It's a way of accessing liquidity while holding on to your asset's appreciation and avoiding capital gains tax on it. If you're very long on your crypto holding

It's a way of accessing liquidity while holding on to your asset's appreciation and avoiding capital gains tax on it. If you're very long on your crypto holdings, but you still need money, that's ideal way of accessing it imo. But many people confuse borrowing with lending, companies like blockfi offer you both. If you borrow to get yourself into leverage, you're running risk of liquidation. If you're simply lending it, you can make back 3-7% back interest in your crypto and blockfi and other places will provide that crypto as liquidity to institutions (presumably to short-sell). You can also do it through DeFi protocols, MakerDAO is the most popular, you can see some stats at daistats.com (roughly 3B+$ in collateral and debt). It creates this weird cycle where if the price goes up, you can borrow against your increased collateral value to buy back even more which in turn increases the price further. I suspect there's some things slowing that dynamic at the moment, but it certainly plays some role. And I should also add that this is a fairly common way for wealthy people to access liquidity while keeping their assets, I believe Larry Ellison is one of the famous example of this[1], but now it's democratized for anyone who has cryptocurrencies. 1: https://www.steubencourier.com/article/20140926/BUSINESS/309269980 https://www.steubencourier.com/article/20140926/BUSINESS/309...