Saturday, October 16, 2021

Adding collateral vs fiat?

So, I’ve gone a bit ham and got some loans to increase my Bitcoin allocation, I’ve got cold storage Bitcoin to keep the LTV ratio at 50% and also fiat on the side ready to lump in if needed at a moments notice.

Question is, why would I choose balancing the LTV over just paying down/off the loan. Is it a case of you would go with adding collateral if you didn’t have the fiat to pay the loan off?

As I understand it, both methods would essentially save my collateral from liquidation in the event of a downturn but I’m learning as I go so thought I’d ask.

Ideally the summer would have been the best time for this move, but once ATHs are broken I can’t help but feel this will be a good move by the end of next month.

Any and all advice appreciated.


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