Mezo firmly believes that finance should be an inalienable right, like privacy and freedom of speech. Everyday investors should be able to utilize the same financial strategies that have historically built wealth for select elites.

High-net-worth individuals (HNIs) have long understood the advantage of borrowing against their stock portfolios, maintaining their asset positions while simultaneously unlocking tax-free liquidity to reinvest, start businesses, or fund real estate purchases. This powerful wealth-building technique, however, has traditionally been limited by market volatility, margin calls, and accessibility barriers.

Today, Bitcoin significantly enhances these dynamics by providing a permissionless, decentralized, and globally accessible asset class that allows anyone to leverage their holdings efficiently and truly democratizes access to wealth creation.

Why Borrow?

The rationale for borrowing against Bitcoin rather than selling it begins with understanding Bitcoin's historical performance as an asset class. Despite its volatility, Bitcoin has delivered exceptional long-term returns that make the prospect of selling potentially devastating to wealth accumulation: Bitcoin has demonstrated an impressive ROI of +31,373% over the past decade, outperforming virtually every other asset class. While past performance doesn't guarantee future results, this growth proves why maintaining Bitcoin exposure over the long term is critical for wealth creation and preservation.

Selling Bitcoin is an opportunity cost that, historically, has been far too costly to ignore.

Asset-Backed Lending

For decades, investors have leveraged real estate through mortgages, stocks through margin accounts, and even fine art through specialized lending programs. These strategies all share a common philosophy: why sell an appreciating asset if you can borrow against it instead?

Traditional wealth management professionals have long recommended securities-backed lending as a wealth preservation strategy. Selling appreciated securities can trigger capital gains taxes of up to 20% at the federal level alone.

The practice of using assets as collateral for loans stretches back centuries, but the modern era of securities-based lending began in earnest during the early 20th century. In the 1920s, as stock market participation grew among American households, institutions began offering loans collateralized by stock portfolios. This period marked the beginning of democratized access to leveraged financial strategies previously available only to the ultra-wealthy and business magnates. However, the stock market crash of 1929 and the subsequent Great Depression led to the establishment of Regulation T by the Federal Reserve in 1934. This regulation limited margin lending to 50% of a security's value, curtailing much of the general public’s ability to put their assets to use.

By the 1970s and 1980s, as wealth management became more formalized, borrowing against equity portfolios became a cornerstone strategy for the financial elite. Private banks and wealth management divisions offered specialized credit lines secured by diversified stock portfolios, allowing wealthy clients to access capital without liquidating their positions or triggering tax events. This approach created a powerful wealth-building dynamic: assets remained invested and growing while the borrowed capital could be deployed for other opportunities.

The dot-com boom and early 2000s further streamlined securities-based lending. Brokerage firms integrated lending services directly into investment accounts, creating margin loans and portfolio lines of credit that could be accessed with the click of a button. However, these tools remained primarily available to investors with substantial assets—typically requiring minimum portfolio values of $100,000 to $250,000, if you’re lucky.

The Bitcoin Parallel

Bitcoin creates a similar opportunity to what stocks provided a century ago. However, unlike traditional securities, which require substantial minimums and often accredited investor status, Bitcoin can be acquired by anyone with an internet connection in amounts as small as a few dollars.

Securities-based lending was never fully democratized despite decades of regulatory and technological advances, as traditional financial systems maintained barriers through minimum asset requirements, credit checks, and complex documentation. Bitcoin eliminates these barriers.

With Bitcoin as collateral, lenders no longer need to evaluate credit history or income stability beyond verifiable crypto holdings. The blockchain provides transparent proof of ownership and value, streamlining the underwriting process to a degree impossible with traditional assets.

Consider a small business owner who accumulated Bitcoin over several years. Traditional banks might deny business expansion loans based on limited operating history, regardless of their BTC holdings. With Bitcoin-backed lending, those same assets become the basis for accessing growth capital without complex loan applications, not to mention the significant savings thanks to reduced loan costs.

A Case Study

Consider Bob, a skilled freelance web developer living in Colombia. At 29 years old, Bob had accumulated 0.7 Bitcoin (worth approximately $58,000) through diligent savings. When he found an attractive opportunity—a small apartment building priced at $80,000—Bob approached several local banks for financing. Despite his steady income and excellent financial track record, each bank denied his request:

→ The first bank declined due to his lack of formal credit history.

→ The second required a hefty down payment Bob couldn’t afford without selling his Bitcoin.

→ The third rejected his freelance income, citing insufficient formal documentation.

Traditionally, Bob’s journey would end here. However, suppose Bob discovered a Bitcoin-backed lending platform. Rather than evaluating traditional credit metrics, this platform assessed his verifiable Bitcoin holdings. Within 48 hours, Bob secured a $40,000 loan against his Bitcoin holdings at a competitive interest rate, aiding him in completing his apartment building purchase.

Over the next two years:

• Bob’s apartment building appreciated by 15%, increasing his real estate equity by approximately $12,000.
• His remaining Bitcoin holdings appreciated significantly as well.
• The rental income from his property comfortably covered his loan payments as well as the appreciation of his BTC collateral, allowing Bob to gradually repay the loan without liquidating his assets.

Had Bob sold his Bitcoin, he would have missed out on substantial appreciation. Instead, borrowing against his Bitcoin allowed him to build real estate and Bitcoin wealth simultaneously.

Try Bitcoin-backed Borrowing with Mezo

Bob’s story exemplifies Mezo’s core mission. By developing a circular Bitcoin economy platform, Mezo will be able to provide these financial opportunities to anyone with Bitcoin holdings, regardless of their location, traditional credit history, or banking relationships.

Experience the power of borrowing against your Bitcoin firsthand with Mezo's MUSD. Currently available on testnet, MUSD allows you to borrow against your Bitcoin holdings with fixed, competitive interest rates starting as low as 1%. Enjoy permissionless access, verifiable onchain collateral management, and secure, predictable borrowing terms.

The road to banking on yourself starts with borrowing on Mezo.

👉 Start Today:

• 🏦 Deposit on Testnet
• 📚 Read the Docs
• 👾 Join the Discord

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