This is an opinion editorial by Wilbrrr Wrong, a Bitcoin pleb and economic history enthusiast.

In this article, I describe my experience in using bitcoin-collateralized loans, of the sort offered by Holdhodl or Unchained Capital. I employed these loans during the bull run of 2020-2021, using some general rules of thumb, however recently I’ve made a study which shows that they could be used with greater safety if a more systematic approach is put in place.

I’ll make the caveat at the outset that my practice may well be criticized as failing to “stay humble.” Certainly many pundits would advise against these ideas, for example in this “Once Bitten” episode with Andy Edstrom.

I’ve had a longstanding interest in the use of modest amounts of leverage in financial strategies, and these ideas are presented solely to document my experience, and how it could have been improved.

Motivations

The first motivation for this strategy came from the excellent book “When Money Dies,” which details the step-by-step process of how Germany spiraled into hyperinflation in 1920-1923. One striking story from this period is that many Germans became rich, while the currency and country were going through hell. These investors took out deutschmark loans, and used them to buy hard assets like real estate. Then after one to two years, they would pay off their loans with deutschmarks that had become nearly worthless, and they would still be in possession of the real thing — a house, for…