Loan Complexity
Managing multiple loans and platforms is challenging.
What is this risk?
Bitcoin-backed loans involve multiple moving parts: collateral ratios, liquidation thresholds, interest accrual, repayment schedules, and varying terms across platforms. As you manage multiple loans or engage in more sophisticated strategies (like DCA with loan proceeds), the complexity multiplies. It becomes increasingly difficult to track your total exposure, understand your risk profile, and know exactly where you stand at any given moment.
Think of it this way...
“Managing several Bitcoin loans is like juggling multiple mortgages on different properties, each with different terms, lenders, and payment schedules. Without careful tracking, it's easy to lose sight of your overall financial picture.”
How to Protect Yourself
Practical steps you can take to reduce or manage this risk
Use a spreadsheet or portfolio tracking tool to document every position, including entry date, amount, LTV, and current status.
Start with a single, simple loan before attempting more complex strategies.
Create a written plan for each position: entry criteria, management rules, and exit strategy.
Regularly review all your positions — don't set and forget.
Don't add complexity until you're comfortable with the basics and have proven you can manage simpler positions.
See This Risk in Action
Explore real-world scenarios where this risk plays a role
Other Risks to Consider
Explore other risks to get a complete picture
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