It could be a tragic end when there is a bear market and more than half of BTC value drops. If the lender is not reassuring I guess this will work. Isn't something like this already in a Defi platform?
I wouldn't be getting into a loan if I have BTC. What I can suggest is to keep your coins and when ATH, you sell. That's what you should do and then wait for the bear market to come as it always does. You can do whatever you plan with that fiat.
This is what big companies are doing and why they recently got in trouble when the price crashed.
They took loans with their bitcoin as collateral, but when the price halved the lenders demanded more collateral, which the companies couldn't provide because their investors and sales dwindled.
As for you, the average user, taking a loan with bitcoin collateral is not a bad idea, as long as you don't use all of it. Say, I'd take one now for the equivalent of 2 BTC, while holding 10 BTC. The price could go lower, but even if it went below 10k USD, which will I'm willing to bet will not happen, I'd still be completely safe.