Bitcoin will never be used as a collateral because of its high volatile nature, using Bitcoin as a collateral will cause serious uncertainty for the lender and the loanee.
Rather than all this complications if you need money urgently and don't want to touch into your Bitcoin why don't you just get a loan normally without ever bringing your Bitcoin into play.

There are Contracts like DLC( discreet log contract) that makes use of existing OP Codes
In peforming this function.
They allow native BTC to be locked as collateral directly on Bitcoin with an Oracle providing external data like price.


That's not really true and too absolute
Stats are showing that as the years goes by volatility is reducing
It won't be wrong that we might get to a stage where volatility would be relatively low as Gold.

That's very possible. Usually, Bitcoin loan schemes use LTV (loan-to-value), which determines how much you can borrow from the lender. LTV on each platform varies, for example on Binance, the LTV they offer is 65%, so at most, you would only be able to borrow 65% of the value of your Bitcoin collateral. Later, Binance will adjust the collateral and trigger a liquidation if needed, if the value of your Bitcoin drops too much. With this scheme, borrowers can avoid risk.


Sometimes there are things that are so urgent that a person needs money quickly, or they are just too lazy to apply for a loan which usually takes time to process. By collateralizing their Bitcoin, they can get money fast and they can choose the duration for that loan.

The way you say never, like it's never gonna happen at all. I'm not too familiar with the whole schematics of lending your Bitcoin for USDT, but I know it's not impossible to do. It's all on the agreement between the two patties, I mean, I can get a loan of my bitcoin worth the amount of $1000 for USDT of probably 500-600$ depending on the timeframe and the urgency of the loan and also as per interest and collateral values since bitcoin is a volatile asset and can result in the lender losing if the amount gets too low. But the whole deal is not gonna be something of a long-term deal, so the entire deal can be arranged and sorted.

I would be more willing to take a loan depending on my financial situation. I would never decide to sell my Bitcoin unless I have passed the deadline and no matter how difficult the time is in between, I will try to cope with it as much as possible without selling Bitcoin. If I have the ability to make a loan, then I will definitely take a loan and I will be willing to solve that problem with a loan. However, if I can take it directly, I will be very happy, if I can take a loan directly without putting Bitcoin as collateral, then I will adopt this method.

Well if I may say everyone has their opinions and experiences, but for me I think it all comes down to the person's income source like how you make your money. Because if he or she borrowed money to invest in bitcoin, it doesn't mean they have to pay back with that same bitcoin they borrowed with, because that's technically an investment, not a short term pump and dump. Basically you can pay back what you borrowed with fiat, that's if you have a steady source of income....​But if you don't it would be hard telling if you are actually making a profit or just taking a random risk. Best to say you cannot tell when the market will rise so relying on facts like 'no matter how far Bitcoin falls, it will rise back up' doesn't mean the time limit for the money you borrowed would wait until Bitcoin rises..that's where most folks get caught in a wipe out.​So yeah perhaps sometimes selling a portion of it is worth it just for you to have  peace of mind.thats all......

Hmm, that is an interesting point. If I have to pay interest over the borrowed amount, better to sell BTC without having that "extra prejudice" over finances. Unless we are talking about a bullish season, it must not be that risky to sell BTC and then purchase it again some time later for similar prices or even cheaper prices, considering it might be a bearish season. To take loans should be also the last alternative to be taken into consideration, due to the fees and interest involved.

When investing in Bitcoin in the long term, it is very normal for investors to need money unexpectedly. From my point of view, it is reasonable to sell a small amount of Bitcoin, because Bitcoin is unstable, so taking a loan with Bitcoin as collateral is not reasonable. This can expose both the lender and the borrower to high risks and if you take a loan from a bank you will have to borrow a much larger amount of money than the principal, which can result in more losses for the investor. Therefore taking a loan with Bitcoin as collateral or paying a high amount can put the investor at a loss, so selling a small amount of Bitcoin is reasonable in my opinion. This will not create additional mental l pressure on the investor, so the investor will be able to buy Bitcoin again continuously.

To me it's safer to sell some of my BTC even though I might be charged tax on it, but it won't stop me from DCAing to replenish what I sold off mostly if am consistent in my effort and am reinvesting what I sold into other investment that promises a good return, not for luxury purposes or frivolous spending or for gambling.

USDT might be a better option to borrow but I would in this sense prefer to borrow the USDT from someone I know or from a trusted party so as not to expose myself to some unforseen risk that arises.

No, I disagree with you. You can't use the word "never" in something like this because this is something that can happen with just an agreement and understanding reached. Although this will be risky because of volatility, but someone like me will choose to take a loan using my bitcoin as collateral. In order not to default in payment, I will have to make sure that I myself have a clear plan to repay on or before the due date. If there are fluctuations in the price of bitcoin on the day of repayment, the loan terms should be able to cover any discrepancies. Taking a loan is better than selling your bitcoins when you're in for a long term journey. If there are other collateral options, you can go for it if you are not comfortable using bitcoin.