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Illya Gerasymchuk
Entrepreneur / Engineer

Bitcoin is not a good collateral for a loan, here's why:

Bitcoin is not a good collateral for a loan, here's why:

1️⃣ You can only get ≈50% LVT credit
2️⃣ You pay higher interest than on mortgages/real estate-backed loans
3️⃣ You get liquidated from ≈80% LVT

So if your strategy is to purchase assets and use them as collateral for loans, you may be better off with real estate:

1️⃣ You can get more than 75% LTV credit
2️⃣ You'll pay lower interest for a mortgage/real estate-collateralized loan than for a BTC collateralized loan
3️⃣ No liquidations when real estate is collateral. If property (collateral value) falls, you may be requested a cure, but forced sales must go though courts.

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