Bitcoin at $100,000: How It Affects Your Loan

When Bitcoin rises, your LTV drops proportionally because your collateral is worth more while your loan stays the same. **Example: $50,000 loan with 1 BTC collateral** At $70,000 BTC: - Collateral value: $70,000 - LTV: 71.4% (danger zone) At $85,000 BTC: - Collateral value: $85,000 - LTV: 58.8% (moderate risk) At $100,000 BTC: - Collateral value: $100,000 - LTV: 50.0% (healthy) The same loan goes from potentially facing liquidation to comfortably safe, purely from Bitcoin's price appreciation. This is the power of Bitcoin-backed borrowing—you benefit from upside while maintaining your loan.

Higher Bitcoin prices unlock additional borrowing power against your existing collateral: **With 1 BTC at $100,000:** - At 30% LTV: Borrow up to $30,000 - At 40% LTV: Borrow up to $40,000 - At 50% LTV: Borrow up to $50,000 - At 60% LTV: Borrow up to $60,000 **If you already have a $40,000 loan (40% LTV):** - Additional borrowing available at 50% LTV: $10,000 - Additional borrowing available at 60% LTV: $20,000 **Strategic considerations:** - Take additional loan for investment opportunities - Withdraw excess collateral for other uses - Simply enjoy the improved safety margin Be cautious about immediately maxing out new borrowing power—Bitcoin could retrace, putting you back in a higher-risk position.

$100K Bitcoin dramatically expands your safety margins: **Example: $50,000 loan with 1 BTC, 80% liquidation threshold** At $70,000 BTC: - Current LTV: 71% - Liquidation price: $62,500 - Safety margin: 11% ($7,500) At $100,000 BTC: - Current LTV: 50% - Liquidation price: $62,500 (unchanged) - Safety margin: 37.5% ($37,500) **Key insight**: Your liquidation price stays the same (it's based on loan amount, not BTC price), but your distance from it expands dramatically. At $100K BTC with a $50K loan, Bitcoin would need to drop 37.5% before liquidation—that's survivable even in significant bear markets without taking action.

If you have an existing Bitcoin loan and BTC reaches $100K, consider these strategies: **Option 1: Do nothing (recommended for most)** Enjoy the improved safety margin. Your loan is now in a much healthier position. No action required. **Option 2: Withdraw excess collateral** If your LTV has dropped to 30%, you could withdraw some BTC while maintaining a 50% LTV. With 1 BTC and $50K loan, you could potentially withdraw 0.4 BTC and still have healthy margins. **Option 3: Take additional loan** If you have productive uses for capital, you can borrow more against your improved collateral value. Be cautious—this increases your loan amount and raises your liquidation price. **Option 4: Rebalance** Consider paying down some of your loan while Bitcoin is high. This locks in gains by reducing your debt, improving your position regardless of future price action. **What NOT to do**: Don't assume $100K means Bitcoin won't retrace. History shows significant corrections follow new highs. Maintain reasonable LTV even when prices are elevated.

Bitcoin has long been expected to reach $100,000, with various predictions over the years: **Why $100K matters psychologically:** - Round number milestone - Represents ~2x from previous cycle high ($69K) - Media attention and FOMO typically increase at major milestones **What typically happens after major milestones:** - Initial euphoria and potential overshoot - Eventual correction (20-40% pullbacks are normal) - Consolidation before next move **For loan holders, this means:** - Enjoy the improved LTV at $100K - Don't assume it's the top or bottom - Maintain prudent loan management practices - Set alerts for if BTC retraces to protect gains The loan strategy that works at $100K BTC should be sustainable whether Bitcoin goes to $150K or pulls back to $70K.