How does a 9.3% savings account sound?

[jacoavlu]

How much are you putting into this venture if you don't mind the question?

Keep us posted.

undecided but probably somewhere between $10k-$50k

I understand there is risk. But I also consider equities investment - where most of the rest of my money goes - to have a risk of 50% principal loss

some of this is “something to do” while still not getting cute with things on the equities side. Market timing, individual stocks etc

Along similar lines I used to buy and roll T bills as a layer of my emergency fund, that was when they paid ~2%. It was something active to do while staying boring with the money that really mattered. Now T bills are basically at zero so that’s no fun

[jacoavlu]

(not seeing 9.3% anymore)

that’s on USDT (tether)

https://blockfi.com/rates/

[Lordosis]

undecided but probably somewhere between $10k-$50k

I understand there is risk. But I also consider equities investment - where most of the rest of my money goes - to have a risk of 50% principal loss

some of this is “something to do” while still not getting cute with things on the equities side. Market timing, individual stocks etc

Along similar lines I used to buy and roll T bills as a layer of my emergency fund, that was when they paid ~2%. It was something active to do while staying boring with the money that really mattered. Now T bills are basically at zero so that’s no fun

Equity does have a lot of risk but it is shallow risk. If you wait long enough it will come back. At least if you have a well diversified portfolio.

I don't know if you can say the same here. Seems there is a higher chance that your money just goes poof and you are SOL.

If you are Only going in with a five figure amount it will not hurt too bad if the worst happens. Good luck.

[Tim]

Ah, the good old days. Your returns may actually come true. I have no doubt that many will lose substantial amounts, interest and principal.
https://www.google.com/amp/s/abcnews...6900516&page=1

I almost bought Stanford Financial CD’s. Actually sat in their box at a basketball game. An acquaintance from Chicago had clients tied up in the Madoff thing.

Ethically, “too good to be true” translates into enabling a scam that I would choose not to do even if I got paid the principal and interest. Not worth the time to even research it. Turned down a payday loan private investment that was perfectly legal.
Someone will get shafted in this, no doubt.

Do no harm applies to any investments is not a bad philosophy.

Actually, equities and timing and Tesla options sound safer.

[Dont_know_mind]

It sounds like you've fallen in love with crypto.

It's fascinating that crypto is becoming the new high yield for younger folk.

Somehow going from 2% risk-free to 0.1% causes people to lose their brain.

Putting your EF or retirement savings or both in crypto is a long way from index investing.

The story goes, I'll try it out with a bit, 15-50k, can't hurt me. It does well, you put in more and it does hurt you.
If you don't put in any now, you'll kick yourself if it does well and put in more later anyway.
Sounds like you're itching for it and I would be fearful about potential future losses.
Good luck, I think you're headed for a beating. But I've been wrong before, and maybe it does well.

[Nysoz]

Actually, equities and timing and Tesla options sound safer.

To make 10% off TSLA options for the next year, sell a cash secured put $400 strike Jan 2022 expiration.

by holding $40k as collateral you’re paid $4100 in premium. As long as Tesla trades above $400 in a year then you get your 10% returns. If Tesla goes under 400, then you’re forced to buy 100 shares of Tesla with the $40k you set aside no matter what it’s worth in a year.

At least with the Tesla options, you know where your value/money/premium is coming from. Doesn’t seem To be concrete answers where lending out your stable coin generates enough return to pay you 10%.

[jacoavlu]

Equity does have a lot of risk but it is shallow risk. If you wait long enough it will come back. At least if you have a well diversified portfolio.

I don't know if you can say the same here. Seems there is a higher chance that your money just goes poof and you are SOL.

If you are Only going in with a five figure amount it will not hurt too bad if the worst happens. Good luck.

I think you’re right. I woke up thinking about this and with a feeling that a loss from this would be quite painful mentally (way more so than a much larger nominal decrease in the value of my equities) while the upside is convenient but far from life changing

I’m going to observe with a 4 figure amount. I will report back.

[jacoavlu]

Ah, the good old days. Your returns may actually come true. I have no doubt that many will lose substantial amounts, interest and principal.
https://www.google.com/amp/s/abcnews...6900516&page=1

I almost bought Stanford Financial CD’s. Actually sat in their box at a basketball game. An acquaintance from Chicago had clients tied up in the Madoff thing.

Ethically, “too good to be true” translates into enabling a scam that I would choose not to do even if I got paid the principal and interest. Not worth the time to even research it. Turned down a payday loan private investment that was perfectly legal.
Someone will get shafted in this, no doubt.

Do no harm applies to any investments is not a bad philosophy.

Actually, equities and timing and Tesla options sound safer.

fair point re too good to be true

though I really don’t think this is a scam or fraud. BlockFI is only one of many “crypto banks” doing the same. It seems to be like securities lending.

I just don’t understand how there’s a market for securities lending of $1 stablecoins.

[jacoavlu]

It sounds like you've fallen in love with crypto.

It's fascinating that crypto is becoming the new high yield for younger folk.

Somehow going from 2% risk-free to 0.1% causes people to lose their brain.

Putting your EF or retirement savings or both in crypto is a long way from index investing.

The story goes, I'll try it out with a bit, 15-50k, can't hurt me. It does well, you put in more and it does hurt you.
If you don't put in any now, you'll kick yourself if it does well and put in more later anyway.
Sounds like you're itching for it and I would be fearful about potential future losses.
Good luck, I think you're headed for a beating. But I've been wrong before, and maybe it does well.

I like that you think I’m young

not in love with crypto, but I think bitcoin is unique and by itself deserves consideration as a buy and hold investment

the rest ive no interest, aside from being perplexed by this stablecoin interest thing

[jfoxcpacfp]

No guarantees or insurance backing. But doctors have the freedom to lose $50k here and there on a gamble. Would you do the same at a craps table? The rate is an inducement to stay longer, which is where I believe Peds draws the Ponzi analogy. “Investors” are gambling on the company’s gamble.

>>So, their goal is that I deposit my stablecoin, and they do what with it? Run off laughing to the bank? They have someplace that they exchange my stablecoin for something more than a dollar? Or I try to withdraw and there's nothing there?<<

No, a Ponzi is designed such that the new investors’ principle is used to pay off the prior investors’ returns and all withdrawals in order to keep the system afloat. And a well-designed system works well until there is a disruption and the new principle dries up. There is always a disruption, the only question is “when?” So, it’s up to you to take back your money before the “when” happens. Same as with gambling on TSLA, the main question is when to cash out.

[Tim]

fair point re too good to be true

though I really don’t think this is a scam or fraud. BlockFI is only one of many “crypto banks” doing the same. It seems to be like securities lending.

I just don’t understand how there’s a market for securities lending of $1 stablecoins.

Basically a preferred stock with a dividend preference that accepts investment in crypto. Wants to operate as a bank preferred stock without regulation.
What could go wrong? Too high of a hurdle to be sustainable long term. They are not banks and dressing up "interest or dividends" changes the words only not the financial basics. The allure of crypto and bank and interest is semantics that are enticing. Would you have interest if it was an oil company or an insurance policy? Change the words and is this speculative deal attractive. You are much smarter than me. This is an equity investment "disguised" in a different wrapper completely outside of regulation. My thought is that you actually consider angel investing or some other high risk choice. Debt is supposed to have a lower risk than equity, thus an uncapped equity premium. Preferred stock with no conversion does not sound attractive. Regardless of the venture (stock, RE, or a coal company). Take crypto out of it and how does it sound. Like a loser because the hurdle rate is too high.

[jacoavlu]

Basically a preferred stock with a dividend preference that accepts investment in crypto. Wants to operate as a bank preferred stock without regulation.
What could go wrong? Too high of a hurdle to be sustainable long term. They are not banks and dressing up "interest or dividends" changes the words only not the financial basics. The allure of crypto and bank and interest is semantics that are enticing. Would you have interest if it was an oil company or an insurance policy? Change the words and is this speculative deal attractive. You are much smarter than me. This is an equity investment "disguised" in a different wrapper completely outside of regulation. My thought is that you actually consider angel investing or some other high risk choice. Debt is supposed to have a lower risk than equity, thus an uncapped equity premium. Preferred stock with no conversion does not sound attractive. Regardless of the venture (stock, RE, or a coal company). Take crypto out of it and how does it sound. Like a loser because the hurdle rate is too high.

goals to explore direct real estate investing in 2021. Need to learn a lot more.

im not sure you can fairly say they’re “not banks”

https://blockfi.com/licenses-disclosures/

[Tim]

goals to explore direct real estate investing in 2021. Need to learn a lot more.

im not sure you can fairly say they’re “not banks”

https://blockfi.com/licenses-disclosures/

A bank is a financial institution licensed to receive deposits and make loans.
Specific rules and regulations. Nation and state. Rights and privileges with obligations.
Same thing with securities.

https://www.goldmansachs.com/our-firm/history/moments/2008-bank-holding-company.html

You are making a private loan. Not dealing with a bank, you are dealing with an entity that discloses that it is not a bank.

[jacoavlu]

A bank is a financial institution licensed to receive deposits and make loans.
Specific rules and regulations. Nation and state. Rights and privileges with obligations.
Same thing with securities.

https://www.goldmansachs.com/our-firm/history/moments/2008-bank-holding-company.html

You are making a private loan. Not dealing with a bank, you are dealing with an entity that discloses that it is not a bank.

fair enough. I certainly don’t want to position myself as a defender of BlockFI nor anything else I will readily admit I don’t fully understand.

likely:

typical Bank ——— BlockFI et al ———- Ponzi

true length of these lines still undetermined

[Jaqen Haghar MD]

I’m putting all my money into crypto-pets.com instead. I think they’ve developed a winning formula this time around.

My virtual cat, got virtual cat diabetes, and now I need virtual cat diabetes insulin or she’s finished, plus their virtual cat litter is really cheap. They’ve basically cornered the market. It will be years before the competition catches up.