Borrow fiat with your Bitcoin and never sell - page 5.

NotATether

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Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

I dont have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

You are going to trust the economic recession with your borrowed cash?

Sorry to rain on your parade, but the inflations and rising interest coming from the recession megastorm in the next few months are going to wipe out your borrowed cash, and the bitcoin you're borrowing it against (because even more lending platforms will collapse - this time by running out of cash because govts will not bail them out).

Don't throw your hard-earned bitcoins into a funnel, wait until the price gets out of its bearish burrow, and then buy the stuff you want by liquidating parts of your BTC.

bitbollo

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it is too risky as a strategy because the price can fluctuate dramatically and make an investment almost like playing in the casino.
if you do not really need cash for an investment you are basically trusting everything to the hope that the price of bitcoin will revalue... otherwise how do you repay your loan?

then ok here Wink

we are all bullish and we think that the price of bitcoins always tends to rise over the long term (maybe years or decades), but imagine a big contraction takes place (similar to what we have seen in recent months) Roll Eyes

...
practically you risk losing all the bitcoin and keeping yourself with a large fiat debt to repay.

kamvreto

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MAaaN...!! CUT THAT STUPID SHIT

to replace the fiat system is currently not possible, Bitcoin still has pros and cons and price fluctuations will affect the level of risk of using bitcoin. Bitcoin and fiat today still go hand in hand, complement each other and do not replace each other. Borrowing money for long-term investments is not a problem as long as there is a return for the loan. Borrow according to what you need, banks value borrowers more than savers because borrowers will provide many advantages for the bank.

jrrsparkles

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Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

It works theoretically but is it really possible in reality? How you are going to pledge your bitcoin to borrow your fiat, if you give your bitcoin to someone as collateral then it becomes their possession not just only the collateral since we all know that bitcoin transactions are irreversible.

Poker Player

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Quote from: Cannabijoy on August 02, 2022, 01:40:02 AM

Sorry, I may have worded that wrong. What I mean is, if I sold 100,000 Bitcoin at $10 a coin in 2011, for a total of $1,000,000, my million dollars would have lost 25% of its purchasing power due to inflation- while the Bitcoin would be worth $2 billion.

Many have had the same idea as you, popularized by the snake oil salesman and have ended up liquidated or with their bitcoin lost or locked in broken exchanges.

At the time I doubt you could borrow against your Bitcoin, but let's assume you could.

Leaving that Bitcoin worth $1M, they would lend you a maximum of 50%, or $0.5M, but it is not convenient to borrow the maximum because at the minimum that the price oscillates a little downwards you would receive a margin call to provide more collateral or you would be liquidated. On that borrowed amount you would have to make periodic payments, which if missed, you would also be liquidated. If the exchange went bankrupt you would be left without your funds.

How much would you have borrowed to have a good margin of safety? $200K? With a downturn like the last few months, you would have received a margin call as well.

That borrow idea is fine if you are a billionaire, have like 10,000 bitcoins, and to finance your lifestyle you only need to borrow against 50 or 500 at most, but not for ordinary people as the snake oil salesman has taken it upon himself to popularize.

Cannabijoy

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Quote from: Poker Player on August 02, 2022, 01:35:42 AM

Quote from: Cannabijoy on August 02, 2022, 01:28:45 AM

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

No, it wouldn't. It doesn't actually.

Because in your argument you are obviating the increased purchasing power of Bitcoin, with which it is worth selling to enjoy the benefits while maintaining or even increasing purchasing power.

Stop listening to the snake oil salesman Saylor.

Quote from: Cannabijoy on August 02, 2022, 01:28:45 AM

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

You are cheating yourself.

Like selling $1M for $10? What the **** are you talking about?

It will always be better to sell small pieces than borrow because in order to delete you will have to deposit at least twice as much, giving up your private keys, and with the volatility of Bitcoin, you will soon receive a margin call.

Sorry, I may have worded that wrong. What I mean is, if I sold 100,000 Bitcoin at $10 a coin in 2011, for a total of $1,000,000, my million dollars would have lost 25% of its purchasing power due to inflation- while the Bitcoin would be worth $2 billion.

Poker Player

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Quote from: Cannabijoy on August 02, 2022, 01:28:45 AM

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

No, it wouldn't. It doesn't actually.

Because in your argument you are obviating the increased purchasing power of Bitcoin, with which it is worth selling to enjoy the benefits while maintaining or even increasing purchasing power.

Stop listening to the snake oil salesman Saylor.

Quote from: Cannabijoy on August 02, 2022, 01:28:45 AM

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

You are cheating yourself.

Like selling $1M for $10? What the **** are you talking about?

It will always be better to sell small pieces than borrow because in order to borrow you will have to deposit at least twice as much, giving up your private keys, and with the volatility of Bitcoin, you will soon receive a margin call.

Quote from: ?? on ??

Why would you have to hand over your Bitcoin? Perhaps you do now, but I am talking about the future when Bitcoin is more established. You don’t have to move out of your house when you use it as collateral. You only have to prove that you possess the asset that you’re using.

Here we are talking about realities, not what you imagine. You have to hand over your Bitcoin in order to borrow.

Cannabijoy

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Quote from: Poker Player on August 01, 2022, 10:10:20 PM

You are late for this. This is so 2021 what you are saying.

The one who popularized this last year was Michael Saylor, to the point of recommending to people that if you have a paid off house, take a mortgage and buy Bitcoin with the money they give you. Soon other Youtubers jumped on the bandwagon, like Max Kaiser.

I’m not saying use your house as collateral to buy more Bitcoin. I’m saying use your Bitcoin as collateral to obtain more property (specifically investments that will earn you more money).

If you acquire a significant amount of Bitcoin it is much safer to sell or spend small parts than to borrow against it, even if you have to pay capital gains tax. Better to pay tax than to lose your Bitcoin.
[/quote]

If you sell your Bitcoin and have to pay taxes, then you’ve lost your Bitcoin to whoever bought it. So long as you live within your means (which is what a Bitcoin based economy teaches us), wouldn’t it make more sense to keep your Bitcoin and borrow the money?

Those who sold $1,000,000 worth of Bitcoin for $10 in 2011 have lost about 25% of that value. If they borrowed smaller amounts as they needed it (with the means of paying off the loan, and the ability to sell some Bitcoin if times got tough), they would have over $2 billion in Bitcoin.

Quote from: aoluain on August 02, 2022, 01:16:38 AM

Yea the trouble is that you will have to hand over Bitcoin to whomever you borrow the FIAT
from, this means you lose control of that Bitcoin and when the value falls you will have to
give them more Bitcoin to cover the value of the FIAT loan, its like a "Margin Call".

Why would you have to hand over your Bitcoin? Perhaps you do now, but I am talking about the future when Bitcoin is more established. You don’t have to move out of your house when you use it as collateral. You only have to prove that you possess the asset that you’re using.

[moderator's note: consecutive posts merged]

laurenB7742

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Vaccinized.. immunity level is full.

The risk is that if you don't pay the interest, your collateral will also disappear, in which case I would do it the way @Bitcoin_Arena mentioned. I will also sell some bitcoins to cover work expenses, and then I will find a way to buy back those sold bitcoins when I can afford it. The market is still there and the opportunity to own bitcoin has never gone away so there is no need to mortgage assets while we can sell them.

so98nn

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The capital gains on bitcoin is huge, my country levies taxation around 30% and not only this if you own a business then you have to pay additional 18% export tax on the bitcoin sold against fiat. This is very very layered structure from Indian government so that we can not freely use the bitcoin.

If this continued I am afraid there is no way Indians can get into bitcoin freely unless and until they fly to tax feee country sell the assets there and wire it with fiat to get only capita gains as personal passive income. Idk, but it sucks.

aoluain

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Quote from: Cannabijoy on August 01, 2022, 07:02:17 PM

Quote from: bittraffic on August 01, 2022, 06:41:26 PM

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

If I sell Bitcoin once it reaches an ATH, and it continues to rise, I will never be able to recoup my Bitcoin. People sold their Bitcoin when it reached an ATH of $10. Suppose they made a million dollars. If they held their Bitcoin and could borrow against it, they would have $1,000,000 to invest in a business, plus $2 billion in Bitcoin.

Yea the trouble is that you will have to hand over Bitcoin to whomever you borrow the FIAT
from, this means you lose control of that Bitcoin and when the value falls you will have to
give them more Bitcoin to cover the value of the FIAT loan, its like a "Margin Call".

Alternatively you could do what I did twice before and its something most others would
frown upon but it worked for me. Just get a FIAT loan without touching your Bitcoin
and buy more Bitcoin with it. Timing is everything and I have done it 6 months before
the halving then 12 months after the halving sell the Bitcoin you bought to do what
you want or just part of it to pay the complete FIAT loan back.

* of course i cannot guarantee this will actually work just based on fast performance alone!

worle1bm

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It's not fiat that you can put as collateral because once the person is having access to your funds they can be gone with a blink of eye and you need to pay the debt also so it's not a win-win situation as you are assuming it to be.You can wait for some time and in future when your btc holding are worth significant amount you can buy stuff with it you like and it will be adopted in most of the region without even risking your coins.

bigjuk

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Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

It's okay to borrow money, all of that is the right of the consumer, the borrower doesn't want to know what the money is being lent for.

Buy crypto loans and investments, if you are able to face monthly interest for borrowers, there is nothing wrong with holding on for the next few years, obviously you have to consider the risks that occur or before they happen.

Poker Player

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Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

....

Does anyone else plan on doing this?

You are late for this. This is so 2021 what you are saying.

The one who popularized this last year was Michael Saylor, to the point of recommending to people that if you have a paid off house, take a mortgage and buy Bitcoin with the money they give you. Soon other Youtubers jumped on the bandwagon, like Max Kaiser.

The problem is that we are in 2022 and many of the entities that allowed you to borrow against you Bitcoin have gone bankrupt, and people who had deposited Bitcoin in them, to borrow against it, for trade or other reasons, have been left without their Bitcoin and we will see if they get it back.

Remember: "not your keys, not your Bitcoin".

If you acquire a significant amount of Bitcoin it is much safer to sell or spend small parts than to borrow against it, even if you have to pay capital gains tax. Better to pay tax than to lose your Bitcoin.

gunhell16

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Quote from: Cannabijoy on August 01, 2022, 05:34:29 PM

I don’t have enough Bitcoin (yet) to borrow for anything significant, but this is my ultimate plan. When I get enough Bitcoin, I would borrow no more than half its worth (in case the price drops), and then I would still have Bitcoin along with whatever property I buy with the borrowed money.

This seems like a smarter move than to sell the Bitcoin for fiat money. If I sell, then I have to pay capital gains tax. When the cash is borrowed, there is no tax. Since I still have the Bitcoin, then I will gain when the price rises. If I only have fiat, the “price” will always go down because of inflation.

I hope Bitcoin will eventually replace the fiat system, but until then, the market for cash favors borrowers over savers. This seems like a win-win situation.

Does anyone else plan on doing this?

So according to what you said when you have Bitcoin you will borrow money for no more than half of the Bitcoin you have? Are you referring to a Bitcoin? You didn't say anything about the amount of bitcoin, you just said that when you have Bitcoin, do we know if you are only targeting half or 1 bitcoin. It's a bit like what you're saying is just confusing or just a little messy. But in my understanding, maybe it's better not to borrow money if you have 1 Bitcoin. It's like you injured yourself if your body is fine.

Also, there are many ways in this forum to earn bitcoin or even altcoins as long as you just research and ask questions here, there are even other members on this platform who lend here like @darkstar, Shasan and others as long as they will see that you have a source of funds to pay what you borrow.

Fundamentals Of

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There is of course both advantages and disadvantages to this. But the problem with borrowing fiat using your Bitcoin as collateral is probably that you will send your Bitcoin to the lending platform or company. And the amount of Bitcoin you are sending is definitely bigger than the fiat that you received.

Now, the lending platform is hardly to be trusted. Not only is this company centralized and in control of your funds, meaning its owners could suddenly exit and vanish into thin air, this company could also go bankrupt anytime. When that moment comes, your Bitcoin will be stuck.

Cannabijoy

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Quote from: sheenshane on August 01, 2022, 06:59:27 PM

Quote from: Cannabijoy on August 01, 2022, 06:27:53 PM

Have any of you heard of “Buy, Borrow, Die”? It’s what billionaires do, and it’s why they never pay taxes. If more Bitcoiners followed this strategy, the price of Bitcoin would also rise because we would have more holders.

I get you and this is how I love how Robert Kiyosaki inspired people about debt and taxes and it might it's good if you watch this short clip of him.
https://www.youtube.com/shorts/vZv-7NqI3NM

This man I most admire, it's sure you've learned a lot with him and I think this idea is also good to apply if you want to invest in Bitcoin and aim for a target range time so that you can get paid the interest.

Your idea seems good, but make sure you can handle it very well. There should be a game plan.

I have seen videos with Robert Kiyosaki before, and he makes a lot of sense. You don’t want to borrow money against your Bitcoin for something like a car. You want to borrow the money to invest into rental properties or some other business that will make you money. You could sell the Bitcoin and live your entrepreneurial dreams; or you can borrow the money, live your entrepreneurial dreams, and keep your ever rising Bitcoin.

ChiBitCTy

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There is always a level of risk involved in things like this, and if you’re borrowing fiat monies while putting up bitcoin as collateral, then you’re going to have to pay interest on those dollars borrowed. Are you aware of that being the case? I’m not sure this makes sense, would need a little more background info on everything.

Cannabijoy

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Quote from: bittraffic on August 01, 2022, 06:41:26 PM

It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?

I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.

If I sell Bitcoin once it reaches an ATH, and it continues to rise, I will never be able to recoup my Bitcoin. People sold their Bitcoin when it reached an ATH of $10. Suppose they made a million dollars. If they held their Bitcoin and could borrow against it, they would have $1,000,000 to invest in a business, plus $2 billion in Bitcoin.

Uang_kartal

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betfury

if you are looking for posts about bitcoin lending in the future, you can check this https://bitcointalksearch.org/topic/omegastarscreams-lending-service-no-interest-no-collateral-5137889

pending the requirements that the Op wants and the minimum requirements for submission.
if there is no urgent reason such as paying fees or any fees, you should not borrow if the goal is for long-term investment. I believe in your enthusiasm and prejudice in the bear market (analysis can change at any time). money itself which is not an emergency. Borrowing money, either fiat or crypto, can burden you and make you uncomfortable with the timeframe and interest requested.

Topic: Borrow fiat with your Bitcoin and never sell - page 5. (Read 1173 times)