Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me
Scenario:
You have 100 LTC and no other funds available
You know for sure that LTC price will go up within 1 week.
What do you do?
Wait for it to go up? You cant know it for sure so it would be really risky to get a loan. Lets say 100 ltc = 1 btc
So you will get a loan of 1 btc using your 100 ltc as collateral, you will need to pay at least like a 5% of interests so thats 1.05 btc back, the ltc price would have to go up by a lot to compensate all the trouble and the fees so not a really good idea
All true, but this is not a question of whether it's a smart move or not and what's the probability of the price going up.
Providing you know/believe/willing to gamble on price going up (higher than loan interest and related costs), then it makes perfect sense to take such loan. If all works as planned, you'll gain much more than just by holding and selling those 100 LTC alone.