Mark Moss explains why loan length matters more than interest rate. Bitcoin loans typically last one year versus the U.S. mortgage's 30 years, and lenders mark them to market daily or weekly, forcing borrowers to cover losses fast when prices drop. Match your liability duration to your asset duration or risk getting liquidated.
Time is money, money is time, right? And so how long is that loan out? The U.S. mortgage loan is one of the best financial instruments in the world. We get 30-year fixed-rate loans. It's amazing. But most Bitcoin loans are typically 1 year. But the problem is that Bitcoin is volatile. So I don't know where the price of that loan will be in 1 year. Now some mark to market that daily or weekly or monthly. Some loans might be only monthly. Some might be yearly. And some of these lenders have no duration. Some of these lenders will let it stay open forever. So I need to understand so I can match my liability to the asset. I need to have duration match.
