[exportedm]

Also in a legal sense. The Celsius user agreement explicitly states that you are giving your coins to Celsius: you have no legal claim to them, you’re relying on the goodwill of Celsius to return them… meaning if Celsius goes under, your collateral is gone.

[remram]

So you're selling your coins for half the USD value, but you have to return the USD at some point anyway?

Why wouldn't you just sell your coins at full value instead of using this "loan"?

[WJW]

Several reasons:

- People hope that the value of the underlying coins will rise in the meantime. (It may, of course, also fall but crypto enthusiasts usually don't worry too much about that)

- Quite often the volume available is not that high for many coins, so if it hovers around (say) USD 100 per coin but you want to sell 10 million coins, you would not be able to get 100*10 million is 1 billion USD for them. The market simply can't absorb that much, but if you use the coins as collateral you won't "sell" them and thus won't impact the market price.

- Selling things of value can have tax implications in certain jurisdictions, which you can avoid by lending against those things instead.

[jeremyjh]

My guess is you want to HODL and let your "assets" appreciate in value, but need liquidity. I can't really imagine why you'd trust any company in the crypto space with long-term storage of your assets.

[gruez]

to not realize capital gains. same reason why jeff bezos doesn't sell his amazon stocks and instead takes out loans on them.

[tluyben2]

I would think this is the main reason. Borrowing is a lot cheaper than cap gains in a lot of countries and it is legal.

[xyzzy123]

Assume you want to HODL crypto forever (you DCA x% of your salary into it) but need to pay for a temporary expense.

You're not selling the coins, you're pawning them.

Also you wouldn't have to pay capital gains tax in countries that require that on crypto sales.

[tim333]

No you are not selling your coins. You are depositing them with Celsius and then borrowing against them.

[LunaSea]

Because the coins might have been obtained in an illegal way.

[randomhodler84]

If they are flagged by chain analytics you ain’t getting the coin back. And you probably get a visit from the authorities. No, the centralized loan provider market is not useful for this.