
Japanese exchange will pay you 5% interest to borrow your Bitcoin for a year - mbgaxyz
https://coincheck.com/lending
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jimrandomh
Doing this would be betting that there's less than a 5% chance of this
exchange going bankrupt. If they did, you would be an unsecured creditor and
would be last in line to get paid back in bankruptcy proceedings.

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lippel82
This is the opposite of speculating on a rising price. It is a way of shorting
cryptocurrencies. Sell now and pay back your creditors after the crash.

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phire
The best case is the exchange is shorting the btc they borrow from investors.

Worst case, the exchange is insolvent and needs BTC to allow withdrawals to
continue.

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mbgaxyz
How can they generate more than 5% yield on an asset which provides no
cashflow?

From proprietary crypto trading?

Selling and investing in high-yield junk bonds?

It can't possibly be just speculation on a rising price.

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jonex
Could just be speculation on falling prices.

1\. Borrow BTC

2\. Sell borrowed BTC at high price point

3\. Buy BTC including interest at lower price point at any time before payback
date.

4\. Give back BTC including interest at payback date.

Basically just a way to short sell BTC.

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notyourday
This is equivalent of getting a locate for short selling. 5% is the loan
interest.

