Borrowing FIAT to buy Bitcoin can be extremely rewarding but it comes down to timing
and to whether you can pay the loan in the short to medium term.
I have done this twice last year, my idea was to "pre buy Bitcoin at a cheap price"
The timing was right because we were about to have the halving and were entering a bull cycle.
In february 2020 I was able to get the first loan and buy Bitcoin at around $10,000, I have
realised a 6x return on this and the loan is now paid.
You got lucky because bitcoin increases its price. But the OP is asking if he will borrow btc at a certain interest and invest it into a DeFI project with supposedly higher APR. I think, this one is very dangerous to take. Because you have no idea if that defi project will deliver their target APR. What if that particular DeFi is weak and haven't gotten the interest of crypto users? That APR will go down and you can't recover your losses.
This do certainly talks with some luck when you do make some loans for you to invest in bitcoin and able to repay those interest on specific time because not all would really
be having the same result or situation because the market is way too unpredictable.There's no way you can precisely tell thats why its risky to take some loans for you to
make out investment but if you can repay it without the need of those profits then go ahead .
Its a matter of risk and if it turns out to go along with your side then for sure you would really be happy in that case.Getting in as early of $10k is something remarkable.
I was among the unlucky ones, because I borrowed money from the bank to buy Bitcoin and altcoins in 2018. But until 2019 the crypto price had
not fully recovered and I was already having trouble paying my debt repayments. Finally, I had to sell my car to pay off the debt, since then I didn't
want to invest in crypto using borrowed money again. As you said, not everyone is lucky to be able to pay debt repayments, and also the crypto
market is difficult to predict. So it is very risky to invest using borrowed money, don't let my experience all of you experience it too.
Timing is everything. In the case of Bitcoin you moved too early in a bear market.
The same will apply again if we go into a bear market in 2022, there would be a
similar opportunity in 2024, possibly.
In the case of investing in some DeFi project, I would be very sceptical and with
borrowings, very apprehensive. There are way more variables to consider.
What DeFi project?
How do you know that one is going to rise to the top ahead of all the others?
What if the project team decide to disappear with the funds?
With Bitcoin the project is proven, with any new DeFi project you are relying on
an element of luck and hoping the DeFi idea doesnt fall out of favour for some
other shiny new idea or project, like the Altcoin scene