Some of my confusion is the valuation. I mean will the value be based on the value of the coin as at when the deal was made or will it be fluid and can go with the present price of bitcoin when the loan will be repaid.
I have often heard of crypto-backed loans but have never tried them out. The questions on my mind right now are:
What if the lender isn't reputable? They could collaborate with the escrow to dupe their victims. Although this can actually happen to a borrower who is just too careless to confirm details first. Yeah, I have heard of several cases where people receive fake credit alerts on their devices, but the same amount doesn’t reflect in their bank balance.
Another question on my mind is: wouldn’t I be tying down my crypto investment just to acquire a loan whose value may not match what I would have gotten if the price of my crypto investment (especially Bitcoin) suddenly rises? This seems more like a very risky move to me. Anyway, it is only suitable for short-term loans. For long-term loan purposes, it is strongly not advisable.
As for me, if I need a mortgage loan, I won’t put my bitcoins at risk,there are other options available.