How does a 9.3% savings account sound?

[Panscan]

during bull run there was definitely a market lending cash to people who had seen significant gains in their bitcoin and other crypto and wanted cash but didn't want the tax hit of selling and realizing gains. there was also a market for institutional lending to market makers and traders and such. and there was the gbtc arbitrage trade.

did those earnings really support the yield rates they were paying? unclear. when they got bailed out buy FTX they clearly had liquidity problems as Celsius collapsed and there was a bit of a bank run on all these platforms but it's not entirely clear what the problem was.

for sure they made mistake with the gbtc trade because that discount to NAV turned significantly negative and persisted so entities that bought a bunch of gbtc thinking they were going to profit on the arb were forced to either sell at a loss to get liquidity back, or hold on and hope for the discount to close, which it never has

and so they took a loan from FTX who turned out to be just a total house of cards.

There was never an institutional lending market. Show me any piece of data to support this. Why would a market maker take on a loan from blockfi when they can just utilize HFT arbs from exchanges to do their market making ?

the first part of your first paragraph is equivalent to pay day loans for poors. The concept of taking a loan instead of paying taxes and harvesting gains is basically also only done by YOLOs who think it will forever go up. Those same people then have their loans blow up in their face when it doesn’t perpetually go up and they get margin called.

a giant house of cards in all aspects. The entire time it was literally just a trap to become a loan shark for poors. There is no institutional need for blockfi

[jacoavlu]

There was never an institutional lending market. Show me any piece of data to support this. Why would a market maker take on a loan from blockfi when they can just utilize HFT arbs from exchanges to do their market making ?

the first part of your first paragraph is equivalent to pay day loans for poors. The concept of taking a loan instead of paying taxes and harvesting gains is basically also only done by YOLOs who think it will forever go up. Those same people then have their loans blow up in their face when it doesn’t perpetually go up and they get margin called.

a giant house of cards in all aspects. The entire time it was literally just a trap to become a loan shark for poors. There is no institutional need for blockfi

yeah I never said people were smart to take loans. a lot of people got wrecked posting coins as collateral to lever up, got liquidated

the institutional lending was lending btc. just like there is institutional lending of apple stock or etfs or whatever.

Blockfi was and is a regulated entity. In NY which is generally pretty anti crypto (they went up against Tether). and they were fined by SEC. but none of those authorities ever said they were lying about how they were generating yield.

[Tim]

Bottomline, there was never a market or need outside of a self contained echo chamber.
All these "contracts" of athletes denominated in BTC and celebrity endorsements, and announcements that BTC would be accepted as payment and countries adopting BTC as currency basically came down to hype.
Speculative investment for sure. Convert dollars to BTC and exit hope to get more dollars back. The number of actual payments or the latter, conversions back to USD.
BTC never broke out of the echo chamber.
For sure, some extracted tons of dollars and a few used BTC to "move dollars across borders", my guess is for illegal purposes for the extremely vast majority of transactions.
It just does not seem to be main stream or have that capability.

[jacoavlu]

Bottomline, there was never a market or need outside of a self contained echo chamber.
All these "contracts" of athletes denominated in BTC and celebrity endorsements, and announcements that BTC would be accepted as payment and countries adopting BTC as currency basically came down to hype.
Speculative investment for sure. Convert dollars to BTC and exit hope to get more dollars back. The number of actual payments or the latter, conversions back to USD.
BTC never broke out of the echo chamber.
For sure, some extracted tons of dollars and a few used BTC to "move dollars across borders", my guess is for illegal purposes for the extremely vast majority of transactions.
It just does not seem to be main stream or have that capability.

https://bits.monospace.live/

[bovie]

Unrelated but also related: If you've never seen the movie Margin Call, it is a must-watch with a thrilling script and a bunch of great actors at the top of their game.

[The White Coat Investor]

I've been told that some of the stuff I've written about crypto hasn't or won't age well. However, I don't think I've ever written anything that aged as poorly as the OP in this thread.

While I knew there was risk there (nothing yields 9-10% without being high risk even if you can't see the risk) I'm pretty surprised at this meltdown. I thought this was probably the least risky way to invest in any sort of cryptoasset. Now I'm not so sure.

[The White Coat Investor]

I haven’t gone back and read from the beginning but if I did I’d guess it’s a good example of the fact sometimes there are opaque and not obvious risks and counterparties are never to be trusted particularly in “crypto”

That's the most frustrating part. The whole point of this space was that you didn't have to trust any sort of centralized authority. The latest failure isn't Bear Stearns, but it's still a billion dollars that people used to have.

[jacoavlu]

I've been told that some of the stuff I've written about crypto hasn't or won't age well. However, I don't think I've ever written anything that aged as poorly as the OP in this thread.

While I knew there was risk there (nothing yields 9-10% without being high risk even if you can't see the risk) I'm pretty surprised at this meltdown. I thought this was probably the least risky way to invest in any sort of cryptoasset. Now I'm not so sure.

what was it that was said which has aged so poorly? I think we actually had some good discussion in the thread

That's the most frustrating part. The whole point of this space was that you didn't have to trust any sort of centralized authority. The latest failure isn't Bear Stearns, but it's still a billion dollars that people used to have.

this is why people like me like to say bitcoin, not crypto, and not your keys, not your coins. this thread had kind of died but if you follow the bitcoin thread I've talked a lot about the importance of self custody and trying to help people understand what I think are significant differences between bitcoin and everything else "in the space"

[jacoavlu]

http://web.archive.org/web/20220425205714/https://www.whitecoatinvestor.com/crypto-savings-account/

The White Coat Investor you published this a full year after the OP of this thread

[The White Coat Investor]

http://web.archive.org/web/202204252...vings-account/

The White Coat Investor you published this a full year after the OP of this thread

Yea, it was written 6 months before it was published, but yea. Pretty much what I said above.

[The White Coat Investor]

what was it that was said which has aged so poorly?

This is the part that doesn't age well, the Original Post

How does a 9.3% savings account sound? Sounded good, didn't age well.

01-15-2021, 08:57 AM
Clickbait title, kind of but not really Didn't age well

Stablecoins are cryptocurrencies that are designed to be stable, have minimal volatilty. This discussion centers around popular stablecoins USDT, USDC, and GUSD - these are designed to have a $1 price. Didn't age well


What intrigues me and immediately strikes me as 100% too good to be true, is a BlockFI interest account where you can deposit stablecoins and earn significant interest. USDC is paying 8.6%. USDT is paying over 9%. Didn't age well

I'm seriously considering taking the plunge a buying some purely to park for interest. That would have been a bad idea. Obviously there is risk, this isn't an FDIC insured account and there is no guarantee of return of principle. Didn't that turn out to be true.

But the stablecoin environment seems in my not-heavily-researched opinion to be reasonably mature so as to make the risk-reward favorable, compared to current alternative investment options for cash, with fixed income paying very little and an inflated equities market that feels very toppish. And for the grand finale, this was a total miss. Not nearly enough reward for the risk being taken.

[jacoavlu]

This is the part that doesn't age well, the Original Post

those stablecoins still have a value of basically $1.0. the stablecoins didn't fail. the platform did. of course you know this

I actually earned like $50k with interest but got out a while ago like a lot of people who pay attention did as I learned the importance of self custody

the tone of the post and the thread has been about discussion

maybe you should go back and redline edit your post about the same thing which was published a full year later?

[xraygoggles]

so what do we think of this nowadays...

Now - not so much, lol. Dead. All these platforms are run by degenerates who lever up and re-hypothecate BTC and other crypto, then lend it out to others. Repeat ad nauseum.

During the manic bull run - great idea.

[xraygoggles]

Blockfi was and is a regulated entity. In NY which is generally pretty anti crypto (they went up against Tether). and they were fined by SEC. but none of those authorities ever said they were lying about how they were generating yield.

Gemini and FTX.US also regulated in the US. As is Genesis/Digital Currency Group.

But the thing is - when ur lending out indiscriminately to other parties - most of whom are or will end up imploding - no amount of regulation can protect you from the shrapnel.

Even Genesis, an institutional lending and custody platform for HNW users is pausing withdrawals right now, as is Gemini Earn.

[jacoavlu]

Gemini and FTX.US also regulated in the US.

But the thing is - when ur lending out indiscriminately to other parties - most of whom are or will end up imploding - no amount of regulation can protect you from the shrapnel.

right. Point being it doesn’t hurt to try to be specific about what went wrong. Like we can do better than saying “it’s all a ponzi”

Luna Terra lol was a straight up ponzi

celsius and FTX kinda ended up there due to horrible risk management and fraud.

crypto.com verdict still out

Blockfi and Gemini are further down the spectrum somewhere