Crypto Long & Short: Bitcoin-backed loans belong in the cost-of-capital conversation
CoinDesk
Bitcoin-backed lending serves as a capital-efficient tool that should be evaluated alongside traditional debt options for institutional and individual balance sheets.Summary
This article argues that Bitcoin-backed loans should be treated as a legitimate component of the cost-of-capital discussion rather than just a niche crypto product. By utilizing Bitcoin as collateral, borrowers can access liquidity at competitive rates, potentially reducing their blended cost of capital compared to traditional sources like HELOCs or personal loans. While the model offers efficiency and speed, it requires careful risk management regarding Bitcoin's volatility to avoid liquidation. Ultimately, for those already holding the asset, leveraging it can optimize balance sheets without the need for taxable sales.
(Source：CoinDesk)