Quote from: stompix on May 14, 2021, 04:25:04 PM

Second, there is the risk factor, bitcoin dropped to 4k last April, if you would have taken a loan at 10k your collateral would have been sold to pay up your debt.
Look at your scenario from a different point of view, you take 50k, you deposit 2 BTC, the price drops by 50% overnight, your collateral is liquidated and after 1 month the price of BTC goes back to 50k.

And surprise, look what happened now in the markets...
Let's assume you took that loan one month ago in April at 60k and you were sure the bull run will never end, a flash crash today bought the price under 30k on bitfinex, even with a 2x collateral you would get liquidated in a loan on USD.
The price spiked back to 40k but for the loan owner it wouldn't have mattered anymore, he basically deposited 120k worth of USD and ended up with 60k.
And the companies are asking you to increase your collateral, what are you going to do, cut losses or put more and more on the table like in a poker match?

Yeah for banks it might be pretty neat, they always have the value in $ at their disposal and they will not care anymore if you're out of work or your home value is going down or you die, but for the one taking the loan, this is one huge gamble I would never risk-taking. I rather have my bitcoins in my pocket and pay a USD loan at a few percentages higher interest rates and keep those coins safe in my wallet, sell only as much as I need to cover one monthly payment to all with one swipe.

Quote from: Poker Player on May 14, 2021, 04:56:18 PM

Quote from: stompix on May 14, 2021, 04:25:04 PM

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To give a practical example, what a Rockefeller who has Bitcoin and wants cash would do, assuming he has 1,000 Bitcoin, is to ask for $250k in cash and give 10 Bitcoin as collateral. When the market goes up, he keeps refinancing the 10 Bitcoin and getting more cash. If the market goes down, he can give 10 or 20 more Bitcoin as collateral and not even bat an eyelid.

And exactly this is happening now, some companies are telling people to over collateralize their loans next time..
By how much? 1000%? If people would have that much in their pockets they wouldn't be looking for such a tiny loan anymore, they would simply sell 10% of their stake and be done with it. You have 3millions in BTC and you take a loan for a house worth 300k while depositing 50 BTC on a platform? Hell no!