I used to hate the idea of borrowing against your Bitcoin But I was presented with new information and completely changed my mind I used to think that you should just sell bitcoin to buy the things that you need if you don't have enough income But now I understand that most people won't care about Bitcoin until it's $1M+ Up until Bitcoin reaches $1M, most of it will be bought by institutions The institutional investors who understand Bitcoin will never sell For example, Strategy is building products that allow it to essentially print fiat so it can get as much Bitcoin as possible Why should I sell my Bitcoin to Strategy? Why should I pay the taxes associated with selling my Bitcoin? Why should I pay the exchange fees to sell my Bitcoin? If someone wants to be paid in Bitcoin, I will gladly give it to them over fiat But if I have to sell my Bitcoin to buy the things that I need, then I would rather just borrow fiat against a very small portion of my stack and pay that loan back with devalued dollars Of course, there are still risks associated with borrowing against your Bitcoin It's still a relatively new asset class, so it's very volatile You could be liquidated and lose your entire stack if you borrow against everything you have I think it would be smart to limit the percentage that you borrow against The limit would be up to you Think about how much Bitcoin's price could fall before you make your decision Eg. Borrowing against 5% of your stack with a loan-to-value of 50% means you can only get liquidated if Bitcoin's price seize a ~96.875%+ drawdown Borrowing against 50% of your stack with an LTV of 50% means you would get liquidated with a 68.75% drawdown This is with a liquidation LTV of 80% The lower your LTV, the safer your loan Most people won't understand the significance of Bitcoin until fiat is dead At that point, they won't be buying it They will be working for it

This post was not created by AI It was created by RI™️ (Rajat Intelligence)