Even if you don’t pay back the principal you have the service the interest every month.
Discussion
strike offers a zero monthly payment option… the interest and the principal are paid at the end of the term… so interest is higher but if the bitcoin price goes up in that time… the borrow can roll it over paying the interest and principal of the old loan with the new one… then repeat if they’re lucky or just get rekt and loose their bitcoin if they’re are unlucky.
been using loans for a couple years. never paid the monthly interest. get rate at 5-7%. bitcoin's risen 20%. arbitraging 13-15%. have closed out loans with a fraction of coin. other times, just rolled with smaller amount.
you don't have to use it.
question though: if someone uses their bitcoin to close their loan, is that still considered spending or not?
That’s a great question! Maybe nostr:npub1drlw0wmu9tq37usx4qt3u6u4zj44mrf3zsfa6xhcdyrh3n4wpmgqr4rfg0 would know. Maybe not because you’re settling debt?
Also where do you get rates this low without any monthly payments?!! That is absurdly low. Even Heloc’s are higher.
I guess my question is more about the semantics around bitcoin being used.
What does it mean to "sell" versus "spend?"
If by selling, are we talking about simply selling Bitcoin for fiat and then that's it?
If by spending, we're talking about using Bitcoin as the medium to settle all debts (buying groceries, bills, etc), then wouldn't using Bitcoin to settle a loan—or credit card bill—be considered spending it?
I'm not in favor of the former. I do support the latter.
Loans: I've used Ledn, Strike, Firefish and a bunch of others. They're OK. Not great. What kills me is their interest rate. And the wait... I've switch to Aave (gasp!). But it's "self-custodial" (grain of salt), no kyc, no questions asked, flexible, and straightforward. Plus, a 5% from Aave v a 12% from Ledn... If Bitcoin is "the most pristine collateral ever" then why are interest rates so high? Make it make sense. Competition is healthy. If there was a platform that BEAT a 5% rate, and it was Bitcoin only, then let's go.