Why would Loki be a villain when the mugiwaras are on good terms with the giants?
2) Was about to betray the giants by marrying Charlotte Linlin's daughter and forming an alliance with her.
3) He's the prince of Elbaf, therefore its future (if not current) ruler. Hajrudin's dream is to become the king of giants, so Loki directly antagonizes the dream of one of the good guys.