$BTC #loans Hello fellow Binancians, are you aware of the fact that you can take out loans from Binance? Yes, that's right, and it's also super easy and instant, too - but you do need an equal amount of deposited crypto as collateral.

So how exactly does this work? All of the following examples are using BTC, because everyone should have at least one relatively stafe pick in their portfolio. I have also decided that we're going to borrow USDC, because it's pretty close to being a traditional loan.

The rundown: You could borrow USDC from Binance if you have deposited BTC on the exchange. You will get approx. 71% (keep this value in mind for later) of the collaterals (BTCs) worth in USDC. You can do anything you want with that loan, even turn it into fiat and move it off the exchange, but your collateral will remain frozen on Binance. (You can still keep the collateral subscribed to flexible earn though)

This kind of loan could be very useful in a bear market, when you have done your research and believe that the market has reached its bottom, because it enables you to invest more into BTC with no additional fiat inflow. Once you've made profits, you can convert your BTC back to USDC and pay off the loan, while keeping all of the remaining (more valuable) BTC for yourself. The only downside to doing this is the net annualized interest rate of approx. 11%.

Risks: The biggest risk with this kind of loan is to be liquidated. This means that Binance is going to sell your collateral if the value of BTC drops too much, because this will increase your LTV (loan-to-value) factor from our initial 71% (remember?) to 91%, at which point the liquidation will take place. The solution would be to take out a more conservative loan (50% LTV) for a bigger safety net, as well as to regularly repay parts of the USDC loan to decrease your LTV.

Be careful about what you're going to do with this feature, because getting liquidated would definitely hurt, but at the same time do not ignore the potential for additional gains when using it responsibly.