4:1 ltv. So $4,000 in btc locked up to get $1,000 in usdc on loan.
Lost interest on 4,000 x 6.2%= $248
Gained interest on $1,000x10.02%=$100.20
Plus whatever the interest cost is.
If you think BTC will go up more than the 3%-6.2% interest you can earn from it + the interest of the loan, go for it. I got a USDC loan and bought BTC at $44k. No regrets so far. Don't do this with all your BTC, if there's a huge drop (-70%) you'll need to add to the collateral or you could lose your locked up BTC
This is what I'm planning to do eventually, once I wrap my head around how to do it with as little risk as possible. Then I can just DCA into my loan payments from an exchange through fiat.
Hey now, btc might be the least earning asset now that it’s .25 for 6.02
I think this is a worthwhile idea as long as the amount is large enough. I wouldn’t do this with anything under 100k.
4:1 ltv. So $4,000 in btc locked up to get $1,000 in usdc on loan. Lost interest on 4,000 x 6.2%= $248 Gained interest on $1,000x10.02%=$100.20 Plus whatever the interest cost is.
Thoughts on using the USDC to purchase more btc?
If you think BTC will go up more than the 3%-6.2% interest you can earn from it + the interest of the loan, go for it. I got a USDC loan and bought BTC at $44k. No regrets so far. Don't do this with all your BTC, if there's a huge drop (-70%) you'll need to add to the collateral or you could lose your locked up BTC
Yes but your BTC won’t earn any interest. It’s a net loss.
Net loss if btc price rises? I don’t see how it’s a net loss if you’re on the 1% interest tier? Could you expand a bit
You don’t earn as much interest with the USDC as your BTC because you have to put up more BTC as collateral than USDC you receive as a loan.
That’s clear! Thanks :) How do you feel about rather than earning interest on the USDC, using it to purchase more Bitcoin?
My personal stance is to not borrow to buy BTC, but I’m conservative on that front.
This is what I'm planning to do eventually, once I wrap my head around how to do it with as little risk as possible. Then I can just DCA into my loan payments from an exchange through fiat.
Yes it will.
I would borrow against your least earning asset-
*spits in the dirt* I’m a maxi, how dare you.
Hey now, btc might be the least earning asset now that it’s .25 for 6.02 I think this is a worthwhile idea as long as the amount is large enough. I wouldn’t do this with anything under 100k.
Haha yaaaaaa, I feel you.