Hey Jessinvestors
I recently spoke about the importance of interest rates in the Bitcoin market and how it can supercharge your dollar-cost averaging. Those who are lucky enough to be able to hold on to their coins long term take a considerable amount of risk, especially during bull markets.
When the market is running away in price, a holder has to choose, do they liquidate and cash out, or do they continue to hold and receive their interest in fewer sats at a higher dollar value.
In a bear market, the decision seems a bit easier, well, at least it is for me; I am happy to receive a lower dollar value but more sats.
HODLing seems like a simple strategy; you buy something and wait for it to appreciate at a price you can't resist and sell. For those with conviction, they get rewarded when the price shoots up, and they can take profits.
But what if your conviction is long term? That's where interest rates come in, or at least I think they do.
Bulls bring out the snakes
In a bull market, everyone is a genius; I can already see how the type of content has changed on here over the past few months. The shilling is back baby, half of these so-called shillers weren't even here for the bear market, lord knows what they were doing, but now they are among the most vocal.
These snake oil shillers will get you to buy their shit coin and part with your precious BTC not for your benefit but for them. They are the early bag holders or the referral link spammers.
People fall for them all the time; then I wonder how you had such conviction in Bitcoin. If you thought it was a good trade, why would you part with it?
I understand that everyone's financial situation is different, but I see so many have greed take over. Bitcoin produces insane returns. We've seen that to chase anything more is total greed, and you'll most likely get burned.
The burned ones never talk about it, only the ones who got in on the play early, so you get a biased view of altcoins.
Rewards for your liquidity
The reason for my tangent above is that others are tempting you to sell your Bitcoin. It's not only the fiat value temptation to sell and enjoy your life but also altcoins selling you on higher returns. This is why BTC has an interest rate to keep an additional floor of liquidity, supporting ht price.
One support level would be the cost to mine and the other would be the interest rate return. As long as my liquidity produces a better interest rate than anywhere else in traditional finance, why would I leave?
Mixing up my rates
At the moment, there are several CE-FI platforms one can use to earn interest on your Bitcoin.
- BlockFi
- Celsius Network
- Nexo
- Crypto.com
- Luno
As well as other DE-FI platforms.
The reason I mix up my BTC interest is that these tools compete with one another for capital, and therefore interest rates change. By having an allocation to all of them, I am able to benefit from the competition between them.
I also de-risk against the probability of one of these platforms collapsing which cannot be understated.
Again, it's all about putting your little money workers, to work for you and you shouldn't let them all work in the same place.
Have your say
What do you good people of HIVE think?
So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."
Let's connect
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I put a little bit of fiat into Blockfi and bought some BTC. I understand the risks since its not exactly in my own wallet but it was an easy process. It was more of an attempt to try out the system. So far my investment from then is doing quite well as BTC has had a huge run up in price and I did get some interest.
I did see a post about how Blockfi is changing their interest rates for some of the bigger BTC holders but I didn't put that much in. I have watched a few interviews from their CEO and their model does seem pretty solid. I do think they did need to raise some money due to probably loaning out too much money versus the huge volatility spikes.
As for the rest of the systems, I have not used them and I know some of them have even better interest rates. However I have yet to do enough research into them and personally I don't know if I want to average in my BTC after the run up (risk/reward isn't so great).
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A wise choice, I don’t actually like these platforms when the price is moving up they serve you far better when the price is moving down because they need to secure capital so those interest rates get a bump and with higher rates means higher sat amount each months which is all I care about
Many of these platforms are well funded but I wouldn’t say they profitable which we will have to see how thay works as well as if banks start to compete or bigger fintech like say a PayPal
For now I just want to see Sats added to my account regularly while I wait for lightning to get more adoption so I can move my Bitcoin much easier
Very interesting! I am keeping my BTC for the long haul. I have been tempted to trade it for other stuff in the past, but I am waiting for that $360,000 price point they were projecting. Only if it gets to that point would I maybe consider selling. I have a crypto.com account, so I should maybe look into this.
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On crypto.con I’ve actually been using the supercharger feature and then selling the coins I get form that to get me more Bitcoin
Ah, okay, I will have to check it out. I was trying not to keep too much stuff on crypto.com, but I might change that.
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Even then I don’t think I could let go but who knows maybe I’ll feel differently but I think that until an alt or a stock is giving me a better yield than what I can get with Bitcoin I don’t see the point in selling it!
Bitcoin also has an elastic interest rate because the supply cannot be changed so whay I am thinking in the future is it could set the floor for capital and if you want to source capital investment your yields better be competitive
Good thoughts! I am certainly going to have to think of doing something. Right now it is just sitting in a wallet.
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I do not have a crypto.com account but i do have coin base and they also have a provision where you can earn some interest of some coins. I have not tries that yet but looks like i should have a look now.
The criticism of crypto back in 2017 was that you couldn't earn anything on it. So much has changed since then. It's definitely yielding more than cash for sure.
Lol people are so ungrateful, you were already earning on the appreciation, now you getting a double earn and I'm sure they'll find a way to hate on it
I'm on 3 of the 5 CeFi networks you mentioned and the same for me, I'm more interested in getting the BTC working for me to acquire more sats as I have a 5-9 year plan. Plus you can always take a loan out if you need the cash or you can even use that loan to buy more collateral if the price of BTC dips, which you can then keep once you pay back the loan.
There are so many sat strategies that you don't need shillers as you as you start shilling it to yourself!
If ETH calms the fuck down I’d like to get some stable coins working for me on compound via ledger live and then every so often just port the interest into BTC. A bit more manual than the CEFI but the rates are good
My amounts are a bit all over the place one of my next tasks is to smooth out the amounts and make sure they all the same in each platform then track the returns and conduct a full census on the growth of my monthl my sat army
If I can double my DCA buy ins with just interest and keep compounding I can lower my cost to entry by 50% for start and then keep driving that down over time so pulling your principle out won’t even be an issue it will be a blip on the screen
Then take your principle hold it in stable coins and turn that yield into more Sats then you basically never bought any crypto Lokl
I've smoothed out and evenly distributed my corn to various places and going to let the satjers report back to me once per month with their results.
Good plan with the DCA, I'm going to have to spend some time working out where and what all these different streams are bringing in each month on average and see what's going on. Pulling out the principle and putting it to work for 10% APR sounds like a glorious plan, then when the bear hits, load up on some more sats for the next one that's already been paid for in advance!
Thank you very much for the exchange ,have a good day and a great mood
Have a great day too
thank you very much for the post,have a great day
Thanks you too
Nice post,have a nice and a great day
The various platforms are changing the game for sure. Some of my stuff is sitting not earning a return and some of my stuff is earning a crazy return.
My reason for not just focusing on Stacking sats is because to me Bitcoin hasn't scaled when it has needed to.
I'm not in love with the coins..... I'm in love with the freedom.
As long as I'm doing better being in the other coins than I would be just totally being in Bitcoin and Ethereum.
I get the whole scaling issue and yes it is an issue but I am not in Bitcoin because I care about how they scale but how it scales my bank balance. Like you I have a few bets on crazy interest rates but probably a way smaller percentage of my portfolio since those returns rely on timings, getting lets say a 30% APR depends on liquidity and the order volume to get in and out of that and I don't have time to play that game.
Most of these alts hard caps don't mean dick anyway so they can keep inflating it away to produce returns. BTC can't do that, too many HODL"rs would revolt so the interest rate is highly elastic, if you look at these sites we're using like BlockFI they're scalping a premium and giving an okay return but if you drop into the P2P market like HODLHODL you can get easily 17% APR on your Bitcoin
For me I am keen to see how elastic interest rates become as those without Bitcoin need to encourage removal from cold storage
I'm thinking about trying out HODL HODL since I wouldn't have to give up custody of my BTC to a third party to lend it out. Have you looked into them? Do you put all your BTC up or do you hold some back just in case?
The vast majority of my BTC is locked up in my ledger and I am not touching that ever its my forever HODL. The rest is split between CE-FI and DE-FI platforms earning me a return which like you mentioned has its risks since I no longer own the keys to that. I have one contract open with HODL HODL but with mining fees increasing I am not so keen on it as its going to eat into my returns and then I might as well use a custodial platform.
I also have a few million sats locked in the lightning network, Im waiting for lightning terminal to be launched fully so I can become a liquidity provider there. I did hear HODLHODL are also looking to support lightning which will make P2P lending on Bitcoin so much better