Bitcoin Loans (The Ultimate Guide)

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In this video, I discuss various ways to take out a Bitcoin loan. You can post your Bitcoin as collateral and borrow US dollars against it, in exchange for paying monthly interest payments.

Reasons to take out a Bitcoin loan include:
1) You want to make use of your Bitcoin profits
2) You want to maintain your exposure to Bitcoin's upside
3) You want to avoid incurring capital gains taxes

Collateralized loans against assets are quite different from regular consumer debt (credit cards, student loans). Many wealthy people borrow against their assets, so that they won't have to sell those assets.

If you borrow against your Bitcoin to buy an investment property (real estate), the interest expense may be tax-deductible, and you will have essentially converted your Bitcoin into an asset that produces monthly cash flow (that can be further shielded using depreciation).

The downside to Bitcoin loans is that you might get a margin call (you need to post more collateral or risk liquidation) if Bitcoin falls a lot.

As time passes, I expect the price of Bitcoin to explode to the upside, at the same time that interest rates on Bitcoin loans fall below mortgage rates. Bitcoin is a better form of collateral than real estate, and so should trade at lower borrowing rates.

To pay your Bitcoin loan interest, you can:
1) Use external income from a job, business, rental income
2) Borrow a little extra Bitcoin to make the interest payments
3) Sell a tiny bit of Bitcoin to make the interest payments.

A very risky strategy would be to borrow against your current Bitcoin holdings in order to buy even more Bitcoin. This strategy can backfire if Bitcoin falls a lot and you get a margin call.

A Bitcoin loan never needs to be paid off. You can roll your debt, or refi your existing loan. If the value of your Bitcoin collateral rises, you may be able to borrow even more money against it.

Not investment advice or tax advice! Consult a financial advisor.

Bitcoin citadels:
https://bitcoinmagazine.com/culture/t...

Bitcoin loan services:
https://blockfi.com/crypto-loans

https://lend.hodlhodl.com/offers/borrow

https://unchained-capital.com/loans/

Beware of rehypothecation:
https://unchained-capital.com/blog/ul...

Podcast re Lend at Hodl Hodl:
https://podcasts.apple.com/us/podcast...

Elon Musk borrows against his stock:
https://www.wsj.com/articles/elon-mus...

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I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos.

My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#Lending
#Loans

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