HFSP

Yeah, it's important to stay level-headed, for sure. For me personally, I'm looking to take some calculated risk on some part (probably 5-10%) of my portfolio. For example, when I say My noob brain is saying "LDO... double your money in a year and only pay 1%", it's to invite argument for/against, and I will be closely examining all-case scenarios.

cool post dude. good job putting in some leg work.

I like the way you are thinking in terms of figuring out the best options.

Thread has gotten really cool as its now people trying to figure out how to build on the bags. Have been doing the standard blockfi/cels but want to expand into defi / borrowing against btc.

Really appreciate everyone writing out their thought processes in getting into Defi/leverage . Once I actually formulate a plan for myself I will post it to see what others think.

Is that really what you're reading?

I'm reading a bunch of people at various points in knowledge/accumulation trying to understand the best way to leverage their wealth/positions.

Good call not getting into this in the first place. Mo money mo problems.

Yes, thanks for the posting that info.

------------------------------------------------------------
Expanding slightly upon my thinking from my earlier post:

>>> Option 1
Invest 4 BTC with Celsius for 1 year [*1] and borrow with 25% LTV @1%APY. Use the borrowed funds to buy 1 BTC worth of ETH and reinvest that @5.5% with BlockFi.

*Need >11.5% [*2] gains on ETH to beat investing the BTC @4% with Nexo.

*Would be 4.5% net interest gain on the borrowed funds, and

*Would be 1.25% net interest gain on the full collateralised funds compared to keeping on my Trezor, all else being equal. [*3]

>>> Option 2
Invest 2 BTC with Celsius for 1 year and borrow with 50% LTV @~9%APY. Use the borrowed funds to buy 1 BTC worth of ETH and reinvest @5.5% with BlockFi. Plus, invest 2 BTC @4% with Nexo.

*As with Option 1, need >11.5% [*4] gains on ETH to beat investing the BTC @4%APY with Nexo.

*Would be 3.5% net interest to pay on the borrowed funds, and

*As with option 1, there would be 1.25% net interest gain on the full collateralised funds.

I'd appreciate input from anyone kind enough to give it, eg:

1. Have I missed anything?
2. Is there much to chose between the two options?
(I'd feel happier splitting the collateralised funds between two parties.)
3. Is there an advantage to having 25% LTV vs 50% LTV in the event the BTC price should crash?
4. Thoughts on the risk involved with BlockFi, Nexo, etc holding the funds?


[*1] As an example. Could be more/less BTC and longer/shorter than a year
[*2] (4 x 4%) + 1% - 5.5% = 11.5%
[*3] Assuming BTC:ETH ratio remains constant, for simplicity
[*4] (2 x 4%) + 9% - 5.5% = 11.5%

I have an embarrassing amount of BTC to not be able to confidently answer 2, 3, 4, 7, 8 and 9.

wasn't meant as a sleight, i have no doubts new tools to leverage is heavily correlated with ath though, kinda feels like a bubble, if even a short term one, may not pop, or at least not pop for a while - china's housing market has undergone similar explosions (a studio apartment 1 hour from downtown beijing will run 7 figures usd despite average income <2k a month) and people been calling it a bubble for well over a decade and yet it keeps sustaining

i just don't feel easy about it and anyway also feel it's at a point where lifechanging gains are gone

am interested in getting in on new shtcoins and nfts though, think those have more upside before they pop too

Bro, this **** is going to upend every aspect of the global financial system. It's going to revolutionize how the entire world functions imo. It's barely getting started.

Of course lifechanging gains are still possible. It still hasn't even really gotten started yet.

Unless it's all useless, which I don't believe it is.

Hard to upend something as a copy

We are really changing the world as we know it. The world is not anymore the way it used to be.

Inspector gadget, this assumes mass adoption. Which hasn't yet happened and as the price goes up, gives non holders even less incentive to join up late and get rekt.

Crypto and btc in particular is concentrated to absurd amounts to the point where people like the winklewii would fundamentally be nations unto themselves being able to personally outspend the usa in military.

That's not a world I nor anyone of you not already holding thousands of coins would want and for that reason it'll never happen

Genuinely map it the absurd transfer of power that would entail if btc became what you envision and then map out why the rest of the world would ever want to go along with that

Investment tool yes, having a large role in the future economy yes, revolutionary new money will never happen

"btc in particular"? Would be surprised if it is not by far the least concentrated cryptocurrency.

I haven't done any math but how different is collateralize your btc thank just buying a simple future btc contract. I mean if price drops 50% you lose probably your bitcoin anyway

Hes saying you have bitcoin billionaires but if prices go as high as bulls are saying, you would have bitcoin quadrillionaires whos personal wealth would outpace the entire rest of world

I was too young to remember much about the dotcom bubble, but I'm pretty sure the kinds of comments I've been seeing the last few pages in this thread look a lot like the kinds of things people were saying back then.

But you are assuming ETH outperfoms BTC. Which might not be true. DeFi is not the same as ICOs (I think twoshae made that argument in this thread). I think it would be better to just buy ETH.

I am in a similar boat. The few ETH I had are already invested and now I would like to invest some BTC. I was actually thinking to buy some Digg and start providing liquidity/farming. AMPL seems to be doing just fine, so probably Digg will hold its pegg too? I dont know, Im probably an idiot and I am missing something.

What are you thoughts on this guys?

No, I stated that I was assuming the ratio between the BTC and ETH remained constant, and that was only for simplicity purposes regarding playing the interest rates anyway. The performance of one against the other is not too relevant for what I was asking. I could just have easily left out any reference to ETH, as I would be in the same situation if I wanted to leverage my BTC to buy more BTC.

Get well ape

Imo it would be more a US invention .
Would people and democratic countries accept a currency from a totalitarian states or a “free open source” currency as a reserve like bitcoin ?

Unless China never wanted to take over the reserve currency and did it for the “greater good” of the world , which I highly doubt ....

@Meleab:
Don't forget to include taxes in the math if it is relevant for where you live. I'd go with option 1 mostly with how much less you pay for the loan and less risk of a collapse wiping out your funds. I trust BlockFi more than the others since their headquarters are in the US and are held by the Gemini Trust Company. Gemini is owned by the Winklevoss's who are loaded. Also, you don't have to buy their token coins to get great returns. You get diminished returns with your higher amount so I think Nexo is fine.

If you get 25% LTV on Celsius, but the collateral decreases in value, does the APR shoot up to the next tier or is it locked in at the 1%? I assumed it just shot up, but want to know for sure.

@rickroll:
You could do the Coinbase Earn Rewards section. I just did it and got $30 worth of crypto. Also, if you are only bearish short term then you could lend out some stables.

@Shuffle:
Are you lending stables while waiting for Bitcoin to come down? I'd assume yes, but was curious if you have a different take on them.

Making so much money that they're gonna probably have a real hard time counting it!

Why must it be automatically dystopian? What if the Winklevosses, Mike Novogratz, Michael Saylor, and Elon Musk all pledged to donate 10% of their wealth the moment BTC hit $1million/btc? That would be a pretty good thing for the world. What if a lot of other people joined the pledge?

The crypto rich aren’t required to build nukes with their money. What if they decide to help?

Irie, without getting into much of a derail, when you have individuals who can outspend their own governments, nothing ever good happens

In bitcoins case it'll be outspending entire continents

Giving away 10% wouldn't make the slightest impact

See Rome, the oligarchs regularly gave away massive amounts of their fortune in order to stay popular, this didn't prevent them from being able to personally raise an army larger than their emperor could manage and thus why average reign for a Roman emperor throughout their entire history is only 8 years and most were killed by their successors

A crypto maximalist world will have exponentially more concentrated wealth than we ever saw with Rome. I'm not predicting that we'd enter a warlord era, the winklewii will found the first global empire etc, or whatever, I'm saying that in order for the maximilist viewpoint to happen, the rest of the world would have to voluntarily adopt it and what 99% is going to accept those terms? What people and government are going to embrace a new system that flips the world upside down for a few hundred individuals who got in early?

In the Tim Ferris podcast #506 with Balaji Srinivasan (don't have timestamp, but it is in the last hour) Balaji makes a very good point about who would benefit the most from crypto taking over more as a reserve currency.

His point is that the US and China that both have a chance of getting the benefit of being a reserve currency would obviously prefer not getting competition from a crypto taking over. However for a country like India it would be better to have a form of reserve currency that is fair and that no one controls. Having a reserve currency no one controls is obviously better than having a reserve currency your competition (US/China) controls. Interesting that India then has been the most aggressive country trying to ban it, but I guess that is just another example showing the incompetence of governments.

Entire podcast has a lot of very interesting crypto discussion and is highly recommended.

I pretty much said this itt two weeks ago and got crickets. I still don't have a real view of what the endgame is apart from a digital gold endgame where it just sits there storing value to some degree.

The maximalist endgame seems absolutely awful for society.