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2026-02-02 16:05:08 UTC

ew0k on Nostr: Honest question how does borrowing against bitcoin even work? Long term cap gains can ...

Honest question how does borrowing against bitcoin even work?

Long term cap gains can be between 0-20%, let's call it 15% (according to internet)
You borrow around 12% interest, still have to pay that shit back

Thus, people are trying to live off the "free" 3% difference? While bitcoin itself is CAGRing at 30% annual anyway?

I get that there is a compounding effect of getting a 1 or 2 or 3% edge annual but this seems kind of ridiculous if it's what you're living off of. Not to mention, you wouldn't be borrowing against your entire stack. You'd really need to have like 500+ bitcoin for this to make practical sense.