The strategy is that as the price

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The strategy is that as the price of bitcoin goes up, you’d continually roll over into new loans to pay back old loans.

This is how you get cash flow with bitcoin.

There are two major hiccups in this strategy though, and both have to do with the fact that this strategy requires that bitcoin’s price always goes up.

First, if there is a market crash or long term bear market, you could be force to netherlands whatsapp number data more bitcoin or have your collateral liquidated. You MUST maintain the required minimum LTV. If it’s 50%, and your $20k worth of bitcoin dips down to $15,000 in value, you’d have to post more bitcoin to maintain your LTV ratio. If not, they’ll just take your bitcoin, even if the price dip is temporary!

Second, bear markets can last years. If you borrow a years worth of expenses against your bitcoin, and suddenly a year later you need to pay back the loan, you can’t just roll over into a new loan to pay back the old loan as expected! You’d need to pay the loan in full, then post the bitcoin again to get another loan. Where are you going to get the cash?

Overall, this is not a fool-proof strategy to get cash flow from bitcoin. Most likely, you’d still need a day job or business to execute this type of strategy effectively, long term. You don’t want to get caught with your pants down.