s correct, if you point out all the risk in detail, it’s ok.
Still, I wouldn’t recommend it unless you really have to sell it. Especially putting your Bitcoin into Defi or giving it to a central entity bears great risk of losing all the collateral (history shows) and you have to overcollaterize a lot due to the high volatility. But it’s ok to have different opinions.
Agreed, but... You always "have to sell it". If your strategy is to always buy BTC (or you are earning BTC), you probably have some costs, unless you are living a 100% self-sustained life, grow your food on your property, ...
If you have fiat to spend, it means, you have not bought BTC with that fiat.
So if you earn 100% in btc (if you get fiat, you convert it to btc), then you always have to sell it sometimes. I just think that selling btc is way worse option than using it as collateral. You end up with much better position than by purely spending fiat. And that's true even if you got hacked/rugpulled, because as the btc collateral appreciates, you withdraw it.
I agree, still I am not gonna put my Bitcoin into Defi or give it to a centralized entity. However, the risk-reward profile in Germany is different, since we don’t pay taxes if you hold BTC > 1 year
You have a false dillema there. There are more options than DeFi or a centralized entity. Firefish is on Bitcoin network, P2P, without a single centralized entity. You can make a home-baked loan with your family or friends (multisig). You can buy a future (that replicates the loan) - both centralized and decentralized. You are risking much less than you borrow in this case.
BTW: In case of tax in Germany, do you need to report the holdings? Because that would be a no-go for me, if I have to report btc holdings to a centralized entity.
Firefish whitepaper here: https://docs.firefish.io/firefish-protocol
No you don’t have to.
Anyway, putting your Bitcoin into Defi and sending it to a centralized entity is ok for you, but reporting it to a centralized entity is a no-go? Doesn’t make sense to me.
For me both is a no-go
(I understand that there are other options, I am still not convinced to take any risk on this asset for some upside. I don’t like the risk reward profile)
For me, putting bitcoin into defi (not a centralized entity) is much more ok than reporting it to a state.
KYC with reporting is a hard no for me.
