The general consensus within the HODL club is that if you have no pressing need for cash, never sell your crypto. And even then, you're advised to borrow against it (using your crypto as collateral), instead of selling. So, you have the cash you need to settle your immediate needs while still keeping your crypto.
This all sound so amazing, but to avoid getting your coins liquidated to settle the loan, you have to keep a very healthy loan-to-value (LTV) ratio. And that brings us to answering the question, when is the best time to borrow against your crypto?
The best time to borrow against your crypto is during a major dip or late into a bear market when further price decrease is less forceful or less likely.
Even at that, you should only borrow at most up to a maximum of 10% to 25% of your entire portfolio to keep the liquidation threshold far away.
Furthermore, if you have to borrow for personal purposes such as buying food or paying other real-life bills, make sure to repay the loan as soon as possible.
Otherwise, you'll end up exhausting your loan limit and risk imminent liquidation.
What's your best time for borrowing against your crypto and how do you manage the risk of liquidation?
Hmmm… I never borrowed against my crypto. Just earn more crypto from blogging… you get 25% liquid blurt from posting on Blurt. That’s more than enough to cash out and buy food, pay rent etc…
hahaha... true. But that depends on the amount of Blurt you earn tho
I earned almost 1 million blurt in one year, from blogging original content .. so it’s possible. I Also cashed some out to buy Bitcoin, Eth, Dogecoin on Ionomy.com and bought bought a nice little car… and 2 kayaks.
I see. Impressive result there.
Congratulations, your post has been upvoted by @r2cornell, which is the curating account for @R2cornell's Discord Community.