Bitcoin is still early

[CordMcNally]

Edit: Here's a great article for anyone asking "How can these platforms consistently give such high yield?" Short answer: it's in their marketing budget, but also they are able to lend them out at even higher rates. Interest rate arbitrage, just like any conventional brick and mortar bank (sans the brick and mortar).

https://www.theblockcrypto.com/post/...ollow-the-flow

That they are lending them out at even higher rates makes me even more skeptical, honestly.

[jacoavlu]

I tried to stay away...But a message offline brought me back. Probably the dopamine hit I got from it. Anyways, I wanted to comment on Jacoavlu's comments. If you go back to my original post in May of 2020, Jaco was one of my biggest "critics"/questioner's when I started the initial thread. It makes me happy that he/she did some further reading. The questions you are asking are great questions. I don't have a crystal ball as to where/how this ends. But I still strongly believe that the risk/reward aspect to holding a percentage of your portfolio in BTC is a very good idea. I would again encourage any of you that are still close minded on the topic to open your minds and do some studying.

my apologies for being a hater.

[Lordosis]

Yields of >2% should be highly scrutinized.

Yields of >8% should be laughed at and avoided for the obvious scam it is.

[xraygoggles]

Yields of >2% should be highly scrutinized.

Yields of >8% should be laughed at and avoided for the obvious scam it is.

Did you read the article?

[xraygoggles]

That they are lending them out at even higher rates makes me even more skeptical, honestly.

Skepticism is good. I said no free lunch.

[jacoavlu]

Yields of >2% should be highly scrutinized.

Yields of >8% should be laughed at and avoided for the obvious scam it is.

why ?

why do you think interest rates are currently very very low ?

[Lordosis]

High reward means high risk. 8% yield is a great reward. What is the risk? I do not see it out in plain sight. I would stay away. But if you proceed I would suggest being very careful.

Maybe I am too skeptical. Maybe not...

[Jaqen Haghar MD]

equities were low then too. Are we advocating people to hoard cash and wait for the market to go back down?

how does that go, is it "time in the market" ?

No. We were talking about a company sitting on billions of dollars for a while, and their long term strategy to acquire Bitcoin. I just found it odd that they lumped in after a big run up during a peak news cycle, and not during other times. It seems very impulsive. Though the fact that they moved in, caused others to pour in afterward.

Bitcoin is not “the market”. It’s a single speculative entity.

Either way, it will be interesting going forward, given the nature of its volatility.
People are very bullish on everything these days.

[jacoavlu]

High reward means high risk. 8% yield is a great reward. What is the risk? I do not see it out in plain sight. I would stay away. But if you proceed I would suggest being very careful.

Maybe I am too skeptical. Maybe not...

Go back to your base assumption.

part of the problem is, we think these super low interest rates, basically zero yield on deposit accounts, is somehow normal and that to earn any meaningful yield on your money is just something that doesn't happen. Perhaps ask yourself why that is

[jacoavlu]

No. We were talking about a company sitting on billions of dollars for a while, and their long term strategy to acquire Bitcoin. I just found it odd that they lumped in after a big run up during a peak news cycle, and not during other times. It seems very impulsive. Though the fact that they moved in, caused others to pour in afterward.

Bitcoin is not “the market”. It’s a single speculative entity.

Either way, it will be interesting going forward, given the nature of its volatility.
People are very bullish on everything these days.

I'm sure Saylor wishes he had a time machine. Musk too. Me too. Probably you as well

Better late than never

Do you think this game ends with Tesla?

Oh and you can easily go out and find like 100 hours of Saylor providing all this thoughts and analysis in a very open manner.

[Lordosis]

Go back to your base assumption.

part of the problem is, we think these super low interest rates, basically zero yield on deposit accounts, is somehow normal and that to earn any meaningful yield on your money is just something that doesn't happen. Perhaps ask yourself why that is

Banks figured out that they do not need to offer yield and they will still get business. Cash is for liquidy and I need that and so do a lot of people and businesses. Banks offer that liquidy in an as absolutely as safe as possible way.

[Jaqen Haghar MD]

I'm sure Saylor wishes he had a time machine. Musk too. Me too. Probably you as well

Better late than never

Do you think this game ends with Tesla?

Oh and you can easily go out and find like 100 hours of Saylor providing all this thoughts and analysis in a very open manner.

I don’t have much FOMO at this point in the game. I do remember the emotional aspects of trading from 2000 and 2008. You can feel it in the conversations and through the screen.

I think it’s fun and interesting to watch this run up. I think it’s a bit of a pivotal moment. If this flops for Tesla, it will give Bitcoin a black eye, if it’s a smashing success, others will follow. Risk and reward are intimately connected.

[jacoavlu]

Banks figured out that they do not need to offer yield and they will still get business. Cash is for liquidy and I need that and so do a lot of people and businesses. Banks offer that liquidy in an as absolutely as safe as possible way.

so then, does it have to follow that interest rates in some alternative environment, have to align with what you're used to in the traditional banking system? And that an 8% interest rate on a deposit account must be a scam? These companies aren't in business to lose money

[Lordosis]

No they will not be in it to lose money. As long as money is coming in they can pay out that 8%. The question is when the money stops coming in do they cut you down to .1-1% or do they use principal to continue to pay you and then people come to learn there is no money left. The money must come from somewhere.

I am no expert in economics but I do not think you need to be for this to fail the sniff test.

[Panscan]

so then, does it have to follow that interest rates in some alternative environment, have to align with what you're used to in the traditional banking system? And that an 8% interest rate on a deposit account must be a scam? These companies aren't in business to lose money

Couldn’t you say that about any pyramid scheme which guarantees an x payout. Well ya they aren’t in the business of losing money until the scheme implodes.

the banks are regulated with how aggressive they can be with their money, which I’m going to assume is many levels higher of regulation than these crypto things are. If the banks were confident they could make 20% reasonably safely I bet they would be doing interest rate arbitrage as well to get access to as much money as they can.

obviously these entities have to be doing something pretty aggressive to “guarantee “ 8% “interest .” I put these things in quotes because It seems silly to assume they mean the same thing from these entities as they do from a fdic insured bank

would also point out that you can see value in crypto with being cautious of these “crypto bank entities” and their outlandish guarantees.

no such thing as a free lunch. If you’re getting similar returns to the s&p I’m going to assume there is at least similar if not greater risk, which is a far cry from a “bank “ or a “guarantee” as I’ve heard multiple times in person from peers talking about these entities