2 ways to spend and live on your crypto assets without selling them

You’ve always been told never to sell your crypto, and to HODL for those 10x and 1000x gains. But unfortunately, our real-life bills aren’t that patient.

So every and then, you find yourself in a situation that warrants drawing from your crypto holdings to pay bills.

How can you “HODL forever” to enjoy the predictable massive gains in the long term and take care of your immediate bills at the same time without selling your crypto assets too early?

That’s what this post is all about.

In this post, I would be sharing with you the 2 strategies that I use to spend or live on my crypto assets without selling them.

2 ways to spend your crypto without selling it

There’re two simple ways you can spend your crypto assets without selling. These are:

  1. Take a loan on your crypto assets 
  2. Invest your crypto assets and spend only the returns

Let’s discuss each of them below.

1. Take a loan on your crypto assets

Saylor has $1,000 worth of Bitcoin (BTC) which he is HODLing and hoping that one day, it would be worth something more significant.

As we all know, life happens, and a few months down the line, Saylor needs $200 to settle some important and urgent life bills.

So he decided to draw $200 from his $1000 BTC portfolio and sell it for cash.

But because he’s hopeful that the price of Bitcoin will only go up with time, he wants to hold on to his $1000 BTC and still satisfy his immediate need for cash.

To him, selling Bitcoin for fiat to pay off temporary bills is like selling a piece of land for a car.

The best thing for Saylor to do in order to eat his cake and still get to keep it is to use his $1000 BTC as collateral to get a $200 loan from a crypto lending and borrowing platform.

1.1 How does crypto loans work?

There’re dozens of trusted and reliable centralized and decentralized crypto lending and borrowing platforms, where you can take out instant crypto loans.

Prominent among them are Nexo, BlockFi, Crypto.com, Venus, Celsius Network, Compound Finance, Aave, Anchor Protocol, etc.

These platforms require you to deposit your crypto assets as collateral for a loan. The amount of loan you can collect depends on the value of the crypto assets you deposit as collateral.

Different platforms calculate how much loan you can get different but it ranges from 40% to 90% of the total dollar value of the crypto assets you deposited. This is called the loan-to-value (LTV) ratio.

For example, if you deposit $100 worth of supported crypto asset(s) as collateral, you can get between $40 to $90 loan depending on the platform and the coins involved. And you’ll be charged a small interest of 1% APR to 9 APR, depending on the platform.

You can request that the loan amount be credited into your local bank account (if you’re using a centralized crypto lending platform) or issued to you as a stablecoin or any other cryptocurrency the platform supports.

Crypto loans come with zero repayment pressure as you can choose to repay them anytime you like. You can also choose to repay the loan in as many instalments as your budget permits.

However, because the price of cryptocurrencies is extremely volatile, the value of your collateral could easily go down during the loan period and you will have to repay the loan early or increase your collateral by depositing more funds to avoid liquidations.

And because you deposited crypto assets in excess of the amount you borrowed, the lending platform loses nothing if you refuse or can’t afford to pay back the loan, as they can always liquidate your collateral to recover the loan amount plus any accrued interest.

You must not let that happen, otherwise, this strategy would become ineffective, as our goal is to NOT have to sell your original crypto assets in the first place.

1.2 What’s the risk of using your crypto assets as collateral for a loan?

Taking a loan against your crypto assets is a brilliant idea but there are downsides to it.

These risks include:

  • volatility
  • Hacks
  • Scam

Let’s discuss each of them below…

  • 1. Volatility

The major risk of using your crypto assets as collateral to take out a loan is that your LTV ratio may drop below an acceptable level, and your collateral would be liquidated to offset the loan.

To avoid getting liquidated, you will be requested to top up your collateral to maintain an acceptable LTV ratio.

For example, let’s say you deposited $100 worth of a crypto asset (say BTC) as collateral with a 70% LTV ratio. The maximum loan amount you can take is $70.

If you take out a $70 loan on your $100 collateral with a 70% LTV ratio,  you will be partially liquidated immediately the value of your collateral (BTC) drops to even $99 in order to bring the LTV ratio back to 70%.

At any point in time, the amount you borrowed ($60) must not be worth more than 70% of the current value of your collateral. Otherwise, the lending platform will sell the BTC you deposited to correct the imbalance.

So you will have to either (partially) repay the loan or add more collateral to maintain a healthy LTV ratio.

  • 2. Hack

Another risk is that the crypto lending platform or protocol you’re using could be hacked and you lose your collateral with very little to zero hope of being reimbursed.

Though some centralized lending platforms claim to have some form of insurance cover for deposits on their platforms, there’re no guarantees you will be reimbursed 100% if their wallet ever gets drained by hackers.

  • 3. Scam

The developers or founders of the crypto lending platform could disappear into thin air once they accumulate enough funds from unsuspecting investors.

And that’s why you should only use reliable and trusted crypto lending platforms with known faces or names behind them.

If it’s a centralized platform, the team should be known and traceable. An anonymous team running a centralized lending platform is a huge risk.

And if it’s a decentralized platform, the team may be anonymous, but verify that their code is open source, audited, and the protocol is run based on community governance.

This reduces the risk to some extent by ensuring that there’s no intentional vulnerability in the code that could enable the developers to rug pull (scam) investors.

2. Invest your crypto assets and spend only the returns

The second way to spend your crypto without selling it is to invest and live off of the returns.

There are various ways you can put your crypto (money) to work and eat the babies it produces. These include:

  • Lending your crypto assets
  • Staking your crypto assets
  • Yield-farming with your crypto assets

Let’s briefly touch on each of them below.

2.1 Lending your crypto assets

Look for reliable crypto lending platforms with a reasonable APY for the coins your HODL and lend your crypto assets to earn interest on them.

Click here to compare different lending rates for popular coins across multiple platforms.

If you have a sizeable portfolio, you could be able to live off of the interest you earn while letting your coins appreciate in value with time.

Some lending platforms offer really juicy APYs, between 10% to 100% or even more depending on the coins.

You just need to look around for the best risk vs reward combination that works for you and plug in your investment there.

2.2 Staking your crypto assets

Most cryptocurrencies now can be staked either in one of the popular staking wallets, on their website, or other protocols and platforms to earn rewards.

Find one or more cryptocurrencies that you would love to HODL long term,  stake them, and live off of the rewards while waiting for their price to appreciate.

2.3 Yield-farming with your crypto assets

One of the most lucrative things you can do with your crypto assets is yield farming. It’s literarily a money printer if you find the right farms.

Here’s how it works, you can provide liquidity into a pool on a DEX, and stake your liquidity provider (LP) token on the same or different platform to earn another token.

This way, you’re earning from 3 different sources on the same investment:

  1. A share of all fees generated in the liquidity pool you invested in. That is the liquidity mining reward.
  2. You’re also earning more of the same or a different token of another project by staking your LP token.
  3. The price of your coins appreciate with time and if you top it up with auto-compounding, you’ll be on another level entirely.

To live off of the returns on your crypto assets, you have to have a significant portfolio size for it to be practical.

If your annual living expenses is $100,000, and you can earn a stable 20% APY for example, you need to have a portfolio of $500,000 or more.


It’s possible to spend your crypto assets without selling by using them as collateral to get a loan, or investing and living off the returns if you have a sizeable portfolio.

What other ways do you use to avoid selling your crypto while equally using it to pay the bills?

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