For me this is good sure for sure because when banks starting to accept Bitcoin as a collateral that just means that they are now trusting Bitcoin as an asset, Bitcoin adoptation already come a long way back to 2016 if I remember it right cryptocurrencies are not even recognized by the banks, usually banks and cryptocurrencies is two separate things or usually on a discussion they are rival since crpto like what other said back in the day is going to kill the banking system. But now the banks are already adopted to Bitcoin and cryptocurrency plus it has already come to the point where Bitcoin can be used as collateral.
So when it comes to value it is getting recognition, most likely it is already getting similar to something like a gold asset or like a property, real estate, maybe like a house. I don't see anything wrong with it, it was just part of the process of adoptation if we are thinking long term into Bitcoin.
I believe organisations as Bank already knows the value of Bitcoin but since it has not been generally approved that is the reason it usage seems to be slacking, in the sense that they will love to use it not only as collateral means but for other transactional means, but it is a good development that Bitcoin at least got to this level it will go further and will one day be fully accepted for other means, because I am sure Banks will not hasn't to include Bitcoin in the long and other businesses but since the government has not given the access to the people in some places it's use becomes a little slow.
Banks don't necessarily need to wait for Bitcoin to become a common payment method before building around it. Lending and custody could develop first because they fit more easily into existing financial systems. Wider payment adoption may take a different path.
Well, bro, this can't be the real adoption of Bitcoin because they just gave people a way to hand their coins over to them and then not own them because now they own your coins unless you pay the interest on time. Adoption is when banks believe in it. I can be wrong, yep, but they don't believe in it. They are just after customers' money haha.
Also, it's irrelevant, but the same offers have been made by other projects too, like Celsius, BlockFi, etc., and you can see where they are now, although it's irrelevant because now we are talking about banks, and banks have money. But we were earning from those platforms, while here we are giving them our money and they are earning from it, so they are not going anywhere. Instead, they are giving us money from other people's deposits and earning on that while providing this service. Typical banking behavior haha.
But yep, you can say it's development.
I think there's a difference between banks accepting BTC as collateral and actually embracing Bitcoin as a financial asset. Still, borrowers aren't automatically giving up ownership permanently; it depends on the loan terms and what happens if they default. The bigger question is whether people understand the risks before using their BTC to access cash.
Its a nice development, we were bound to reach this point with time, the main thing that should be considered whether as an individual or a company before deciding to use your BTC as collateral is to have a financing that has a sustainable repayment source and terms that can withstand a major price decline.
The main difference between a good loan and bad loan is sustainability, what makes a loan sustainable?? A good repayment Cashflow and ability to withstand a downturn, unfortunately companies are more likely to be able to fulfill these conditions than individuals that why I wouldnt recommend individuals to per take in this type of loan, for them, the risk to reward ratio is not worth it.
A business can take the loan and use it to fund an investment which can generate operational Cashflow whereas an individual borrowing to cover everyday expenses may not have a comparable income generating asset or a repayment plan
The purpose of the loan matters a lot too. Borrowing to expand a business with predictable returns is very different from borrowing just to avoid selling BTC while covering daily expenses. I'd look at whether the loan creates enough value to justify putting the BTC at risk in the first place.
