The Ups and Downs of Crypto Loans (Speaking Of Bitcoin Episode 496)
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- Опубликовано: 16 фев 2022
- On this episode of "Speaking of Bitcoin", join hosts Adam B. Levine, Andreas M. Antonopoulos, Stephanie Murphy and Jonathan Mohan for a discussion about loans in the world of crypto.
HODL. It's crypto-land philosophy for not selling your preferred token even when things look their most bleak. But where philosophy intersects with real-world concerns like shelter, food and the niceties of life, tactics have emerged offering both opportunities and risks. From smart contracts to bitcoin collateralized mortgages, the hosts discuss their experiences with loans in the world of crypto.
Credits
Today’s show featured Andreas M. Antonopoulos, Jonathan Mohan, Stephanie Murphy and Adam B. Levine, with editing by Adam B. Levine and music by Gurtybeats.com. Our episode art is a picture provided by The New York Public Library, modified by "Speaking of Bitcoin."
Any questions or comments? Send us an email at adam@speakingofbitcoin.show 
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Good timing for this. Lots of loans getting hated on.
TY…excellent info…Andreas, Stephanie, Adam, Jonathon…you’re the Best!
Thanks for the education guys!!!
Defi lets you borrow without 3rd party approval
there is company in Canada called Ledn offering Bitcoin mortgages. I'm not sure how it works. great content
What if you put up 2 BTC for down pymt collateral and the price of BTC doubles? Is the lender going to return 1 BTC? No.
The only way I would be comfortable is if a LN private channel could be created where equity shifted between lender and borrower as the price of fluctuated- if BTC price decreases, then equity shifts to the lender and if BTC price increases, then equity flows to the borrower. As monthly mortgage payments were made, the capacity of the channel would be reduced and the reduced capacity would flow to the lender's BTC address where the lender would be free to liquidate, hodl, or lend out. The LN channel could not be closed unless a) the mortgage were paid off, b) the home was sold and the mortgage paid off, c) no mortgage payments were made for x amount of time, d) no property taxes were paid for x amount of time, or e) you got caught making bathtub crank next to your stash of TNT.
* Otherwise, the IRS allows up to $40K per year in long-term capital gains before they are taxed. If you bought 2 BTC at @ $20K and sold them @ $40K, you don't owe any tax.
*Not financial advice
This video holds up well 18:48
Best platform for this?
what about hodlhodl?
If you take a loan against your bitcoins, that means you are planning to sell some of them somehow (either by having less money each month to DCA buy bitcoins because of the down payment either by selling some bitcoins to pay back directly)
I think the good use-case of such a loan is to take it to pay the house and then BCA (Bitcoin Cost Average) to buy fiat: you sell the same amount of bitcoin regurlarly no matter the fiat you obtain against it and you use the fiat to pay back the loan regurlarly. That way you are selling the coins at a higher price than just selling everything one shot, the volatility is your friend exactly like when you DCA to buy bitcoins.
Outside of this, a crypto loans is too risky too me, crypto is not a good collateral.
When they are squeezed I am buying. So its fine by me.
Some lending platforms will let you go up to 50-60% loan to value, but try to Keep loan to value below 30%. Try to repay back loan as price goes up. Should be safe from liquidation this way. Liquidation doesn’t sound like a big deal and some platforms will tell you small repayments will be made after loan to value reaches a certain level but the small payment decreases the value of your portfolio triggering further repayment snowballing effect… so you really can get rekt
Good comment
DeFi infinite banking and I am the bank!!!
sometimes you have to sell a little too hodl a lot
Hey Andreas, if a bank or mortgage company extends a loan with crypto as collateral, then this will increase the money supply of fiat, no? the bank or mortgage company creates new money every time they extend a loan, so does this kinda defeat the point of crypto? i think we have to stop thinking crypto as some kind of asset to be collateralised. its purpose is to REPLACE fiat, instead here it's being used to get MORE fiat
There’s DeFi insurance for loans.
Did insurance pay?
until now no one can answer how crypto-currency will address the issue of central banking usury
Lending is a big part of economics, I think about BTC as a replacement for global bonds and I think the int rate ultimately approaches zero in a perfect world, the risk is everything, the int rates paid out by a lending platform or protocol should be less than the amount of int that people pay to use that liquidity i.g. if Alice puts 10btc up for collateral to borrow 1 btc for 1yr and pays 2%int, then that int can go to pay whoever put up the other 1btc as liquidity for that year, the other side of the spectrum is the credit based system where we see corporations with capital and perfect credit go bankrupt all the time from uncollateralized loans with int rates that have no basis on any reality, non-collateralized loans should be very very expensive. Bitcoin does fix this, just not sure how loans can be done with no trust yet, rekt
Many crypto backed loans have a 0% intereat
Wut
thats great but while its locked you are losing in intrest that could be making you and are at risk of losing them. just things to consider. nothing is free
You guys are a reputable show, why not invite Alex from Celsius and then revisit this topic. I love your show, however, knowledge on this matter seemed limited.
This didn't age well :/
I think this entire concept using central banking is dumb. Crypto should remain total ownership. A Bitcoin mortgage should be entirely in the crypto sphere and not tied to the conversion to USD. Sell the house for 50 Bitcoin and the buyer pays back that certain amount over a contracted period. If they can’t pay it in full they get a fraction of their money back. If they complete the purchase the seller gets their percentage and the house is now sold to the buyer.
lol, interest rate on Bitcoin collateral loans at Celsius is only 1% at 25% LTV. It is wonderful!
Celsius it is 1%...
But if you take loan, they don't give interest on collateralized bitcoin. So effectively loan interest goes to something around 22%.
@@suryakantpatil5752 - That is normal behavior and why you get a 1% loan with a LTV of 4 to 1.They will then use that collateral to make money off of for their business. This is good business practice and if they did not do that then I would think it was a scam and worry about where a company is earning the yields it pays to its clients. The great part is you don' t need to sell your bitcoin and you get it back once to pay the loan back immediately and this is all done in the app. Celsius invented yield on your crypto back in early 2018 and are by far the best of breed in the space.
I've thought hard at taking a collateralized loan with celsius as it's much cheaper interest than other options. But, I'm worried about the price tanking too much and having to liquidate.
@@Allenar4 - To get the 1% rate you need to lock up 4 to 1 so you should be good but if not, have other crypto or stables there that you can use to collateralize your loan. Celsius is not trying to liquidate any one and they send you messaged when and if you get close. They will work with you to help get stuff in order so you don't get liquidated. Bitcoin has already dropped 50+% from the highs so personally I think you will be fine with the 1% loan.
THORChain is already live since Apr 2021 for depositing native non-wrapped BTC into Liquidity Pools to earn fees.
In future (hopefully months), you CAN keep “ownership” of your native BTC and get a decentralised loan from THORChain…