Crypto-Backed Loans Are a BAD Idea (Here's Why)
Crypto-backed loans have become easily accessible to retail cryptocurrency owners in recent years. Here's why they're a bad idea (for now).
With the rise of crypto lending and borrowing platforms like BlockFi, Nexo, Unchained Capital, and Ledn, borrowing cash against cryptocurrencies is easily accessible.
But when you take out an asset-backed loan, you run into margin call problems if the value of your collateral falls. If you can't top up the collateral or pay down the loan, you become a forced seller in a declining market.
For now, I think it's a good idea to avoid crypto-backed loans, especially high loan-to-value (LTV) loans that don't allow for big collateral drawdowns.
In the future, if digital assets like bitcoin are much less volatile than they are now, it will be a different story, and taking out bitcoin-backed loans will be a strategic move to avoid selling assets and minimize capital gains taxes.
➥ How I Buy Bitcoin Daily: https://www.swanbitcoin.com/projectfinance
➥ The Best Bitcoin Investment Strategy: https://youtu.be/H3KHSOcxk7M
➥ How to Not Lose All Your Crypto: https://youtu.be/v2rNOubDQv0
Leave me a comment if you have any questions or feedback!
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Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, cryptocurrencies, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading suits you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change anytime. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
Disclosure: Some of the links in the video description are affiliate links, which means I receive a small amount of compensation if you sign up for these services using my unique link. If you want to support the channel, it's a great way to say thank you! You can always head directly to the websites mentioned in the videos to avoid giving affiliate credit, but you may miss a signup bonus when doing so.
#crypto tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.
Видео Crypto-Backed Loans Are a BAD Idea (Here's Why) канала projectfinance
With the rise of crypto lending and borrowing platforms like BlockFi, Nexo, Unchained Capital, and Ledn, borrowing cash against cryptocurrencies is easily accessible.
But when you take out an asset-backed loan, you run into margin call problems if the value of your collateral falls. If you can't top up the collateral or pay down the loan, you become a forced seller in a declining market.
For now, I think it's a good idea to avoid crypto-backed loans, especially high loan-to-value (LTV) loans that don't allow for big collateral drawdowns.
In the future, if digital assets like bitcoin are much less volatile than they are now, it will be a different story, and taking out bitcoin-backed loans will be a strategic move to avoid selling assets and minimize capital gains taxes.
➥ How I Buy Bitcoin Daily: https://www.swanbitcoin.com/projectfinance
➥ The Best Bitcoin Investment Strategy: https://youtu.be/H3KHSOcxk7M
➥ How to Not Lose All Your Crypto: https://youtu.be/v2rNOubDQv0
Leave me a comment if you have any questions or feedback!
=====
Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, cryptocurrencies, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading suits you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change anytime. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
Disclosure: Some of the links in the video description are affiliate links, which means I receive a small amount of compensation if you sign up for these services using my unique link. If you want to support the channel, it's a great way to say thank you! You can always head directly to the websites mentioned in the videos to avoid giving affiliate credit, but you may miss a signup bonus when doing so.
#crypto tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.
Видео Crypto-Backed Loans Are a BAD Idea (Here's Why) канала projectfinance
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