It's incredible how many people casually suggest taking out a loan on your Bitcoin these days.
Discussion
Although it can be a great tool, it is not necessary. There is a thing called spending less than you earn.
NOT
YOUR
KEYS
NOT
YOUR
CORN
Yeah what the hell? How are you supposed to pay back a loan if you don't have a fiat income?
Probably should be able to service the debt.
If you have high conviction in the future price of bitcoin, then you could use a small portion of your stack to take out a loan on Strike (nostr:npub1cn4t4cd78nm900qc2hhqte5aa8c9njm6qkfzw95tszufwcwtcnsq7g3vle), opting not to pay the principal until maturity. When the loan approaches expiration after 12 months, refinance it for another 12 months. Done responsibly - meaning having enough capital (fiat or btc) to re-collateralize the loan if needed in the event of a bear market - and itās an excellent tool to avoid selling your bitcoin.
I'd also say it's an excellent tool one can use to loose over collateralized Bitcoin.
Using Bitcoin to incur debt seems incredibly retarded to me, but to each their own.
I plan to remain 100% debt free and live continue living simply.
If you sell under $45k of long term cap gains Bitcoin a year ($90k if you are married) there are no taxes at all. I live on less than 14k a year, because I have unshakable conviction in the long term value of Bitcoin.
The price is going to $0, because fiat will soon be worthless.
As you say.. to each their own. Everyoneās circumstances and comfort levels with debt are different.
Yeah on one hand I understand it as a mechanism to get value from
Your corn without initiating a taxable event. But on the other hand Iāve seen interest rates of between 12 - 25% which makes me think itās more or less daylight robbery
It's about the investment banker's view of the world: "Shun honest work whenever you can and make your money work for you" - that's how they came up with a completely non-productive, rent-seeking way of generating pseudo-dividends on bitcoin by taking out a loan with a fixed, lump-sum payment some time in the future, backed by a small percentage of their BTC total, and taking out another such loan shortly before the first one is due, at about the same percentage of their total stock of bitcoin but at a higher price.
That strategy works as long as the price of BTC in whatever fiat currency you're borrowing rises, i.e. as long as there is monetary inflation (growing of the money supply or "printing dollars"), i.e. forever and ever until the end of time.
While that does of course work, it relies on the continued existence of fiat money and the continued enslavement of regular working people to the benefit of politically connected Ć©lites.
I think that we as bitcoiners, libertarians, Rothbardians, or whatever you call yourself, should strive to end such tyranny by building a fully parallel economy where investing your BTC works the same way as investing your gold worked in days long past:
Deflation was the order of the day, every day, so simply sitting on your money (known as "saving") would already yield increased value over time, and without a fractional reserve banking system, the only way to make more money off your money was to lend it out to businesses (or start your own business, of course).
That set of circumstances led to a financial climate where rich people looking to get richer created actual value through an increased supply of goods or the creation of new goods, ultimately benefitting everyone by lowering prices and thereby building deflationary pressure, taking us back to the beginning of this paragraph.
I hope you can see why I'm so enamoured with this concept. Thank you for your attention to this matter.
Yeah... it's the sort of thing that makes me think we must be nearing the end of the bull - which would be the absolute WORST time to borrow against your Bitcoin.
It makes sense to do if it is cheaper than having tax obligations due to sell and if you wouldn't have issues with servicing the loan or possibly have issues with not enough collateral.