An increasing number of ultra-wealthy individuals are enjoying luxury through crypto-backed loans. The ultra-wealthy who built their fortunes from cryptocurrency are using crypto-backed loans to purchase luxuries such as yacht upgrades and Cannes Film Festival trips. Unlike traditional finance, where loans are typically secured by real estate or stocks, crypto billionaires are borrowing cryptocurrency as collateral through DeFi platforms to fund a luxurious lifestyle.
DeFi platforms differentiate themselves with speed and anonymity. For example, borrowing against Bitcoin can provide funds in seconds, without credit checks or tax reporting. Yet price volatility means collateral values can fall sharply, triggering automatic liquidations.
For instance, one investor holding about $10 million in real estate in Switzerland and Miami could use crypto assets to fund a St. Moritz ski trip, a Cannes Film Festival visit, and a yacht upgrade. Crypto-backed loans are seen as a ‘cheat code’ for the ultra-wealthy, allowing luxurious living with fewer tax concerns and simpler procedures. Industry observers say this new funding method is reshaping patterns of wealth enjoyment by bypassing traditional financial norms.
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