It would be even easier than that. Suppose for the sake of simplicity you put your whole million dollars of Bitcoin into Compound. You could then withdraw USD up to the point where you hit the collateralization ratio set by Compound, e.g. if the collateralization ratio is 150%, you could withdraw $666k of USD.
When Bitcoin goes up 1000x, your collateral is now worth a billion dollars, but you have still only borrowed $666k (plus interest). You have way more collateral than you need. So you could just withdraw 99.9% (minus interest) of the collateral, if you wanted. You don’t even have to repay anything to do that.
It would be even easier than that. Suppose for the sake of simplicity you put your whole million dollars of Bitcoin into Compound. You could then withdraw USD up to the point where you hit the collateralization ratio set by Compound, e.g. if the collateralization ratio is 150%, you could withdraw $666k of USD.
When Bitcoin goes up 1000x, your collateral is now worth a billion dollars, but you have still only borrowed $666k (plus interest). You have way more collateral than you need. So you could just withdraw 99.9% (minus interest) of the collateral, if you wanted. You don’t even have to repay anything to do that.