What this week's volatility means for borrowers

Hey Lantern Community,

This week's geopolitical tensions have sent shockwaves through crypto markets, with Bitcoin experiencing significant volatility following US airstrikes on Iranian nuclear facilities.

For borrowers, this volatility serves as a crucial reminder of why proper risk management and understanding your loan metrics matter more than ever.

What we're seeing:

• Broad-based crypto market decline

• Increased correlation with traditional risk assets

• Market sentiment shifting to "wait and watch" mode

• Higher than normal trading volumes

But first market update:

Three Actions Borrowers Should Take Now

1. Review Your Liquidation Thresholds Immediately

During periods of heightened volatility, borrowers need to understand exactly where they stand with their loan positions.

Action Steps:

• Log into your Lantern dashboard and check your current Loan-to-Value (LTV) ratio

• Understand your margin call level (65% LTV) and liquidation level (75% LTV)

• Review how market movements could affect your position

• Example calculation:

  If you borrowed against Bitcoin when it was higher, recent market movements may have changed your LTV ratio

Remember that our conservative LTV ratios are designed specifically to provide substantial cushion during volatile periods like this.

2. Prepare Your Contingency Plan (But Don't Panic)

Having a plan reduces stress and prevents emotional decision-making during volatile periods.

Action Steps:

• Identify additional collateral sources:

  Do you have other crypto assets that could be added if needed?

• Review your liquidity:

  How quickly could you access cash to pay down your loan if necessary?

• Set up alerts:

  Monitor your LTV ratio, but remember you have 3 full days after margin call to respond

• Contact Lantern proactively:

  Our team is available for consultations if you're concerned about your position

Our 3-day grace period after margin call gives you time to make informed decisions, not rushed ones.

3. Consider This an Opportunity (For Qualified Borrowers)

Market volatility often creates the best opportunities for those with proper risk management.

Considerations:

• Dollar-cost averaging:

  If you believe in long-term crypto adoption, volatile periods often present opportunities to add to positions

• Business investments:

  Economic uncertainty sometimes creates acquisition opportunities for businesses with available capital

Risk Management:

• Only consider additional borrowing if your current LTV provides substantial cushion

• Ensure you have adequate reserves for interest payments

• Remember: leverage amplifies both gains and losses

Questions? We're Here to Help

If you have concerns about your current position or want to discuss strategy adjustments, do reply to this email.

Until next time,

The Lantern Team

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results. All investments carry risk, and leveraged positions amplify both potential gains and losses.