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I'm now completely convinced that this entire drawdown - which may have been started by API problems on Binance, but if it hadn't have been that it would have been something else - is all about liquidating bitcoin backed loans. It's a terrible incentive sitting out there in the market. A HUGE pot of bitcoin that is suddenly up for grabs at LOWER prices. And this world is full of rich people who want our coins. If you needed liquidity above $100k you had two options, sell or take a loan out. Of course there were lots of companies eager to sell you the dream of getting liquidity without selling your bitcoin, unfortunately that's all that is, a dream. We've been sold a lie that bitcoin is the best possible collateral because it's liquid 24/7! Well sure that makes it amazing...FOR THE LENDER! For the borrower it just puts a target on your back. You thought you were a hardcore hodler, but you just posted your coins for sale at $58k! And guess what? There are buyers who want that deal! We're going to go down until every reasonably accessible bitcoin being held as collateral is freed up and sold to someone that ain't one of us! If you avoided taking out a loan, congrats! If somehow you have some dry powder now, amazing, you deserve these cheap sats. If you're looking at liquidation even anywhere in the 50's, I'd consider cutting your losses and closing your loan with collateral. If you can get your margin call price into the 40's I would hope you would be safe, but who knows. There are no rules in a truly free market.

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There was an episode with Preston about 2 years ago where someone from Cantor was on they were basically asked if you understand Bitcoin, why lend people money against Bitcoin when you could be buying Bitcoin with that money. And they essentially said if you get Bitcoin from liquidation events you pretty well promised cheap Sats. They're model is BUILT on get Bitcoin from people over leveraging.
loan is a tool. there are safety rules: - take a loan when you don't need it - take a loan in collateral bear market - be ready to loose the margin and to re-buy the collateral in fiat terms don't take the loan if you don't really understand what you're doing or out of desperation.
↩ replying to Leo Wandersleb
No. It doesn't when you own the exchange. You can easily decimate the price by x10 if you are connected tk or own the 2 or 3 biggest CEX directly or indirectly. Then you close withdrawals and wait for more people to panic. The playbook is known for at least 5 years. That you still ignore it because it first has been only tested and perfected on Monero doesn't speak for the smarts of Bitcoiners.
Yeah - I picked up a loan last August & I agree with what you're saying. It's a small loan but there is no price that bitcoin cannot go to. Price is set on the margins. The thing that catches most offside is that as the price drops, extra collateral provides increasingly less value to prop up the loan. A small loan can quickly risk your whole stack through your exponentially diminishing collateral. Sometimes it's best to cut your losses early. Run through your calculations & scenarios - know the lowest price that you can defend your loan to (mine is about $6K).
Solid point And could well be the case Fascinating isn’t it I almost have @Danny Knowles in my head saying “if you don’t want to sell your Bitcoin, then take a loan from Ledn” advert Amongst many others Of course responsibility is always on the investor themself, it’s not a podcasts fault You took the risk But the key here is that perhaps leverage IS the problem It makes the market inherently unstable, as these volatility spikes smash through the margins and LTV in place Fascinating times
I thought I could have it all. Nope. Liquidated at 65 then another loan again at 61. Loan seemed perfect... I thought I took it out near the bottom at the time with only blue skies ahead... boy was I wrong. Lesson learned the hard way. I should have listed to Odell and stayed humble and stacked sats
While not a loan against Bitcoin, in the past I borrowed against “the next bitcoin” 🤪 I only had 15% LTV and thought I was safe… “Negative Redbird” It took less than a week before 100% of the borrowers were liquidated. Today, “the next bitcoin” sits at $0.02 per token. Like I read in the comments from @Brisket “know your number” A point of Bitcoin is to “move closer” not chase more. I’m pointing the fingers right back at me because I’m a sinner too and have over leveraged in both crypto land and fiat world… Sometimes it’s necessary, after all that’s why we have assets and create liquidity layers…so that when life hits you up side the head (like your wife endures and botched surgery and your not sure what the next three years will look like) Yea…borrow against what you have. Give yourself runway! But if it’ll the borrowing is simple to get more of what you already have or want, then I don’t think that is healthy (let alone aligned with the Bible) Peace to those hurting right now. …Oh and Good Morning Nostriches! #GM #PV View quoted note →