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Borrowing Against Assets Including Crypto

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@brianphobos
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I think a lot of us have already mentally added this into our strategy for this cycle but it is likely going to make a lot more sense to borrow against our digital assets rather than sell out of them completely.

The major risk if you borrowed against your crypto is that it can lose 80%-99% of its value in the bear market. That is why part of my strategy involves being in stablecoins.

I have played around with Venus on the Binance Smart Chain and if you set your Loan To Value ratio low enough you are still making a net gain all while borrowing against the assets.

One of the reasons I think this bear market will be far worse than we saw last time is because there is so much leveraging going on compared to last time.

We will literally have people doing credit card convenience checks to get money into the system and then they will get on some platform that allows them to do 10X or 100X leverage.

We also have these platforms that allow us to borrow against our assets whether that is stuff like BlockFi, Nexo, Crypto.com or a decentralized method like Compound or Venus. A person could leverage out and then be making gains off of that borrowed asset.

So how does the tide go out this time? In general crypto will go up like a rocket and come down like a guillotine. When big companies start to sell their Bitcoin the market will turn the other way and the liquidations will create a domino effect. Add panic selling and some FUD to the mix and it could get pretty devistating.

I would say any loan threshold needs to be pretty low through this next bear market or your entire like could get liquidated if you don't play it right.