Why You Should Never Sell Bitcoin: A 10-Year Data Analysis
At Lendasat, we've witnessed countless success stories from customers who chose to borrow against their Bitcoin instead of selling. But whenever we shared these wins, the response was often the same: "Of course it works now—we're in a bull market."
That skepticism drove us to dig deeper. We analyzed 10 years of historical data from 2015 to 2025 to definitively answer the question: Is borrowing against Bitcoin truly better than selling, or is it just bull market bias?
The results were striking.
The Challenge
Our customers were succeeding with Bitcoin-backed loans, but the narrative was always the same: "Sure, borrowing works now. But what about when Bitcoin crashes?"
We needed to prove—or disprove—this once and for all. Not with anecdotes, but with hard data spanning an entire market cycle, including the 2017-2018 bull run and crash, the 2020-2021 bull market, the 2022 bear market, and the 2023-2024 recovery.
To conduct this analysis, we built a comprehensive calculator that simulates two scenarios across every possible month from January 2015 to October 2024:
Scenario 1: Selling Bitcoin
- User sells Bitcoin to get cash
- Pays capital gains tax (20% long-term rate)
- Holds cash subject to inflation
Scenario 2: Borrowing Against Bitcoin
- User takes a Bitcoin-backed loan at 10% APY for 1 year (standard rate used across all calculations)
- Keeps Bitcoin exposure
- Repays loan with inflation-affected dollars
Our analysis relied on robust, publicly available datasets:
| Data Type | Source | Coverage |
|---|---|---|
| Bitcoin Prices | Historical market data | January 2015 - October 2024 |
| Inflation Rates | World Bank, national statistics bureaus | 8 countries, 2015-2024 |
| Tax Rates | Standard long-term capital gains | 20% (conservative estimate) |
| Interest Rates | Lendasat platform average | 10% APY |
Countries analyzed: USA, Germany, UK, France, Canada, Australia, Japan, Switzerland
The Results
After running 4,720 different scenarios (118 months × 1-year duration × 8 countries × various loan amounts), the data was unequivocal:
Borrowing outperformed selling in 92.4% of all scenarios.
This wasn't just a bull market phenomenon. Even including:
- The 2018 Bitcoin crash (-83% from peak)
- The 2022 bear market (-76% from peak)
- Multiple periods of high inflation
- Various starting price points from $200 to $100,000+
The math is simple but powerful:
- Tax advantage: Borrowing = $0 tax liability, Selling = 20% capital gains tax
- Inflation benefit: Repay loans with depreciated dollars (avg. 2-4% annual inflation)
- Bitcoin appreciation: Even modest appreciation outweighs loan interest costs
- Compound effect: Keeping Bitcoin means benefiting from future price increases
Let's look at a concrete scenario from our data:
Loan taken: January 2020
- Cash needed: $50,000
- Bitcoin price: ~$7,200
- Required collateral: ~6.94 BTC (at 25% LTV)
If you sold Bitcoin:
- Gross proceeds: $50,000
- Tax paid (20%): -$10,000
- Net cash: $40,000
- Bitcoin remaining: 0 BTC
- Inflation loss (1 year): ~$800 purchasing power
Total position after 1 year: $39,200 (inflation-adjusted)
If you borrowed:
- Loan received: $50,000
- Interest paid (10% APY): -$5,000
- Bitcoin retained: 6.94 BTC
- BTC value Jan 2021: ~$242,000 (at $35,000/BTC)
- Loan repayment: -$50,000
Net position: $192,000 (Bitcoin value) + $45,000 (remaining cash) = $237,000
Difference: +$197,800 (497% better outcome)
Why Borrowing Wins
The data revealed several universal truths:
Tax is Your Biggest Enemy - Capital gains tax immediately reduces your position by 15-20%. Borrowing has $0 tax liability.
Inflation is Your Secret Weapon - You borrow $50,000 today but repay it with dollars that have lost 2-4% of purchasing power. The real cost of repayment decreases over time.
Bitcoin's Long-Term Trend - Despite volatility, Bitcoin has appreciated ~100%+ annually over the past decade. Missing out on that growth is costly.
Compound Effects Amplify Returns - Every dollar of Bitcoin you keep working for you compounds over time. Selling breaks this compound effect permanently.
Transparency matters: Borrowing didn't always win. The 7.6% of scenarios where selling outperformed had specific characteristics:
- Extreme short-term crashes: Loans taken at local peaks before >70% drops within the loan term
- Very high interest rates: Scenarios with 15%+ APY in low-inflation periods
- Specific timing: Mainly concentrated in late 2017/early 2018 and late 2021/early 2022
Even in these edge cases, the difference was often marginal (5-15%), whereas when borrowing won, the advantage was typically 200-500%+.
Try It Yourself
We've made our complete calculator publicly available so you can explore the data yourself:
Features:
- Historical data from 2015-2024
- Customize loan amount, duration, and interest rate (default 10% APY used in our analysis)
- Compare across 8 different countries
- See real tax and inflation impacts
- Transparent methodology and sources
Bottom Line
After analyzing a decade of data across thousands of scenarios, the conclusion is clear:
Borrowing against Bitcoin is the mathematically superior choice in 92.4% of historical cases.
This isn't bull market bias. This isn't hopium. This is data.
The combination of:
- Zero tax liability when borrowing
- Inflation working in your favor
- Bitcoin's long-term appreciation
- Compound growth effects
...creates a powerful asymmetry that overwhelmingly favors borrowing over selling.
If you're holding Bitcoin and need liquidity:
✅ Do this: Take a Bitcoin-backed loan
- Keep your Bitcoin working for you
- Pay zero taxes
- Repay with cheaper future dollars
- Maintain upside exposure
❌ Don't do this: Sell your Bitcoin
- Lose 15-20% to taxes immediately
- Give up all future appreciation
- Break compound growth
- Regret it later (probably)
The data doesn't lie. Over a 10-year period, across multiple market cycles, countries, and economic conditions, borrowing has proven to be the superior strategy.
Ready to unlock liquidity without selling your Bitcoin?
Important Note on LTV (Loan-to-Value) Ratios: This analysis did not factor in LTV ratios or liquidation risks, as it was designed to be a purely performance-based comparison between selling and borrowing. In practice, we strongly recommend maintaining a low LTV ratio and keeping sufficient collateral to avoid liquidation. You should always have enough buffer to add more collateral during bear markets to secure your position. Never borrow against your entire Bitcoin stack—only use a portion to maintain a healthy safety margin.
Disclaimer: This analysis is for educational purposes only and should not be considered financial advice. Past performance does not guarantee future results. Always do your own research and consider your personal financial situation before making borrowing decisions.
Data Sources:
- Bitcoin price data: Historical market data (2015-2024)
- Inflation rates: World Bank, national statistics bureaus
- Tax rates: Standard long-term capital gains estimates
- Interest rates: Lendasat platform averages
For questions about our methodology or to access the raw data, reach out on Discord.