Transcription
We have been waiting for this deep for months. And it's finally here. Ethereum, Bitcoin, all down 30-40%. Your favorite altcoins are cheaper than they have been all year. But you cannot move. Because your cash is not yours. It belongs to a credit card at 22% or to a consumer loan or to the financing of something you needed last year. $45 here, $200 every month forever, feeding interest to a bank while the market hands out entries you'll never see again. Or worse. The bill comes due. The cash is short and you sell crypto at the bottom. Right? When you should be buying. And that is the trap. Exposed but unable to act. Holding the bag and forced to lighten it.
Today I'm going to show you the exit. Defy for the refinance. Claude AI to run the analysis and design the plan. A case study for depths. The framework the AI output and I'm going to show you a loan that I have. Here is the math everyone runs. $1,500 on the credit card at 22%. Pay the minimum $45 a month and it takes you 11 years to clear. Total interest paid over $1,300. You paid the debt almost twice. That is textbook version. Painful but textbook.
And here's the version they do not run for you. Those $1,400 in interest are not just lost. They are what you would have deployed when the market gave you an entry. The same $45 a month that has been feeding the bank for the last 2 years. That was our DCA into Bitcoin, into Ethereum during the last cycle. Gone. Not invested, not compounded, burned on 22% revolving credit. And then, there is the worst version of all. The one nobody talks about. You cannot pay the bill that month. Or your reserves are gone. Or you have an emergency, so you sell crypto to cover right at the bottom of a correction. Because that is when life expenses always happen. When the market is down and your portfolio is already bleeding. You do not just pay the bank interest. You sell the asset that will have funded your future at the worst possible price. And this is a trap. Not the debt itself. The way the debt forces decisions you'll never make on your own terms.
The exit is not faster with minimum payments. It is not Dave Ramsey's snowball alone. It is something we have access to in 2026 when the snowball method was written. We can borrow against crypto on chain at 60 to 8% a further what a credit card charges. And the question becomes which debts to attack when that with that tool and which to leave alone. And that is what I'm going to use AI to figure out and how I built the prompt to do it.
Now, first need to look at the framework. The framework is one operation that does three job at once. Job one, replaced expensive unsecured debt with cheaper collateralized DeFi debt. A card at 22% becomes a morpho loan at 7.04. If it's at seven, 15 15 points of spread saved. And this is the obvious one. Job two, preserve exposure to the collateral. The crypto you put up is still yours. It still goes up if the market goes up. It still earns staking yield if you use a liquid staking derivative. No coins sold. The next leg up still counts for you. And job number three. And this is the one that now. You keep cash flow free for the entries the market is heading out. And critically, if the crypto appreciates appreciation itself can amortize the debt. You sell a fraction of the gains, not the original position, and the loan is closed. This is the part that most analysis miss. The collateral is not just sitting there defending the position. It's actively working to pay the debt down. The market does the work that paychecks normally do.
Now, there is a few rules attached in that are on the prompt. I'm not going to go into detail because this prompt is a engineering prompt. This is an engineering engineering art. At least is how I see it. It took me a lot of time to.
Now, we are going to use Colab. You probably already use it for emails, for coding, for writing. Today, we are using it for something most people do not think to use AI for. Analyzing a real-world balance sheet. And so, I'm going to upload four four debt statements. These are case study examples representing the kind of debt many of you are carrying right now. So, with with each one do we start? First, we have a credit card at 20%. We have a consumer loan, a Mac store, a card a credit card from a store, and a pay later from electronics also another debt. Buy in six months statement. So, these is four examples that we have right now. Let's look at the prompt and everything that comes with it. So, I'm not going to go into detail because this is really long. I really took time to prepare this prompt for you. And I but I want you to at least look at the rules. Look at here. The rule defines four perspectives at once. Quant finance, define mechanics, behavioral finance, and capital markets. This is a multi-disciplinary because the right answer lives at the intersection, not in a single domain. And the anti-role is explicit. You are not a financial advisor. This kill the disclaimers that bloat AI output and let the analysis breathe. And then you have a lot of premises, then you have a lot of pads, and contacts, and stages. This prompt will take a lot of time to run. But that's how you get the best results. It's when you have a prompt like this that we are going to run now.
So, what we are going to do right now, and you have the link to this prompt in the description of this video. One thing I needed to alert is that this prompt is already ready for me with all the values that I need to input. So, the prompt that I'm going to give you doesn't have the values. You need to input it yourself because each case is a case, and then you'll see it where you need to to add your debt values, credit cards, etc. Plus attach the Sorry, attach the statements so Claude can do a better analysis. And then you go to Claude. And you go here, you paste the prompt. Now, I'm going to get the four statements here. And I'm going to attach it. And then I'm going to run it. And this will take a lot of time. So, to save time, I'll do like this. And you already have it here. So, look at what it does. Stage one, extracted the values, and you got everything you need. And then you have stage two that is classification. And you can see Nautica Flash Card spread 20 to 24%. It tells you everything. Snowball. And you then you keep rolling and rolling, and you they already think, "I don't want to see this. This is too tiresome for me. I I will never read this. And I respect that. I can't be bothered reading this stuff also. And I respect that's why I created another prompt. And this is why if you go to the link below, you'll see a second prompt that is called the visual prompt. Um let me just show you. I want to show the visual prompt. It says here, visual prompt. You got it here. With this visual prompt, what you are going to get is really easy. I already run it. You come here and look at this. This is what you get. Much more easier to read, right? So, what we have here, refinance the 1,500 Nordic Flex card via Morpheus on base. And why is it only talking about this one? Because if you go to here to the prompt, you're going to have a reason why the other debts are not suitable for DeFi. This is how deep this prompt goes. It tells you everything. It tells you what you should do and what you should not do.
Now, it identified the Nordic Flex card. So, we are going to refinance 1,500 of a Nordic Flex card via Morpheus on base. All CB BTC as collateral. Also, the prompt takes into consideration Bitcoin and Ethereum for collateral and takes the historical analysis and where we are right now and where we were to recommend the a collateral. It's just for you to understand this. And why am I focused on CB BTC or in this case Bitcoin or Ethereum? Because are the ones that had the least chance of having a 50% drawdown from where they are today. Always remember where we are. If when you are watching this video, we are at the top of a bull market, you don't do any of this, you wait for a correction. As I was saying, Bitcoin as a collateral service the borrower cash from cash flow with collateral appreciation as a second exit and tells you why. Crypto exposure of $3,000 stays exchange stays unchanged, sorry. The Nordic APR drops from 24 to 7% actually 2 to 4 on Morpher cutting cash interest by roughly $150 over 12 months. Free cash flow accumulating stable month by month and closes the borrow at month 12. The collateral is never touched unless the operator choose to lock gains. So, basically what he's telling you is that you are going to drop from 24 to 7% and gives you a plan to of payment.
Now, this is the position. $3,000 on Bitcoin CB Bitcoin it's the wrapped Bitcoin. You borrow $1,000. Your LTV is 50% and your liquidation point it's 1,000 1,744. This is the collateral drop. And this means that Bitcoin needs to drop 41.9% for you to be liquidated on this loan. So, let's see. 41.9% we are talking about more or less here. Bitcoin needs to go to 44. Let's say 45%. And then you ask, "What if we go there? What if indeed we go there?" It's easy. Every Everything ready for you. You have a reserve. You are going to keep $450 for this case, this study of we are where this is liquid enough position. If Bitcoin drops 43% and you deploy this who this reserve your borrow drops to 1,000 $50 and the new liquidation moves to roughly 59%. So, this will move to $1,000 $1,050. This means that Bitcoin needs to drop to 59% from where it is today. And we're going to check where is 59% and that means it's around 20 31K. So, that you'll be liquidated. So, you have everything planned here. Everything. And then it even has the exit bets. You have 25% chance that bit the Bitcoin appreciates 50% or more and you close from accumulated stables to preserve full crypto or sell for $1,600 of gains to lock in. Operator's choice. Then you have a 45%. This is based where we are today and the historical analysis of Bitcoin and flat to a plus 50%. Cash flow accumulating stables across 5 to 12 months. Clove close more full at month 12 from the saved balance. And then you have 25% chance of Bitcoin drawdown up to 25%. No triggers. Continue accumulation stables. Close from saved balance. 3% of 25 to 42. You deploy a reserve. And 2% CBBTC breaks past 42 and you get liquidated. The collateral is the collateral of 1,500 is seized. But you really need to understand this. If you get liquidated, you lose 1,500 not the 3,000. Because you borrowed against you withdraw 1,500. It has everything here.
So, this is the prompt that I built for you. This is the prompt that you can use and this is the prompt you can have access. There are a few key rules here, okay? You never do this. You never do this at the top of a market. You only do this at corrections and when you believe that the market lows are in or close to be in. That's why you have the reserve in case we dip a little bit further. And you know we are going to reverse. Everyone who did a loan with Bitcoin at 126, right now they are either liquidated or sweating. And I don't want you to be liquidated and I don't want you to sweat. I want you to have a calm night and sleep well. But this is what I did. This was exactly what I did with my loans. From investments. From real estate. If I want to do a a frugal buy, I do a loan right now. That's my discipline. I will show you what I did yesterday.
So, yesterday I wanted to buy something frugal, something that I didn't need it. So, for my frugal buy of yesterday, I did this. I went to Morpho. You can now use other protocols. I went to Morpho and I went to markets. And I went to the market WETH from USDC. I know we have a lot of fud, I still think Ethereum is going to perform well and it's the chance of a drawdown it's not that higher. You can do it with Bitcoin. Now you can see that the total market size here is 200 million, total liquidity 155, the rate is 4.7, not 7%. This is all it's changing. And then I go here to the dashboard and I have my position. So, I have a collateral of $572 and I loan 284. This is a 50% collateral and I have all the info here. Look. If I go here, I can know that my liquidation price is 1,200. So, Ethereum needs to go to 1,234 so that I get liquidated. It's a drop of 42% and I'm using uh my and my LTV is 50%. So, and I could use more if I want to. So, I am more than okay with this. This was a frugal buy and again, this is an awesome dashboard. And I'm going to share you this as a tip. Usually when I start a new loan, I use a new wallet. So, 2 days ago, I decided to do a test loan, $9, and see if I was on the right platform, if my wallet was not compromised, and everything. When I saw everything was okay, then I proceed to do a higher loan. Again, I borrowed 270 276 um USDC against a collateral. It was higher yesterday, I think it was 580. Whatever, it doesn't matter. It's fluctuating with the price of Ethereum. And this is what I did. And then, I sent it to Cash. And I used it. It's easy as this. It arrived in seconds, and I used it. I spent it on a frugal buy. I could have not done this, but my discipline here told me, "If it's frugal right now, you need to have a collateral, and use DeFi for that. I'm paying 4%. That's nothing." And something that I do a lot of times right now, is at the end of each month, I sum all my expenses, and I do this with Bitcoin or Ethereum. With alts right now, I still think it's risky, but there will come a time that I I've done it with CRV, and I when the upside was like 5x, I use so I was so little I use so little CRV to pay the loan that that was one of one of the best loans I ever did. But this is something that I use. And what I did today was telling you, "Look, you have if you have debt that's impacting your daily finances, it's allowing you to buy the dip or sell crypto at the bottom to pay those debts, try to do this. Make this effort. It's better to have Ethereum as a collateral, Bitcoin as a collateral, than to sell your favorite altcoin to pay credit card debt. You are going to sell it anyway. Sell it to Bitcoin. Do a loan, 50% LTV, run the prompt. It will tell if it's worth it or not. Look at what you learned today. That you can change uncollateralized debt by collateralized debt way cheaper. You can use AI to analyze your finances, draw you a plan, explain you why, choose your collateral, and then you can go and execute. And this is crypto. And this is a good use of AI. And this is crypto decoded. I'll see you on the next one.