Bitcoin strategy for leverage

I was delighted to see scoresby's article about bitcoin bonds. It strikes me some questions but in his story, he/she checks all the bonds' view and the role played by bitcoin historically. Now, one question remains to many bitcoiners, should you borrow your assets in order to take a loan? This time, I would like to say yes because it's horrendously easy to setup and it's a financial movement that, made with brain, it's a good way to take profits.

This is financial advice of how I did it but not this time. Rather, I made this strategy in the 2021-22 bull run using wrapped Bitcoin but the essence of what we doing it remains the same.

Difficulty level: ⭐/⭐⭐⭐⭐⭐

Requirements

1. Hodlhodl Account

2. DeFi/CeFi exchange of your preference

3. USDT account (ERC20/Liquid/Polygon)

4. Rootstock account, I recommend for this Tropykus

Ok, about the rationale

We're using all the models that establishes that NgU ™️(stock-to-flow , power law and a big etc), all of which states that prices against the USD goes up because bitcoin is deflationary at the time and scarcity. Having said that, now, we're entering to Hodlhodl where we'll make our first loan and then buy more bitcoins as follows.

Step by step

Step 1: Go to Hodlhodl Lend and accept the best offer you want to take. Best scenario is always take something that have loan-total-value or LTV above 60, meaning that we leave the least amount of bitcoins to take. Say you want to take 1000 USDT and found something close to .55, you have to leave 1500 USD equivalent in bitcoin locked to close the order.

Step 2: Once you collected everything and the user released your USDT, go to your favorite CeFi/DeFi exchange and swap your USDT for bitcoins.

Step 3: Those bitcoins that you have, you can't leave it that so, we have plenty of options of what can we do.

1. Hodl and just wait.

2. Go to your favorite CeFi and start earning 2-3% APY.

3. Go to Rootstock, swap to rBTC and take another loan.

For the purpose of this strategy, I made one more movement and go to Rootstock to make one more movement: swap.

3.1 Swap BTC/rBTC, could be at Changelly, Boltz, FastBTC
3.2 Put rBTC as backup
3.3 Take a loan for dollar-on-chain (DoC)
3.4 Buy rBTC

And here is where I hodl.

The leverage

You should check the APYs paid in every step but having made some movements, I would say the loans taken and the growth experienced have more benefits than losses. The important thing to consider here is how much leverage you should take. My advice to you is simple: you have zero experience doing this, maxium is 30% leverage of the total invested. With some experience, you can go up to 50%.

Now, consider always that bitcoin price can go down. Hodlhodl and Tropykus could liquidate your positions and take your bitcoins if you're not careful enough.

Sir, are you out of your mind?

Yes, but that's not the point. Having said the rationale previously and using bitcoin as the real backup, we hope to grow in th worst-case scenario at least 25%; take into consideration that Tropykus pays zero interest for each bitcoin you deposit and if you want some APY, you should consider Ledn or any centralized exchange.

Cons

• Greedy: You could become greedy and try to leverage more. You're f***d.

• Anxiety: You can't take 30-40% of loss and start selling. This is very common among people that don't plan accordingly.

• You don't plan your leverage: So, this is currently the most important thing. Plan according to your needs and goals because in our ecosystem, you get rugged with no mercy.

Remember, this is my non-financial advice. It worked for me.