Thinking about playing with a small Bitcoin backed loan to buy a new vehicle.
There are obvious risks with doing this, especially with a large stack percentage, but I think it could be cool for conservative toe dippers like me. If the thesis is correct, the car should be free over time. Again, with risks. One being that you can't roll the loan over as expected and have to liquidate to pay it all back at once. Definitely wouldn't do this with large amounts.
Anyone trying this strategy?
I am waiting for strike "credit line" product to be opened in my country.
So far I did not find an option that would allow to easily have loan where I never pay the principal.
Also interest is quite big .. My Bank can give me 9% loan with no collateral..
Strike lets you refinance the minimum principle if you pay the interest off up to that point. At least they say they will. The risk is if that isn't true for some reason and you're forced to sell, which is why I wouldn't do this for a large percentage of sats.
As for zero collateral, every auto loan I know of in the US uses at least the vehicle as collateral. They hold the title. And you have to have fiat income to satisfy them and pay monthly on loan and interest. Strike allows payment at maturity or refinancing (again, they say, with risks of that not being true at some point).
I don't know of any bank in the US that just hands out 30-50k on a promise. Maybe a business loan, but not for consumer purchases that I know of outside of credit cards with much higher than 13% interest these days.
And the income requirement to get a car worth of credit card, if a dealership will even take it as payment (with all the risks of chargeback and whatever), is pretty high.
Search #LavaXYZ bitcoin-backed Line of Credit... available anywhere 😉
Uu looks good, however I need euro .. maybe I can use revolut to swap ..
I had seen EUR option in old version of nostr:nprofile1qqs2wn8h6dw8snma59c93yzuan0tjhwk67vf7w9erj43cxwpx7umsts8rj46g, but unable to find it again in latest version... or I might be wrong... might be confused with too many #BitcoinBackedLoan startups during my research 🤣For EUR, you may check nostr:nprofile1qqsp7vxc8zn6xp768ygrrdl6m6qfplmjprha27r6rauyq849v2f9a6s2r5hm2 too
Are you all-in on Bitcoin already? I.e you don’t hold any meaningful amount of dollars anymore?
Yeah I have enough fiat in a bank account for fiat only bills for about a month with a small float, but even that's probably going to be replaced with Strike direct deposit and bill pay soon (to pay off a credit card for the fiat bills, Privacy.com debits, and rent) using Bitcoin that my fiat check gets converted into. That's my exposure to fiat at this point. I try not to hold it for long.
Ok yeah just would advise not I skipping rungs on the ladder of conviction, which it sounds like you aren’t doing here with this consideration.
I’m neutral on the loans. I would appreciate a breakdown from someone explaining with numbers and examples how advantageous it is to pay the interest on the loan versus the capital gains tax on the corn.
Personally, I’m not taking any loans on my bitcoin anytime soon. I’ll let everyone else beta test that for the next 5-10 years
That's smart and I'm not either on anything significant. I probably never will since I'm so conservative. But a car isn't that big of a deal for me. I'd live in the worst case, which is liquidation.
As for the taxes, that isn't the real point since those are on just the nominal fiat gains anyway. The consideration for me is does Bitcoin's growth outpace the interest? Being conservative, I figure it will at least break even on 13%. That's way conservative, but shit happens. If Bitcoin grows 13% or lower what are we even doing here? It wouldn't be keeping pace with US inflation at least (if you believe CPI is bullshit). Maybe I'd still use it for other reasons, but SOV would be dead. Might as well use fucking Monero at that point.
Anyway, that's where my thinking is. I come here to be called retarded and educated on what I'm missing 😂
This whole thing started with me not wanting to sell my Bitcoin and take a tax hit when I can just get a strike loan and pay less interest than the typical CAGR. BUT, a key point is that I could sell the sats I'm handing to Strike and be okay. I just don't see the point if I'm actually right about Bitcoin.
I question the timing. 3 green 1 red. Taking out a bitcoin loan right before a bear market crash couldn't be worse for you and couldn't be better for the custodian hoping to liquidate your Bitcoin during an 80% drawdown.
I've been around long enough to notice that the loan hype level pushed by influencers is inversely correlated to how wise a time it is to take out a bitcoin backed loan as a pleb.
I'd also note that unless you have shit credit you'll probably get better rates with a tradfi loan and your Bitcoin takes on no risk.
This type of loan will get more and more popular as time goes by, might as well feel out the water if it is a manageable amount. However the LTV requires more bitcoin than what the loan migjt be worth and if you get margin called very little warning time to either add even more bitcoin or pay fiat toward the loan amount.
Yeah, a consideration. It's definitely easier to ride out fiat loans during market turbulence. This is the main reason I think it's a bad idea to do this with large amounts. I'm essentially writing off the sats and hoping they don't liquidate. If they don't, I win. Has to be a line though to keep it safe.
I did. But I borrowed to buy more bitcoin 🤣 #MiniMicrostrategy
Honestly that makes a ton of sense if the thesis and math checks. That's one of the few ways left to out perform Bitcoin. I still won't do it for my ice cold sats though. A car or whatever is fun and games, but it is possible to get into trouble with this stuff.
