Quote from: avikz on December 10, 2020, 02:20:09 PM

Quote from: digifinex.official on December 10, 2020, 10:39:46 AM

Fidelity recently announced that it is allowing btc to be used as collateral for its cash loans.

https://www.coindesk.com/fidelity-digital-to-accept-bitcoin-collateral-on-cash-loans-for-institutions

Completely makes sense! Because bitcoin's value is set to increase in long run because it is based on scarcity model. But if you need some urgent cash well within your borrowing limit, then it's an wise thing to do. But ensure that you get back the unit value of bitcoin once the loan is repaid. Big corporates may play a little trick here!

Once you have repaid your loan, ensure you will get back the same units if bitcoin that you had collateralize whike taking the loan and not its dollar equivalent!

I have no doubt that some in the future may try to play that trick and people are going to get scammed that way, but it is a mistake to let yourself be deceived like that, it is as if you offer your hose as a collateral for a loan and once you repay your loan you only receive 75% of the house because it went up in value during the time you were paying the loan, so if for example you offer one bitcoin as a collateral and the price of bitcoin skyrockets you still should receive one bitcoin once you pay your loan.