Bitcoin is still early

[jacoavlu]

Those are promotions of a short term duration which expire, not fundamental reduction of yield for increased investment, which are permanent.

Also why is bitcoin the only one with that reduced yield for high investments? So I could loan 100 eth and that is reimbursed the same rate as the high school kid with .1, but not for bitcoin.

all simply supply and demand forces

[Panscan]

all simply supply and demand forces

Well I think we look at that in opposite viewpoints. To me its a demand problem. If they have limitless ability to loan BTC to institutions and make good rates on it, they would want to lure in as much money as possible and the yield/coin would be flat or even increased for higher loaning individuals, like literally every other aspect of banking (excluding short term teaser rates).

Instead they don't really have that much demand for what they're offering, so they'll take pennies here and there from the high school kid, but don't want real money involved and de-incentivize such.

[jacoavlu]

Also the fees, it says 0.0025 BTC, is that a flat fee for cost of withdrawal or a ratio? That would be 125 dollars at 50k which is obviously a huge chunk of interest one would earn with a couple coins deposited. Yes I read it says one free withdrawal per month, but if you wanted to make multiple that is a pretty large cost to do so.

flat fee

they don’t want frequent withdrawals. Transactions on the blockchain are not free. Miners get fees on every block. Those are higher than typical but it makes sense.

[jacoavlu]

Well I think we look at that in opposite viewpoints. To me its a demand problem. If they have limitless ability to loan BTC to institutions and make good rates on it, they would want to lure in as much money as possible and the yield/coin would be flat or even increased for higher loaning individuals, like literally every other aspect of banking (excluding short term teaser rates).

Instead they don't really have that much demand for what they're offering, so they'll take pennies here and there from the high school kid, but don't want real money involved and de-incentivize such.

Don’t have demand?

You heard the part where they have like $50B on the platform and increasing like $250M a week right?

sure the interest rates may come down when the bull market cools off. I have no clue. Smarter people than me don’t know either. If and when rates change, reassess

[Panscan]

Ok so again if demand is strong why do they give less yield for more btc loaned ? I guess they are trying to avoid some whale with 10000 btc coming in and then a lot of their stuff is dependent on that person ? If that were the case though they could set their point of diminishing yield much higher. Someone with 5 btc withdrawing their money is obviously not affecting their market.

if you have infinite demand for lending you want as much capital as possible to lend out aka you wouldn’t dis incentivize the people who can provide it, from providing it to you

[Panscan]

This is also excluding the concept that this entire scheme is predicated on btc and crypto continuing to be more valuable over time and the moment it doesn’t , it all comes crashing down, like he described in March where they were doing the “ we’ll cover half” talks.

[jacoavlu]

Ok so again if demand is strong why do they give less yield for more btc loaned ? I guess they are trying to avoid some whale with 10000 btc coming in and then a lot of their stuff is dependent on that person ? If that were the case though they could set their point of diminishing yield much higher. Someone with 5 btc withdrawing their money is obviously not affecting their market.

if you have infinite demand for lending you want as much capital as possible to lend out aka you wouldn’t dis incentivize the people who can provide it, from providing it to you

From the horses mouth:

”Thanks for reaching out to BlockFi.

The interest we are able to pay is based on the yield that we are able to generate from institutional lending, which directly correlates to the market demand in the space (I.e. what rate institutions are willing to pay to borrow specific crypto assets, as it varies from asset to asset).

Bitcoin over the last few months experienced a lower demand for BTC loans on our institutional side. Instead of lowering the entire rate for BTC, we implemented the tiered rate so as many clients as possible could take advantage of the higher rate.”

[jacoavlu]

all of this lending and interest talk is of course tangential to the real issue

are you long bitcoin or not?

[Panscan]

all of this lending and interest talk is of course tangential to the real issue

are you long bitcoin or not?

Yes long for sure but I don’t think that means you unanimously support or approve of all the things having to do with btc

[jacoavlu]

Yes long for sure but I don’t think that means you unanimously support or approve of all the things having to do with btc

agree

but i would encourage you to avoid characterizing something as a “scheme” simply because you might not fully understand it

[Panscan]

From the horses mouth:

”Thanks for reaching out to BlockFi.

The interest we are able to pay is based on the yield that we are able to generate from institutional lending, which directly correlates to the market demand in the space (I.e. what rate institutions are willing to pay to borrow specific crypto assets, as it varies from asset to asset).

Bitcoin over the last few months experienced a lower demand for BTC loans on our institutional side. Instead of lowering the entire rate for BTC, we implemented the tiered rate so as many clients as possible could take advantage of the higher rate.”

So yes they do have a demand problem. The next question would be, if they dont have the institutional demand to meet their 6 % BTC for everyone ( they keep it for the small frys bc like you said those people are loss leaders and will likely use a loan of their own at some point), how can they meet the claims for the other cryptos offered? I'm going to imagine there is significantly more institutional demand for BTC than litecoin.

[Panscan]

agree

but i would encourage you to avoid characterizing something as a “scheme” simply because you might not fully understand it

I hope you do well, was an interesting listen and will definitely pass along the podcast as multiple people have asked me about this stuff recently

[jacoavlu]

I hope you do well, was an interesting listen and will definitely pass along the podcast as multiple people have asked me about this stuff recently

here’s another. Their chief risk officer further talking about how they make money

https://podcasts.apple.com/us/podcast/on-the-brink-with-castle-island/id1480586463#episodeGuid=eb8cf73f-f626-4443-bb39-abb72a0c775a

its not that hard to wrap your head around the broad strokes of this stuff. If they need liquidity whether coins or dollars they will probably raise deposit interest rates, to attract assets. If they don’t have enough demand they will have to lower rates or accept lower profit margins

[G]

Jealous of the daily 5-10% increases in BTC. But I just wanted to point out that the guy who repaired my oven today said that BTC is going to 100k by the end of the year.(No, I wasn't the one to start an investing conversation with the repair guy.)

I mean...at this growth rate, it'll be there by the end of the month!

Very interesting times!

[Panscan]

Jealous of the daily 5-10% increases in BTC. But I just wanted to point out that the guy who repaired my oven today said that BTC is going to 100k by the end of the year.(No, I wasn't the one to start an investing conversation with the repair guy.)

I mean...at this growth rate, it'll be there by the end of the month!

Very interesting times!

It honestly could be