Why would some loan another person USD at say 10% interest for one year instead of buying bitcoin which increases by 50% per year? What is the incentive?
Discussion
If it goes down then they can get margin called and they get it all
If true, that would be the reason behind it being only a one year loan and not four year.
It’s a trap that they want you to get in .
I hope that’s not true, but it being only for one year seems odd. Along with the argument of, it would be better for them to just buy bitcoin.
Investors just bet that you will overleverage, bear market will come and you will be liquidated and take up 20% of what is left from you.
I hope this is not the reason and I’m going to withhold judgment until nostr:nprofile1qqsvf646uxlreajhhsv9tms9u6w7nuzeedaqty38z69cpwyhv89ufcqpp4mhxue69uhkummn9ekx7mqpzpmhxue69uhkummnw3ezuamfdejs5qajr9 answers. But, this is my third time asking a pretty obvious basic question that nobody else has asked him yet.
Im not blaming Jack for doing it. People want it. Investors that lend fiat want bitcoin, and bitcoiners that borrow want fiat. Let them do the business however at this stage Strike seems to recreate Coinbase, because why not to go a step further and allow leverage trading.
For the same reason banks lend out money for people to buy houses.
The dollars come from thin air, and they get to collect that juicy interest. Banks can’t just print money from nothing and buy Bitcoin. The Fed and Gov won’t allow it.
Same here; they can conjure money from the ether and lend it out to Bitcoiners in order to collect interest.
Read ‘The Creature from Jekyll Island’
But we don’t know who is giving Strike the funds. If it is banks, what you say does make sense but if it’s private money it is financially smarter to just buy bitcoin.
If it’s not a bank, then they are probably using these loans to sell fixed income products to boomers and normies, offering somewhere between 8-10% yield, which is far superior to what US bonds would give them.