The “never sell” Bitcoin treasury trade is seriously starting to crack
Bitcoin holders long using their assets as collateral to borrow instead of selling are facing increasing pressure as market volatility rises and lending protocols tighten terms. This strategy, popular among institutional investors and hodlers, risks forced liquidations during downturns. Indian crypto investors relying on similar leverage tactics should monitor collateral ratios closely amid uncertain regulatory clarity.
Key takeaways
- 1Bitcoin holders using assets as collateral to borrow are facing forced liquidation risks as market volatility increases and lending protocols tighten terms.
- 2The 'never sell' strategy popular among institutional investors requires close monitoring of collateral ratios to avoid losses during market downturns.
- 3Indian crypto investors using leverage-based borrowing tactics face additional risks due to uncertain regulatory clarity in the domestic market.
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Why it matters
As lending conditions tighten globally, Indian retail investors leveraging crypto assets for loans could face sudden liquidations without regulatory safeguards. Understanding these risks is critical given India's evolving crypto policy and volatile market conditions.
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