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Item Purchase Strategy

Item Purchase Strategy

Access cash without selling your Bitcoin

Instead of selling Bitcoin to fund purchases, you can use it as collateral for a loan. This strategy lets you access liquidity while maintaining your Bitcoin position, potentially benefiting from future appreciation while getting cash today.

How It Works

Deposit Bitcoin as collateral with a lending platform, receive a loan in USD or stablecoins, make your purchase, then repay the loan over time. Your Bitcoin is returned when the loan is repaid.

Why People Choose This

•Keep exposure to Bitcoin's potential upside
•Borrowing may have tax advantages over selling
•Access liquidity without triggering capital gains
•Flexible repayment options on most platforms

Key Risks to Consider

Bitcoin-backed loans carry significant risks that require active management

Liquidation Risk

Liquidation Risk

Collateral can be sold if your LTV gets too high.

Collateral Value Fluctuations

Collateral Value Fluctuations

Rapid market swings can increase liquidation risk.

Platform Risk

Platform Risk

Lending platforms may fail or restrict withdrawals.

Fees & Costs

Fees & Costs

Origination and trading fees reduce profits.

Interest Accumulation

Interest Accumulation

Loan interest can compound over time.

Item Purchase Simulator

Compare buying outright vs. using a Bitcoin-backed loan

Item cost (USD)

BTC collateral

Loan-to-value %: 50%

Simulation mode

Regression testProjection

Start date

End date

Run the simulation to see results

Frequently Asked Questions