Lets say you have 1 bitcoin you borrow 5% of your bitcoin value and buy more bitcoin annually you will end up having so much more bitcoin over the years.
As long as bitcoin goes up more than 5%+the interest of the loan you will end up making more money overall.
If 5% is considered high risk then make it 2% or even 1%, however the strategy is there.
Now imagine if a big portion of bitcoin holders start doing the same thing it would cause a big supply squeeze.
Will people start doing this creating a bitcoin pump?
byu/TT_________ inBitcoin
Posted by TT_________
2 Comments
People already do this, it’s called leverage. It doesn’t usually work put for them in the long run.
It’s a fantastic strategy! Assuming btc rises. Lousy strategy if btc lowers.