Topic: Very short term, fully btc collateralize usd loan (13k) (Read 1765 times)

A local friend.  As this is now a pointless thread, I am locking it.

I HIGHLY suggest you do not tell this person as they will harass the lender

Jakedeez is one of the few Jakes here who isn't a scammer.

from who?

As I said, I already got the loan.

so then ask for 9k and 30k collateral and maybe someone would want to do it

13000$ and 30 btc escrow? are you stupid or are you a scammer?
30 btc is not worth 13000$

Actually the real reason I wanted the fiat loan against BTC is that a friend lent me the btc.  I have plenty of btc in cold storage in Virgina in the safe in my parents home, but only 4 in my hotwallet.  I had a need for a short term cash loan.  A friend lent me btc, but on the terms that I return him the same number of btc.  Therefore, I didn't want to sell the coins in case they rocketed higher.  I got my loan though.  I am all set.

Actually, if you take it one step further and suppose that a lender was bearish about the bitcoin price over the term of the loan, he could lend from his bitcoin holding and take a profit (or hedge a larger loss) as well as be paid a fee, defined here as interest.

And a couple of steps further than that, an enterprising escrow could automate what would effectively be a P2P betting site, continually mediating a market, holding or liquidating the security and taking a nice profit.

   

Similar points have been raised on another USD loan secured by Bitcoin recently.
https://bitcointalksearch.org/topic/would-someone-give-a-loan-874378

The difference between that loan and this one is that he is offering to maintain the collateral bitcoin at 120% of the value of the principal.

I made, as did others, some points about the vulnerability to change in the $BTC rate, but as the OP in the other thread finally got around to was that there doesn't have to be.

OP has real life short term need for $X but doesn't want to sell his xBTC because he's neutral/bullish on the price. Fair enough.
The lender has $X doing nothing in the bank, sees a chance of making some interest and says ok.
 xBTC go to escrow, $X go to borrower.
Loan period ends, $X plus interest go back to lender, xBTC back to borrower.
End of story.
At 120% maintained value of collateral, he wanted to pay 1% a month and was offered 3% on $1000.

As I said on the other thread, it also can be a way for the borrower to speculate on the value of Bitcoin increasing over the period of the loan. He either buys Bitcoin with the dollars or leaves it as Bitcoin if that is the method of transfer.
Even if that is his motivation, it doesn't put the lender at risk if he has loaned spare dollars and not affected his bitcoin holding, and if the OP tops up the security in bitcoin automatically.
But as it's a speculative buy, there should also be a stop loss. If the deal's done at 360, then there's an automatic sell order organised by the escrow at 300 + slippage of at least 10% i.e. 330 and you bail out immediately the borrower stops maintaining his margin. Just like Wall St.
That's not necessarily bad for the OP, if it goes down when he thinks it should go up, then he's probably best out of it with his shirt. And the lender still gets their dollars back.

I don't use Bitfinex, how much would they charge you for 75% extra leverage, 7 against 4 bitcoin, to go long on Bitcoin for a month?

This is true. If you are making a fiat based loan then you would probably need to give escrow at least 120% (but some may want 150%) of the loan value as collateral in the event that the price of bitcoin falls during the loan.

I am not sure why people try to get a fiat based loan secured by bitcoin. I would think it would make more sense to me for the borrower to simply sell the bitcoin on an exchange as this is what they are doing anyway plus it would save them in interest costs.

You could then walk away with a 10-15% gain on your money on current BTC prices - no one would do this. If you increased your collateral to say 35 - 40 BTC people would be more interested.

Pretty sure someone would do little more than that.

This.

the collateral is supposed to be worth more than the loan amount.
Current price of $367 x 30 = $11,010.

I dont think that you should doubt the escrow, escrow.ms and tomatocage are good enough to handle these amounts, they have held more than this before.

I don't think that many people would be willing to lend that much at once. That is a lot of money to trust an escrow with.

Thats  really nice deal! How do you want funds? Paypal?

How much interest would someone want for a $13,000 loan against 30 btc for two weeks with escrow?