Bitcoin is widely recognized as a store of value, but many investors face a dilemma: how to obtain liquidity without selling their cryptocurrencies and losing future appreciation? The good news is that there is an efficient strategy for this.
Instead of selling your Bitcoins, it is possible to use them as collateral to obtain loans in stablecoins, such as USDT, USDC, or EURI, through Binance Loans. This way, you achieve liquidity without having to give up your assets.
How Does the Strategy Work?
The main idea is simple: you put your Bitcoins as collateral for a loan and receive an equivalent amount in stablecoins, which can be converted to reais and used in daily life. Then, just pay off the loan and recover your Bitcoins, similar to a mortgage in the real estate market.
But there is an important detail: like any secured loan, there is a risk of liquidation if the price of Bitcoin drops drastically. To minimize this risk, I use the strategy of hypercollateralization.
What is Hypercollateralization?
Hypercollateralizing means providing collateral that is much greater than the amount you are borrowing. This considerably reduces the risk of liquidation.
Practical Example:
You have 0.1 BTC and need 1,000 dollars.
Instead of taking the loan with a tight margin, you use your Bitcoin as collateral, ensuring a safer liquidation margin.
Generally, with this strategy, the margin call is around 96% of the collateral value, which means that the price of Bitcoin would need to drop drastically to put your loan at risk.
Furthermore, it is essential to monitor interest rates. At Binance, loans in USDT often have lower interest rates than those in USDC, making them more advantageous.
Advantages of This Strategy
✅ Instant liquidity without having to sell your Bitcoins.
✅ Protection against volatility, maintaining a safe margin.
✅ Possibility of BTC appreciation while you use the money.
✅ Flexibility to pay off the loan and recover your assets.
Conclusion
If you are a long-term investor and want to maintain your position in Bitcoin without giving up liquidity, this strategy can be an excellent alternative. By using hypercollateralization and monitoring the liquidation margin, it is possible to access cash when needed, minimizing risks and maintaining control over your investment.
Before adopting this strategy, always do careful calculations and pay attention to interest rates. This way, you ensure that your assets continue to grow while enjoying the benefits of this smart approach. $BTC $BNB $USDC
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