Using Crypto Loans to LEGALLY Avoid Taxes 💰

Crypto loans allow you to take profits from cryptocurrency WITHOUT paying taxes, and they have tons of other benefits that make them a great tool for the crypto investor. Here's what you need to know!

00:00 - Intro
1:09 - Crypto-Backed Loans Explained
1:52 - Crypto Loans vs. Bank Loans
3:20 - Why Take Out Crypto Loans?
6:01 - How Much Can I Borrow? (LTV)
7:28 - My Experience (Celsius Network Loans)
8:58 - Step-by-Step Crypto Loan (Celsius Network)
10:12 - Best Platform for Crypto Loans

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One of the most fascinating opportunities with cryptocurrency is the ability to borrow money at practically no cost thanks to crypto-backed loans. Based on the numbers and my experience testing out this kind of product, I believe that a lot of people out there can benefit from this new form of lending, and I want to break it down further.

Crypto-backed loans are exactly what they sound like - they’re loans that you can take out against your crypto assets. When you take out one of these loans, you are using your crypto as collateral. In other words, you’re offering up your cryptocurrency to show that you’re good for the loan, locking it up with the lender in the process. When you pay off your loan, you’ll get your crypto back in full. But if you decide not to pay off the loan, the lender has the right to take your collateral to satisfy your debt.

Crypto loans don’t require any credit checks, whereas most traditional bank lending will require some form of a credit check. Similarly, crypto loans have near-instant approval, while traditional loans can take days or even weeks to be approved and processed. This means you can get access to the cash from a crypto loan within a few days, or perhaps even faster. Finally, crypto-backed loans often come with lower borrowing costs. Furthermore, traditional loans often come with all sorts of fees that you have to pay on top of your interest rates. Crypto loans, on the other hand, can enable people to borrow at lower interest rates and with little to no fees at all.

One of the most common reasons is the ability to cash out on your profits from crypto, without selling your assets. If your cryptocurrency portfolio has gone up in price significantly, you might be sitting on thousands of dollars in profit. However, if you sell that cryptocurrency in order to realize those profits, you’ll owe taxes on those returns. Taking out a crypto loan is not a taxable event, which means you can get access to substantial cash without paying anything to the government.

Another reason to use crypto-backed loans is as a replacement for an emergency fund. If you don’t like having large amounts of cash sitting around, it’s nice to have the option to take a loan out against your crypto in case of emergency.

The next reason is to add leverage to your portfolio. If the market goes up, you can earn much greater returns without having to invest more money out of pocket. However, if the market goes down, you could end up losing more money because you’ll have to pay back what you borrowed. I would not personally encourage leveraging a crypto portfolio, because the market is already volatile and it could easily backfire during a market crash.

The last reason is to do something called interest arbitrage. This is when you take out a loan at a low interest rate, then invest it in a higher-yielding asset to cover the interest payments and earn income on top of it. Although there are many ways to do this, in crypto, you are most likely going to do this with stablecoins or high-yielding defi platforms.

#cryptocurrency #cryptoloans #bitcoin

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This video is meant for informational purposes only, and is not a recommendation to buy or sell any security or cryptocurrency. It is also not a research report and should not serve as the basis for any investment decision. Additionally, I earn commissions for purchases and sign-ups made through the links above.

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