I can't figure out why anybody would borrow crypto at such a high rate when they can borrow fiat at such a low rate
The only thing I can think of is that the borrowers would never be qualified to get fiat loans due to terrible credit which makes me wonder if Blockfi is loaning others peoples money to big flight risk's but they don't care because they profit regardless if they default or not.

The BlockFi Interest account is the only cryptocurrency storage option that pays substantial interest and offer rates that are competitive with most non-cryptocurrency interest rates. For example, high-interest savings accounts Ally Bank (0.6%) and WealthFront (1.82%) pale in comparison, although they are FDIC-insured, whereas BlockFi’s cryptocurrency deposits are not.

With a 6% APY on BTC and 8.6% on stablecoins, the BlockFi Interest Account seems like a ray of sunshine for digital asset holders that have grown used to having their holdings slosh around with market volatility.

What happens to user funds during each of these scenarios? How are they protected?
Even if we trust a business, which there is little to indicate BlockFi can’t be trusted, the doomsday “what if’s” hold primary real estate in our brains.

We talked doomsday with the BlockFi team:

BlockFi gets hacked?: “Gemini is BlockFi’s primary custodian and BlockFi doesn’t hold private keys directly. Gemini keeps the vast majority of its assets in cold storage and is insured by Aon. Gemini is a licensed custodian and regulated by the NYDFS. They recently received SOC2 Type 1 compliance audit from Deloitte for their custody solution. We encourage users to read more about Gemini’s security. “

A user account is compromised?: “Since inception, BlockFi has not lost any customer funds. In the event that a user’s account is compromised, which our security protocols have caught in the past, we freeze the individual’s account for one week. Then, we conduct a Videoconference with the affected individual to verify their identity. We can then change their email address and password, so they can regain control of their account.”

Suddenly everyone defaults on their loans?: “When we lend crypto assets to generate yield, we have an extremely thorough risk management and credit analysis process. We only primarily lend to large, well-capitalized, institutional borrowers, or to counterparties willing to post collateral and provide the ability to margin call them on a 24/7 basis.”

“What that means is, if we are lending $1M worth of BTC to Firm XYZ, Firm XYZ collateralizes the loan (typically ~120%) by giving us ~$1.2M USD. If the loan were to then enter margin call and the borrower was unable to provide additional collateral (default), we would use their USD collateral to buy crypto.”

“We have actively lent since January of 2018, including throughout multiple periods of high volatility, without any losses across our entire lending portfolio. BlockFi is bound by NDA’s to discuss terms of specific borrowers/rates.”


Would be nice if someone could explain what the hell "We only primarily lend to large well-capitalized, institutional borrowers" means

no clue but businesses offer the service so someone out there wants it. People who don’t qualify for traditional lending for w/e reason? Maybe the process is much faster?

https://www.investopedia.com/terms/r...othecation.asp

Tread with caution

Alarm bells should go off in peoples heads when when they hear about ridiculous high rates, but in a lot of cases peoples own greed is what gets them in sticky situations and that greed leads them to throw caution to the wind.

Ask this guy about it.

https://www.coindesk.com/okex-suspends-withdrawals


In the past, it would seem every single time an exchange has suspended withdrawals, they were declared insolvent shortly after. Maybe with this guy getting arrested it's slightly different. Although I think to myself, what happens if this guy dies? Is there some process to get access to his keys? It's like the fairly recent Quadriga incident where the owner "died" and nobody could get to the money.

there have been a number of times withdrawals have been paused and everything came up fine. coinbase, binance, recently kucoin have all done that.

Quadriga was a scam from the start. It's quite possible, probably even likely, that the founder isn't dead. Even if he is dead, they were a failed model. No big exchanges that are properly run have 1 guy that is the only person with the key(s) and no backup. I don't know how OKex is run, but aside from regulatory issues they may face, I'd bet pretty heavily the funds are safu.

How long were withdrawals "paused" on coinbase, binance, and kucoin and for what reason? Okex has stopped them indefinitely.

Found a pic of TR's bedroom

Culture Club is a great band, why you blowing up my spot, do you really want to make me cry?

In other words it means "only to those people, we see a personal interest in" pretty much, huh

Outside of BlockFi's lending account, does anyone know if they've suspended interest accounts or something?

I just went through the registration process and see a message "We are not able to offer you an account at this time. Please see our T&Cs"

Guessing it has to do with where you live, I opened a BlockFi account yesterday and it went fine.

"We only primarily lend to large well-capitalized, institutional borrowers"


on·ly
/ˈōnlē/
Learn to pronounce
adverb
1.
and no one or nothing more besides; solely or exclusively.


pri·ma·ri·ly
/ˌprīˈmerəlē/
Learn to pronounce
adverb
for the most part; mainly.

The market is down 1.2% but BTC is up 1.5%.. what gives TS? I thought BTC was just some shitty trading vehicle to follow the market and it made no sense to use it anymore?

You got too wrapped up in the daily moves and lost site of the big picture. It's not too late to buy back that imaginary BTC you sold at the lows. Just think of the 10 year outlook.

Once stimulus starts hitting people's bank accounts, your going to have to pay a lot more.

That's correct. Bitcoin trades like a retail loser high risk/junk asset. Today follows that pattern.



Risky junk assets are unusually strong today. Not really sure why, it's pretty unusual to see this disconnect between trash and a market selldown. Regardless, bitcoin did sell off quickly when the Pelosi news hit and the market dived. It was up a lot more.

I am thinking of the ten year outlook, it why I want nothing to do with bitcoin long term. It's fine to trade short term though.

Yeah man, hyperinflation, stimulus, corona fear causing a buyup in March (result: -50% to match the market's -30%). All the Big Things just around the corner. For 3 years now.

Don't fool yourself about what bitcoin is. It's a retail junk hype asset and it trades like it. See for yourself above. I appreciate the sentiment of genuinely trying to help me out with what you believe though (that bitcoin will moon and to get in now is the best time). That's nice of you.

LOL at now comparing BTC to random junk stocks because they also went up over the last 24 hours

It's hard to believe that the 1% club of BTC owners only own one or two full bitcoins....

TS moving some goalposts again.

Meanwhile economic reality keeps slapping him in the face.

What's wrong with taxing capital gains from crypto? If you don't like it, then I shouldn't get taxed from capital gains on my non-crypto gains!!!

Are you responding to someone?

Many Bitcoiners don't think there should be any taxes at all. Most countries, however, do have capital gains tax on it. That seems reasonable to me as a general principle, if there is capital gains on other assets. Exempting smaller purchases also makes sense, treating it as a foreign currency when it is actually used as a currency. The problems come with bad implementation in certain jurisdictions. In Sweden, for example, gains can only be offset by losses up to 70 %, meaning that if you trade a lot you could be breakeven and still owe millions in taxes.

I've always compared bitcoin to random junk stocks. That's why it's in my "random junk stocks" section because it trades like that. And I've said this from the start:

March 11th when bitcucks were saying it would act like a safe haven/uncorrelated:
September:
I've said the same thing since last year - bitcoin is no longer uncorrelated or a safe haven, it behaves just like other market-linked risk assets.

Ignore this at your peril. Or profit if crappy retail risk assets soar on stimulus - I don't have a good read for what will happen in the near term to the market and speculative crap appetite. But to willfully ignore the hard evidence that bitcoin now trades like a speculative market-linked junk stock doesn't seem very clever. Had you realized this in March (rather than stupidly believed it was a safe haven or uncorrelated) you could have owned twice as much bitcoin right now!

Shrimp brain short term thinking in full force.

I only care about the long term and we all know picking arbitrary timeframes is the only way to discredit Bitcoin's price path. Getting into an argument about Bitcoin's price is one of the dumbest things a bear could do. It has outperformed anything and everything in sight since it's existence.

But tell me moar about March and your 'insights' please, it's very interesting! In the mean time I'll sit back and enjoy the show Bitcoin is about to give.

Highest pre March price this year was 10,300. It's now 11,800.

You claim to be this trading savant that can foresee all of this, yet you own and have owned zero bitcoin, even though with your self claimed wisdom you could have traded it over and over again for crazy gains. Why don't you trade bitcoin when you know so much about how it's going to move?

Here's shrimp brain: Bitcoin went up from $1 to $10,000 dollars, a huge move which has outperformed everything! Therefore bitcoin is the best asset you can own!

I want you to meditate on that until you understand how stupid that comment is.
Let's just ignore that it went >-50% in that time (hence my comment you could own twice as much bitcoin if you didn't stupidly believe early this year that it was a safe haven and uncorrelated).

I'm not a trading savant. I pick up the easy/****** money, avoid risky spots, and do pretty well for it. If you're a savant you're doing trading wrong imo.
There are better returns with lower risks and much faster results in options trading, especially vs current bitcoin prices. The trouble with bitcoin has always been that you can't take size because of its enormous risk profile The problem with bitcoin now is that there's no rational moon scenario left.

I know nothing about trading, that's why I don't trade. Just been stacking sats since it was $200 (actually $800, but then it dropped to $200 and happily stacked more)

Ultimately, this is where we disagree.

Hodl...


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there is A LOT of monetary news happening over these last few days. things are changing rapidly.