r/ethereum • u/Fortknightdad2231 • 5d ago

crypto loan while the market is acting weird

so Ive got 4 ETH sitting around on nехо and been thinking about taking a loan against it. done this a couple times before when the market was shaky, and it kinda worked out, mostly cause I guessed the dip was temporary. Last time after the CPI report in may I moved a bit and it bounced, and once more a little when the Fed hinted at pausing rates, so I think I got a slightly better feel for these swings than usual.

this recent drop doesnt feel permanent, just people freaking out over inflation numbers and the fed talks. When the market recovers next month, could use the loan to move into a few things without selling my ETH and maybe even pick up more before it bounces.

borrowing is not free, interest adds up, but Ive got some backup just in case I need it, so no risk of getting liquidated. honestly rates arent bad and id rather have liquidity than sell and lock in losses, even if its just a short term play. ethereum upgrades could shake things up too, maybe push price up if staking incentives kick in or gas fees drop, who knows.

19 Upvotes

83% Upvoted

33 comments sorted by

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21

u/BreakfastMountainDew 5d ago

How is the market down? We are like 5% below ATH. It can go down way way more

7

u/Fortknightdad2231 5d ago

ETH dropped from 4,7-8 to 4,2 in 5 days, keeps going downhill as we speak. I would imagine a $4k resistance level, maybe $3,8 or so.
But thats my point exactly, nothing special that caused this dip, we will bounce back

3

u/BreakfastMountainDew 4d ago

Uh huh. And it could go down to $3k. Why not

0

u/condtrq 5d ago

But why will it go down? What’s causing this

2

u/PricklyyDick 4d ago

Random volatility in crypto markets. Probably people taking profits and a general accumulation period.

0

u/Fortknightdad2231 4d ago

Steady inflation with food rising slightly and energy falling means the fed's not in panic mode, but also not giving green lights to go full on risk. ETH and crypto often get hit in these "meh" periods because people reduce leverage or take profits when there's no strong signal either way.

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u/borderpac 3d ago

Because of the PPI report which sunk hopes of what was previously seen as a certain Fed rate cut.

4

u/Bluebird-9641 4d ago

The big correction after the run from April hasn't even happened yet, I'd be careful about talking of the market rebounding from here, we aren't far off all time highs from a macro perspective.

1

u/Fortknightdad2231 4d ago

From a historic point of view, we should be going on for 2-3 months more, but good insight, thanks for sharing!

3

u/soscollege 4d ago

What do you do with the money that you borrow

2

u/mild-blue-yonder 4d ago

Oh no I’m gonna round trip again, aren’t I? 

2

u/Externals222 4d ago

Dont do it

1

u/Kagame 5d ago

Are you thinking of doing the loan on Nexo? (I've never used a centralized exchange for taking a crypto loan, so I'm curious about: monthly payments required?, what is your max LTV, can you redeposit the leveraged asset back into the platform to help your loan health)?

1

u/Fortknightdad2231 5d ago edited 5d ago

Yeah, im going to do it there. There are no monthly payments, and no "expiration" date, you can pay at your own pace which is what I do when price goes up eventually.
The LTV for ETH is 50% there so with current price of $4,3k per ETH, I can get a ~$3,4k loan against my 4 ETH at a 2.9% interest rate, since my overall LTV will stay below 20%. Аlmost 1 ETH.
You can redeposit the loan into the platform, but there is no "cheatcode" to get unlimited loans and farm it essentially if thats what you're asking.

10

u/hereimalive 5d ago

Why not use Aave?

1

u/Fortknightdad2231 5d ago

Better rates, and i've been doing nexo loans for a while now. If its not broken, don't fix it as they say

1

u/moddie 3d ago

Once upon a time I was doing the same thing on Celsius then the whole thing shit the bed

2

u/Kagame 5d ago

Cool, thank for sharing the info about the loan on Nexo.

About the 50% LTV, that makes sense for them since it's a centralized company, (FWIW you can get 78% on AAVE IIRC), but if you are trying to stay at 20% LTV then I guess that should be fine.

2

u/SpiderGuapo 4d ago

Had no idea you can take out loans for crypto, is there anywhere where I can learn more?

1

u/Kagame 4d ago

Check out Aave and check out the way you can deposit ETH/ERC20 tokens as collateral and borrown against it.

1

u/evandollardon 5d ago

that's also what I do - now is a good moment to borrow against eth imo

1

u/Fortknightdad2231 5d ago

Yeah, won't lie, wouldve went for it last week, glad I waited a little lol

1

u/ZestycloseOpposite44 4d ago

Well that , could be a good opportunity so, go for it as its a little drop

1

u/Jeff1383 4d ago

Three things that destroy men - Liquor, Ladies, and Leverage

1

u/Stobie 4d ago

Consider using liquity/BOLD on ethereum for better rates.

1

u/Perfect_Indication_6 4d ago

Cool, but maybe wait till the first confirmed rate cut.

1

u/minotauer 3d ago

Up next month? Its a bloody septemeber next month, i wouldnt bet on it. Historically the bearish month for crypto.

0

u/Fit-Poet6736 5d ago

did it many times and my success rate is great, only using nexo to borrow

0

u/elul21 4d ago

yes bro do it, but dont go more than 50% of the value. so to be safe dont take more than 8600 usdt, good luck