is it a good idea to borrow against your crypto assets? Is there anyone practising this right now?
I did not get your question too clearly. What did you imply by "borrow against your crypto assets?"
Assume what you want to do are as follows
- Use your Bitcoin as a collateral to make a loan for your margin trading
- Then you use what you borrow to short Bitcoin
- What do you feel if Bitcoin soars and your Funding account has a good increase in value but your Margin account is in loss (Red) and even faces with forced liquidation because you opened a Short position ?
What are the risks involved in doing this? Is Defi borrow and lending the best way to go because I know some are centralised.
Lot of risks
- You put your initial capital as a collateral on a centralized platform
- Risk of unable to withdraw your initial capital if the platform goes to bankruptcy.
- Risk of forced liquidation as explaining above