RE: The Ideal Use Case For Bitcoin?
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It sounds like a nice idea but I am a bit skeptical about really wanting to use BC as collateral. As an asset, it's great but sometimes I wonder if just HODLing the BTC due to the tokenomics is better.
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It is the other way around. When you need money, the reasonable thing is to sell your BTC (and buy back with future money intended to repay the loan). It is not reasonable to sell your house (it is neither liquid nor divisable) so it makes sense to take a loan against it. But BTC???
I know your precious Bitcoin is going to 4x in the meantime so you have to keep it but come on, you are not taking the loan to finance your needs - you are financing your market speculation. Essentially, you are opening the Hungary-type of scenario where all the smart people living on HUF avoided the sky-high interest rates (the currency was weak) by taking EUR denominated loans (guess what, they defaulted when HUF tanked because - remember - it was weak). At least you are betting on the favorite.
Or maybe you are the new bank that is going to lend the money out because the fractional banking is huge fun as well. Why not? I guess I will give it a go. Historically, I have never defaulted on a loan which means I never will (now I am standing at the printer, too).
My point of view is more or less on the worst case and I prefer not to use leverage at all due to the dangers. Even when I do use leverage, I make sure that I am covered and have a plan in place.
We all know BTC should go up in price but there is no guarantee of it forever. After all BTC could just dip and not move from that price for a year. Then you have to pay off the interest and you might just sell out if you are relying that as your source of income.
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I should have used "one" instead of "you" as I was challenging your doubts rather than your primary position (the one I agree with).
Hopefully, someone who agrees with the post can point out something I missed when I evaluated the supporting arguments as incomplete.