The Bitcoin Collateralized Loan Strategy: 2 Cycles of Massive Gains
I've written extensively about my strategy for collateralizing Bitcoin into vaults and taking out DeFi loans against the collateral.
You can find my blog posts all throughout Hive and INLEO talking about this.
In short, you're DCA buying Bitcoin all throughout the bear market. You're taking that Bitcoin and placing it into a vault on a protocol like MakerDAO.
Then, you're taking out DAI loans against that Bitcoin. You can use DAI (or whatever stablecoin you are loaned) to pay for expenses IRL, etc.
You do this instead of spending actual $ on things. For example, let's say your rent is $1,000 per month.
Instead of just paying $1,000 per month, you could buy $1,500 worth of Bitcoin, collateralize it and borrow $1,000 to pay your rent each month.
This accumulates debt but also accumulates Bitcoin.
In a bull market, Bitcoin goes up, you pay down the debt and keep the leftover profits. It's far more money than you would have gotten if you just paid for things straight up.
Now, there are tons of other variables at play here. You have to stay safe and not get liquidated, you also have to earn above your living costs.
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▶️ 3Speak
What platform are these vaults on?
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Hi @khaleelkazi
Do you know if converting my Ether to Bitcoin using the conversion feature on my exchange Gemini has different tax ramifications then selling the ether and using the proceeds to buy Bitcoin?
Thank you
P.S.
I know it is not Financial Advice.