Tax Efficiency (Borrow vs. Sell)

When you sell Bitcoin, you typically trigger a taxable event: capital gains tax on any appreciation since you acquired the BTC. Depending on your jurisdiction and holding period, this can be 15-37% of the gain. Borrowing against Bitcoin, by contrast, is generally not a taxable event, because you are not disposing of the asset. You receive cash liquidity while your Bitcoin remains as collateral, and your cost basis is preserved. This strategy is sometimes called 'buy, borrow, die' in traditional finance, where wealthy individuals borrow against appreciated assets to access liquidity without triggering taxes. Note: tax treatment varies by jurisdiction; consult a qualified tax advisor.