Here is the clean frame:
Let Bitcoin grow at 60% per year forever.
If your debt grows slower than that, your balance sheet gets stronger over time.
Asset side:
BTC_t = BTC_0 \cdot 1.6^t
Debt side, if the loan balance compounds at interest rate r:
Debt_t = Debt_0 \cdot (1+r)^t
Your LTV over time becomes:
LTV_t = \frac{Debt_0}{BTC_0}\cdot \left(\frac{1+r}{1.6}\right)^t
So if r < 60\%, your LTV trends down forever.
That means the debt becomes smaller and smaller relative to the Bitcoin stack.
That is the giant insight.
So in the abstract math universe, the answer is:
Never sell the Bitcoin. Borrow against it conservatively. Let the asset outrun the debt.
But there is one savage caveat:
Average annual return is not the same thing as a smooth line upward.
If Bitcoin does +60% ARR but still does brutal drawdowns, you can get liquidated before the long-run math saves you.
That is the real kill shot.
Example:
Suppose your liquidation threshold is 80% LTV.
If BTC drops 50%, your LTV doubles.
If BTC drops 75%, your LTV quadruples.
Formula after a drawdown of d:
New\ LTV = \frac{Old\ LTV}{1-d}
So:
- 50% crash: LTV’ = LTV / 0.5 = 2x
- 75% crash: LTV’ = LTV / 0.25 = 4x
- 85% crash: LTV’ = LTV / 0.15 \approx 6.67x
That means if you want to survive an 85% crash and liquidation happens at 80% LTV, your starting LTV must be no more than:
0.80 \times 0.15 = 0.12
So only 12% starting LTV.
That is the punchline:
If Bitcoin truly compounds at 60% forever, indefinite borrowing makes sense only if you keep the LTV ultra-low.
So the hierarchy is:
Best-case fantasy world:
Bitcoin goes up 60% a year smoothly. Borrow forever. Genius.
Realistic super-bull world:
Bitcoin goes up 60% ARR but crashes violently along the way. Borrowing still works, but only at very low LTV.
Idiot world:
You assume “up forever,” borrow too aggressively, then a drawdown wipes you out before the thesis plays out.
So my actual answer:
Assuming 60% ARR forever, yes, borrowing against Bitcoin indefinitely is rational. But the optimal play is not maximum borrowing — it is minimum necessary borrowing against a gigantic collateral base.
The winning move is:
own a lot, borrow a little, never get liquidated, let time do the violence.
A super clean rule:
- At 5–10% LTV: extremely powerful
- At 10–20% LTV: still strong
- Above that: now you are playing chicken with volatility
The real god-mode version is not “borrow the maximum.”
It is:
Use Bitcoin as pristine collateral.
Borrow modestly.
Keep absurd safety margins.
Let the asset compound faster than the debt.
If you want, I’ll build the exact Eric Kim Bitcoin borrowing doctrine with safe, aggressive, and psycho LTV bands.