What is Crypto.com Credit?  Build Wealth Like the Rich |  by Col Jung

What is Crypto.com Credit? Build Wealth Like the Rich | by Col Jung

Learn to Leverage Debt & Change Your Life

Which category do you fit in?

do you hate debt† Most people do.

That’s also why most people never become wealthy.

As it turns out, the advantageous use of debt is a hallmark of the super rich. There’s even a catchphrase for it — Buy, Borrow, Die — that was the subject of a recent Wall Street Journal article.

Rather than relying on loans because they have to, the rich use debt as a strategy to build their wealth over a lifetime. you can too.

How the rich strategically use debt to grow their wealth

The sooner one shakes off the psychological disdain for borrowing and debt, the sooner one can reach true financial freedom — but you must know when to borrow and how to use the debt

In short, the goal is to borrow against your assets at strategic times in the market, allowing you to grow your wealth while minimizing tax obligations. It’s a life changer.

This is how savvy real estate investors amass a massive portfolio of properties.

In cryptocurrencies, a number of reputable companies have popped up in recent years — Crypto.com, BlockFi, Celsius, Nexo — that allow you to take loans against the crypto in your wallet.

On Crypto.com, it’s called Crypto Credit

Sign up to Crypto.com here (referral code ‘col and get $25 worth of free CRO when you apply for a Ruby Steel card or above. Get up to 8% cashback on daily shopping + free SpotifyNetflixAmazon Prime, airport lounge access and more! More details here.

In this article, I’m going to:

  • Dive into growing your wealth like the super rich. don’t sell, borrow
  • Explain how to do it on Crypto.com;
  • Discuss my personal strategy

Many investors fear debt, and they probably should. Without knowing how to use it properly, you’ll lose money even quicker.

For instance, the majority of traders lose money† how? They jump into rallies, buying at times of peak greed, then panic sell. The classic formula for buying high and selling low. Whoops!

Trade margin and you’ll liquidate your account even faster.

Newbie traders FOMO into rallies at sky-high prices then panic sell

In contrast, experienced investors have conquered their emotional self and have learned how to execute a strategy over and over. This is when the markets have become profitable. Statistically, you buy low and sell high more than the other way round.

Experienced investors buy at times of peak fear

Smart money and the wealthy take this further by eliminating the selling as much as they can, thereby steadily growing their wealth and minimizing taxes

Instead of selling your position to lock in a profit, which also locks in a capital gains taxthe savvy investor borrows against their investment to grow their portfolio.

In the crypto market, they’ll take out loans during times of peak fear, borrowing stablecoins to buy bitcoin, ethereum and other cryptocurrencies. Such loans are particularly attractive in our current low-interest rate environment.

Crucially, no part of their initial investment is sold, thus there are no realized gains there to be taxed.

On Crypto.com, you can get an instant loan against assets in your Crypto Wallet. This feature is called Crypto Credit

Again, sign up here (referral code ‘col‘) and get $25 for free when you apply for a Crypto.com Ruby Visa card or above

Moreover, see this article for an explanation of different types of wallets on Crypto.com: Crypto, Earn, Credit and Fiat.

There is no time limit to pay your debt — no bank to bug you — all you need to do is pay your loan interest and watch your market risk† More on this later.

You have 4 types of wallets on Crypto.com: Crypto, Earn, Credit and Fiat.

Step 1: Borrow

nominate some chosen assets in your Crypto Wallet to serve as the collateral for your loan.

For instance, suppose I have 0.1 ETH (worth $290 at the time of writing) in there.

Putting down 0.1 ETH as collateral to borrow some USDT.

I’ll nominate the full amount as collateral, and can then borrow half the value of this collateral.

For example, I can borrow $145 worth of USDT, BTC, ETH, CRO etcetera.

The key is to borrow stable assets to buy more risk assets. Thus let’s borrow $145 worth of USDT stablecoin.

My 0.1 ETH is now in the Crypto Credit Wallet (where all my collateral sits) while my 0.05 ETH worth of USDT now appear in the Crypto Wallet† great!

Step 2: Buy

Let’s use my borrowed USDT to buy more crypto.

The USDT I borrowed now appears in my Crypto wallet. The 0.1 ETH collateral sits in the Credit wallet.

Suppose I use the USDT to buy more ETH. I can afford 0.05 ETH.

In essence, I used my 0.1 ETH collateral to buy another 0.05 ETHthereby growing my portfolio.

Step 3: HODL

I now wait for the value of ETH to rise. My principal (0.1 ETH) sits locked-up in my Crypto Credit Wallet in the meantime. This provides an extra benefit against “itchy fingers” — the terrible tendency to overtrade.

Step 4: Sell & Profit

Suppose after 12 months, the value of ETH roughly triples.

I then pay off my stablecoin loan with a third of the borrowed 0.05 ETH (plus some interest), pocketing an extra 0.1 ETH in profit.

In other words, I’ve doubled my ETH bag without ever touching my initial investment. No realized gains on my principal and thus no taxes on it. wonderful!

Rinse and repeat, and see your portfolio grow over time through the power of strategic debt.

The key to debt in the financial markets is risk management

You need to borrow at the right times so you stay far away from your loan’s liquidation price. Thus the key is to take out loans at times of extreme market fear† This is when there is the highest probability of a sustained price reversal.

The reason why the majority of margin traders lose money is because they take on debt at the worst times — especially times of high market greed.

If you took out a 10:1 margin trade to buy more BTC at the all-time high of $69k, you’d get liquidated at $62k. Whoops. This happened to a lot of traders. If you took out a ‘lightly leveraged’ 2:1 HODL position, you’d survive a dump down to $34,500. I imagine you’d be pretty nervous these days.

Only take on debt when market conditions are right.

Don’t borrow during times of market greed, as much as the feeling of FOMO compels you. Don’t become another liquidation statistic.

As for my personal strategy on Crypto.com, the key is to leverage Crypto.com’s massive ecosystem for synergistic benefit.

I’ll give you an idealized yet illustrative example.

Wait for the market to dive into peak fear. For instance, when BTC dumps 50% off all-time highs. Collateralize some crypto in your Crypto Wallet to borrow some stablecoins and buy more BTC. Or altcoins if you have a higher risk profile.

While waiting for prices to appreciate, save your borrowed crypto in your Crypto Earn Wallet and earn a regular interest.

Crypto.com’s BTC reward rates for their “Crypto Earn” interest account. Details in this article

As you can see, there is a synergistic benefit between Crypto Earn and Crypto Credit

Crypto Credit (taking out loans) provides you with precious capital, while Crypto Earn allows you to grow that capital — even while prices trade sideways. Brilliant.

Ready to take the plunge into the Crypto.com ecosystem?

Sign up to Crypto.com here to get $25 worth of free CRO when you apply for a Ruby Steel card or above. Get up to 8% cashback on daily shopping + free SpotifyNetflixAmazon Prime, airport lounge access and more! More info here.

In summary, don’t be scared of debt.

Using debt strategically is a tried-and-true method the super rich use to grow insane amounts of wealth.

Have a great day.

follow me on YouTube and Twitter for regular crypto analysis and guides.

Join here with my referral link. I will earn a small commission with no extra cost to you. Thanks for your support.

Get a permanent fee discount on the biggest exchanges:

  • FTX† get 5% off trading fees (link)
  • Binance† get 5% off trading fees (link)

Sign up below for a free deposit bonus:

  • Nexo† get $25 free BTC with $100 deposit (link)
  • Celsius† get $50 free BTC with $400 deposit (link)

always wanted a Crypto.com Metal VISA debit card

Which card is right for you?

Get up to 8% cashbacks on daily shopping + free SpotifyNetflixAmazon Primeairport lounge access and more!

Register here and get $25 worth of CRO for free.

  1. Use referral code ‘col
  2. Complete registration & KYC on App
  3. In App, apply for a Ruby Steel card or above
  4. Buy and stake $400+ worth of CRO as required

Your shiny new Metal VISA card will arrive in the mail! woohoo.

and $25 worth of CRO is now instantly unlocked in your Crypto.com App.

Staking CRO provides a host of benefits, such as earning you 8.5% interest on BTC & ETH holdings and 14% on USDC stablecoins!

  • Basics: Total Market Guide, Why Bitcoin
  • Math: Power of Compound Interest
  • Passive Income: Total Crypto Passive Income Guide
  • Strike: PancakeSwap, Strike ADA, Terra’s Anchor Protocol
  • Price Predictions: How to Predict Crypto Prices, Top Price Prediction Mistakes
  • altcoins: Cardano (ADA), Avalanche (AVAX), Solana (SOL)
  • memecoins: Shiba Inu (SHIB), Memecoin Strategies
  • crypto.com: App, Buy & Sell, Earn, Loans, Metal VISA Cards, Ecosystem
  • ICO/IDO/IEOs: TrustSwap, FTX #1

Thanks for reading!

This article contains sponsored referral links.

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