-
@ XeqT Monetary Freedom (∞/21M) + (₿+⚡) = 🧡
2025-05-08 16:17:10
I don't understand how capital allocators fail to understand the following:
1. They lend out $100, for every $200 worth of collateral the borrower pledges.
2. The collateral, although volatile, trades 24/7/365 and has global liquidity.
The lender is basically getting as close to a risk-free yield as they can hope for, because the borrower is not debasing the currency to pay them back, like the government does.
For those two facts alone, interest rates on overcollateralised Bitcoin-backed loans should be below the current US 1-year treasury which is ~4%.
The capital allocators don't need to understand every aspect of Bitcoin, to lend against it.
They just need to understand points 1 & 2, which tells them that the borrower pledges twice the amount of collateral that they borrow and that their collateral can be liquidated at any time, if the LTV goes beyond a certain level.
Just my 2 sats...