Topic: Rich on paper only while hodling? Are lending coins the way out? (Read 145 times)

there are multiple ways
1. selling a small amount.
bitcoin is always good investment in long term. when we say "hodl" we don't mean for a week or a month, it is much longer than that. and you should always invest money that you don't need so you don't HAVE TO sell.
imagine if you had bought 1 bitcoin when price was $3000. in order to get your entire investment out with its equal profit (meaning $6000) all you have to do today is to sell 0.1160BTC and hold on to the rest 0.8840BTC.
obviously the more you invest the more you gain and the longer you hold you also gain more.

2. the traders approach
there are lots of times when price reaches a high and needs a correction. most of them are also easy to predict and detect too. the size of the corrections are also the same most of the times.
selling on those highs (again like first point selling a small amount) then waiting some days for the drop to slow down then buying back the same amount of bitcoin you sold will leave you with a good profit.

3. spending bitcoin
you don't always have to sell to take the profit you can always buy stuff with your bitcoin, again like first point. you want to buy something that is worth $6000 you can pay with 0.1160 bitcoin.

i don't know what AAVE is but it sounds like a shitcoin.
and lending your bitcoin is not a good idea and it has a lot of problems that most people don't want to deal with such as defaults or scammers including the platform you use for lending.

Thank you for your input and forgive me if I say that we have discussed ad nauseum that there are risks involved not only with LENDING, but with generally being active in the crypto space.
That's why let me repeat my initial request for a last time:
Does anybody know more about the procedures of getting a loan through using one of the lending coins like AAVE or MAKER?

Yes, you are speaking right from my heart. The risks are certainly there, but please let us put the risks aside for a moment.
The moment you started to invest in crypto was a risky endeavor.
So this is something everybody has to decide for himself.
So please help me to  find out  the proper way to use these lending coins, when I, as a trader, have decided to be willing to take those risks.
Is there anybody knowledgeable  to let us know what steps need to be undertaken to secure such a loan?
And what costs are involved, are there longterm loans also, what is the collateral /loan ratio etc?
These are the questions I hope to get answers for in this thread.

Yes, lending on a Defi platform can be one of the best ways to grow one's asset while still holding on. I think this is similar of an idea to commercial time deposit offered by banks, and this time with decentralized finance platform. And this can be the biggest reason why DeFi platforms made some killing in the market. I understand that we are in a dilemma right now. On one hand we have the desire to at least taste some of the fruits of what we are working for yet we could not decide to sell today because we are thinking that for sure the price can keep on growing and growing in the following days and weeks...

It's an ideal situation if you have the market going with you and not against you. Just like what Jawhead999 said, what if you don't get to pay it and you weren't able to pay it and lose all your capital? Are you ready for the mental struggle?

Anyways, if you think you can lend your BTC at this current price and then pay it back plus the interest and get the exact BTC you gave and the price rose with BTC, it's a win-win. If it decreased in price with BTC, you would pay more just to get it back which would not be a win.

Either way, you should be analyzing your risk management. If you can afford it, then go for it. If not, better stay ahead of the trend and make money other ways.

Of course I can pay back my loan. I don't have to be invested in Aave. If I use my btc holdings I can pay back my loan to AAVE whatever the price of AAVE is.
I just transfer some of my btc assets to AAVE to pay back my loan. AAVE could have dropped to 1$ in the meantime.
The only thing we need to find out is if the collateral is secured. That means, can AAVE take your collateral with them if they go belly up, or is your colletetal always safe, no matter what AAVE does.
That's why I would rather discuss the technicalities about getting and how to get such a loan.

Right (in this situation)
AAVE goes from $100 to $450 only in 2 months.

What if AAVE goes dump below $50? And you can't pay back the loan with interest since you don't have any money. What you'll do in this situation? Depressed? Mental attack?

You will read a lot of comments about some people holding permanently and never selling, or hodling. This of course is an illussion because they want you to never take profits so price will keep rising. There are some that think an investment means they shouldn't ever sell, however this comes to the targets each one of us are setting.
Some of us don't like losses so we could be fine with doubling our money and being patient waiting for corrections. Many are holding but others because of experiences with bear markets, are only making a few trades between the years and taking profits occassionally. There is nobody that never sold and made money, everyone that owns Bitcoin, the whales, the miners and traders, all have sold at times. Nobody is just rich on paper, the market has liquidity to absorb the Bitcoin of many whales.

The purpose of investing is to postpone current benefits for future gains. If you want to enjoy profits go ahead and spend your BTC. You can't have both capital appreciation and nice stuff at the same time. Now there are centralized finance (CeFi) platforms that enable you to get a loan in stablecoins or fiat currencies while keeping your crypto as a collateral in their custody. However there is a risk in doing this. These platforms are not insured by financial authorities so if they default you probably won't get your holdings back.

Personally I'm expecting big, reputable banks to get into this business as well so once we have this option it will be much safer to "leverage" our crypto assets.

Well it doesn't seem to be such a bad idea, look how many people are using AAVE, during the last few months the price of AAVE has risen insane.

First,

Lending is high risk loss all of your money because you're trusting your money to third parties, which is they has a control of your coins. So it's not recommended for those who not want to take the risk, if you think the APY is worth and you can take the risk, go for it.

Who guarantees Bitcoin will rise to the moon after a year(s) when you start to borrow? Also you'll need to pay the interest rate and some fees, you need to calculate the fees in the future to pay it and speculate the Bitcoin price to recover both of the interest and fees. I would think get a loan to buy Bitcoin is a bad idea.

Even if you loan your coins out you still need to sell if you want to enjoy the profits, and it might be lower or higher depending on when you sell the coins you get from the loan. In the end, it comes back to risk/reward management.

You will lose some potential profits for sure, but you also risk not enjoying the profits if you don't sell now especially if the price goes lower than your entry point. I won't make it complicated tbh, just sell some, and then move it to another investment. Save some profits to buy back when it goes lower. Repeat again for as long as you believe crypto still have some potential.

You need to sell your bitcoin to make money. Without doing that, you only hold without enjoying the fiat money. But if in your country, you can use bitcoin as the payment system, you don't have to sell your bitcoin instead to use bitcoin directly in the local store.

Perhaps, they have a high target price, so they still hold their bitcoin. They will not sell the bitcoin if the price is not reached the target price. That happens to people who have a big amount of bitcoin, and they don't care about the fluctuation of the bitcoin price because they have the target price. But we don't know what their reason is to do that.

I don't know much about AAVE and about making a profit from AAVE because I don't try to lending AAVE. Perhaps, you can try to lend your bitcoin in the exchanges, which can really grow your bitcoin amount.

I learn about lending bitcoin before, and I tried to lend my bitcoin to traders at the exchanges. Although the percentage rate changed every day, I can accept that. After all, that still additional profit for me, so I don't mind receiving a small amount of profit. It will works for you in the long term.

I don't know for sure about that because I do not borrow bitcoin
You can use Binance to borrow bitcoin in https://www.binance.com/en/loan, but I don't want to suggest you borrow the money.
But if you want to borrow fiat money, make sure you can repay the money every month.

If you want to learn about lending, I suggest you register on Poloniex as I tried to lend on that exchange, but you need to verify your account.
Here is the image of lending in Poloniex:

Another poster here had the same concerns, with his thread that how can you say you made profits, if you never sell?
And that is exactly the point. How can you enjoy some of your profits you made during this bull run, while keep on hodling? Because selling now would deprive you of possible future profits.
So I would like to know if lending coins like AAVE would be a way to enjoy some of your profits today (life is short, you know) while keeping your portfolio intact?
They say that lending coins let you use your assets as collateral, but are these coins geared for longterm loans?
Say you would like to borrow 20% of your BTC value today and pay back in a year or two when BTC has risen to the moon?
Who knows more of these lending coins and could explain more in depth how these coins work?