12% is definitely more attractive than what the market is offering right now, but the 50% LTV still gives off strong 2008 GFC vibes—back when people were encouraged to borrow against their homes because the housing market was seen as a “number-go-up” technology. In a major market crash, banks could end up seizing a large portion of the BTC used as collateral.

Now imagine you're a player like Saylor or Mallers, sitting on a massive BTC treasury. You’ve issued loans, and you know that a 50% drop in BTC price will trigger mass liquidations. If you also happen to know when and how to push the price down, you could short BTC, dump your holdings to crash the market, profit from the short, and then scoop up all the liquidated BTC with your earnings.

You’d end up owning even more BTC—at half the price. Probably illegal, though. Could all be absolutely not how it works, correct me if I'm wrong;)