EDIT: Ledn is Canadian company that does the same thing https://ledn.io/en It's a 50% LTV at BlockFi, but you can put more BTC than required and there are levels that will lower the interest rate on the loan I paid off the loan already but there was a status, from memory if the value of BTC went down 75% then either deposit more BTC's or BTC gets liquidated with a 1% fee and the rest of the BTC goes back to the account Bitcoin is a 24/7 asset so can deposit or withdraw more BTC's anytime On spending BTC, yes, the merchant receives $ but does it really matter to the person spending the BTC? And there's precision on the spending amount of BTC, i.e. 0.3121495 BTC, versus 5 whole amount of AMZN shares spending Imagine if your wife wanted a Gucci bag in the middle of the night, you can use BTC or wait until the next trading market day, to sell your Amazon share and then withdraw to the bank after a couple of business days Yea, you can use CC but so can others who don't own AMZN shares or BTC, that's not relevant to the discussion
That's one of the big risks. There is so much leverage in crypto, that a catastrophic flash-crash such as occurred in 2010 is quite possible. At this time, there is no regulation that puts in circuit-breaker protection for BTC/ETH. I wouldn't risk it.
BlockFi, Ledn, Celsius and Nexo loans are at most 50% leverage, but there were liquidations, but hardly devastating to the borrowers The leveraged traders on FTX perp futures and Binance leveraged longs are the ones causing the flash crashes since they can get 10x or 20x leverage There's a reason lenders are accepting BTC as collateral for loans or even mortgages to buy a house, BTC (and other blue chip cryptos) are extremely liquid 24/7 so very small risk to lenders that they don't get their money Even Fidelity and Goldman Sachs are accepting BTC's for loans We don't need circuit-breakers in cryptos. That's TradFi bullsh*t. Cryptos markets are good trading markets, let's not copy the TradFi dishonest markets Last year, Cryptos lost over 40% value (over a Trillion $ of value) in a short time, twice, and no major crypto companies went bankrupt or blew up Imagine if that happened in TradFi where the stock market lost 40% of its value in a few weeks, you'd have something like Lehman Brothers going belly up all over the place
lenders will take ANYTHING as collateral if they think they can sell it before they get hammered. its not a blessing, its just math. If btc implodes at 3am on a saturday one day, and the next tick is $5k, they will get destroyed.
Jack, can you tell us the details, LTV, loan application process, etc of a $100K loan you took that used a different collateral? Just so everyone knows you're not full of shit as we suspect that you are I'll tell you about the BlockFi $100K loan details to compare
AH!! I now see what you are saying. Shares traded on the stock exchange are not a currency. I can't buy anything with a stock certificate but I can with a bitcoin wallet. I can't argue with that.