I don't call using your bitcoin investment as collateral when you are short of funds in a lending platform because it is wrong and you are gambling with your bitcoin investment and that is not smartness but a dumb thing to do.
I don't understand why any investor will acquire enough Bitcoin to the point of getting broke and use his bitcoin investment for collateral, it means that investor didn't plan his bitcoin investment journey properly and he doesn't have an emergency funds to take care of real emergency when it comes. This is the problem alot of newbies are facing, they forget that bitcoin investment is for long term and one needs to use only part of his discretionary income to invest in bitcoin for a long-term so that he can buy regularly and hodli for a long time time without selling part of his bitcoin when it is not of his own will.
I believe it's a wrong move allocating once Bitcoin as collateral for some loan amount, I consider it a weak thinking and should be avoided. This forum is one platform that is able by some members to give out loans, yet we've never or I personally haven't witnessed a situation where Bitcoin not just any asset is being given as per collateral even the person issuing the loaned amount never asks for Bitcoin as collateral. Now let's imagine given Bitcoin as a collateral which the sent amount will be equivalent to dollar value of the Bitcoin, that means If by any circumstances unable to meet up the loan return then the lender is left by no option than to take the collateral (Bitcoin), if the lender understands the value of Bitcoin and decides to hold, in few or more period he might be getting X2 of what was sent as collateral.
I dont want to say anything bad for those who are trying to borrow money to invest even though I wouldn't do something like this but I quite appreciate the principle of those who are borrowing for bitcoin which they think is very good to do even though this is against my principles and I wouldn't do something like this to collect bitcoin because for me collecting bitcoin as much as I can and as much as I can from my income will be more worth it because I am not too depressed and able to survive compared to borrowing which will make me feel more constrained especially in mental problems that have to divide time in thinking about investment plans and existing collateral payments.
Its enough to invest as much as we can and as strong as we can even though being in bitcoin is a good thing but the main focus right now is not that we should feel this is a race with other people who do a lot of ways even by borrowing and risking everything in bitcoin without thinking about other conditions because this is not a proving ground for who can have the most bitcoin but what we should think is that we must be able to stay consistent and be in confidence in order to achieve what we expect with the bitcoin we are investing now.