How To Keep All Your Bitcoin And Spend It At The Same Time

We all know the expression, you can’t have your whole cake and eat it. Except, in regards to bitcoin, you kinda can.

I’ll explain the process that I use and you can figure out if it works for you.

But how?

The idea is simple, bitcoin-backed loans. Basically, you give your bitcoin as collateral and get crypto in exchange. Now, that requires trust. I don’t suggest risking any large amount of bitcoin in this process. At some point there will be bitcoin-backed loans that don’t require you to transfer your bitcoin to them and you’ll hold a multisig key but those aren’t available to everyone yet.

At the moment, I use Celsius. That’s for two reasons, first of all it’s available worldwide. And second, they give out bitcoin-backed loans of 25% LTV with 1% interest.

That’s basically negligible when you factor in the yearly bitcoin gains. Even in a bear market, you can survive for a year or two by paying that amount. You’ll see in the calculator that the payments are small.

To sum this process up, you put up $400 worth of bitcoin as collateral and get $100 in stablecoins to spend.

What’s LTV?

Simple, it’s the Loan to Value ratio. You put in 100 to get 25. One quarter of what you put in, in simple terms. You can get higher than that but I don’t advise it. First of all the interest is higher, and secondly, you risk getting a margin call if bitcoin fluctuates too much. At 25% LTV it means that bitcoin has to drop 75% in price to get margin called, which I believe nowadays is not going to happen. There are huge investors with deep pockets just waiting for a firesale like that to scoop up bitcoins on the cheap.

At the time of writing this I have a loan that has a total interest of 11 USD. The BTC margin call is at $16,595. Liquidation is at $13,483. I feel pretty confident that bitcoin is not going to drop at 13 thousand dollars ever again, but this is not financial advice and you need to do your own research and understand the risk.

Should you decide to go this route, here’s what you’ll need:

• A place to buy bitcoin, duh! I use Relai. You need someplace that allows you to withdraw with a small fee, Relai lets us set it as low as 1sat/byte, which is currently about 8 cents. You can buy on Binance, but withdrawals there cost upwards of 20 USD minimum. And since we’re trying to squeeze out some cash here, it would eat into your profits.
• You’ll need a Celsius account. Same as anything else, you’ll need to activate it with KYC. You can use my coupon code for extra $40 dollars with your first deposit. You can buy bitcoin on the app but again, the fees are too high.
• A Binance account. Again, yeah, I know. It really is the Swiss Army Knife of crypto. You’ll need to KYC and get the debit card. The card takes about 2 weeks to arrive. If you want to squeeze out a bit of extra sats you can buy 1 BNB, keep it in your account and get 2% cashback, that will basically negate all the fees and the interest you’re paying. I wrote a small guide here.

Now, once you have all those accounts activated you’re ready to do this.

Here’s what I usually do:

• I load up my Revolut account from my bank account, either from my balance or I deposit cash on the ATM. I like Revolut because it sends SEPA transfers to Relai for free.
• I go to Relai, make a buy order, get the transfer code, go to Revolut, send a transfer to Relai’s bank with the transfer code they gave me and the exact amount. Again, you can use other banks if you prefer.
• When the bitcoin buy order completes I go to Celsius, grab the bitcoin deposit address for my account, go to Relai and make a transfer of 1sat/byte to Celsius. The transaction might take hours depending on the mempool, but I don’t mind. At some point, I get an email that says, “You’ve received coins.”
• When I have more than $400 worth of bitcoin in my Celsius balance I can get a loan. I start the process in Celsius, calculate one-fourth of the bitcoin I have and get a stablecoin loan for that amount. I choose Tether USDT. I make sure to round down so that the 25% LTV option is available.
• I go through the application process, choose a time period in months, confirm, accept the terms, and send the loan request. At some point it gets approved, usually takes a couple of hours.
• When the USDT is in my Celsius, I go in and grab a USDT ERC20 deposit address from Binance. Make sure it’s the right one or the funds will be lost. ERC20 means it uses the Ethereum blockchain. I copy that and withdraw from Celsius to that address. Now, for the first time only, there will be a confirmation and a lock of 24 hours. After that first time you’ll be able to just 2FA confirm and withdraw and it will keep the address in memory.
• The important bit is that the Tether fees are quite high, but Celsius will take care of those fees for you. So it’s a free transfer that would have cost you about 15-20 dollars. That’s yet another gain from this process.
• When the Tether arrives to Binance, I go to Trades, USDT/BTC, buy bitcoin spot. Then I go to Card, Transfer, and I send all the BTC to my debit card’s balance.
• And that’s it! I still have my 400 dollars’ worth of BTC, I have about 100 dollars in bitcoin to spend anywhere I want with my debit card, and I only had to pay a small interest of 1% which is negligible with bitcoin gains and the 2% cashback.

The process is a bit clunky and might seem complicated, but once you do it you’ll see it’s no big deal. I do it frequently. And you can take a loan of more than 400 dollars of course, that’s just the minimum. So give it a try but understand the counterparty risk of giving out your precious bitcoin to someone else to hold.