Cryptocurrency - Bitcoin Continues to Soar!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Locked
qwerty123
Posts: 232
Joined: Thu Jun 26, 2014 7:44 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by qwerty123 »

Cycle wrote: Wed May 05, 2021 11:06 pm
qwerty123 wrote: Wed May 05, 2021 8:47 pm
Cycle wrote: Wed May 05, 2021 8:34 pm Unfortunately (fortunately?) Dot and Doge aren't available on coinbase pro so despite attempts to buy them in the past I've been thwarted. Perhaps I need to open a binance account.

I have a policy of buying any coin I hear about and to never research them
This will end well.
Well now i'm trying to stick to my IPS and get some DOT (a small amount). I've got the Kraken account setup now, where I can purchase polkadots.

Problem with kraken is i need to wire money into the account, which is like $25 with my bank. They don't allow ACH. I can send some BTC from coinbase pro; however, when I send the BTC the cost basis likely won't transfer so I'll need to keep track of that myself? No thank you. How many non-tax savvy folks are sending crypto around and getting hit with unexpected tax bills at the end of the year.

What I don't understand is how is DOT is earning 12% for users staking at Kraken. That has ponzi scheme written all over it. Which is a sign the Dot has Much WOW and must be purchased as soon as possible.
It concerns me that you are just running around and randomly buying coins without really doing much research. With a very small amount of research, I learned that the rate of return from staking on Kraken is from running a validator, which returns an average rate of 10% + I'm assuming some fees - this is standard for proof of stake blockchains, and typically comes in the form of inflation.

If you are going to put money into some highly speculative assets like this, I highly encourage you to actually do some research and understand what you are getting into rather than throwing many at the latest coin you hear about and hoping for the best. I say this as someone that does have money in some cryptocurrencies, but follows the projects he invests in fairly closely, and makes longer term bets (with the full knowledge that he might lose a significant amount of money). What you are doing does not feel like it is going to end well for you.
Jack Burton
Posts: 37
Joined: Mon Sep 14, 2020 10:00 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jack Burton »

JHU ALmuni wrote: Tue May 04, 2021 8:24 pm My initial $8000 investment in dogecoin is now worth half a million... I'm in shock :sharebeer
I would cash that out post-haste given that it’s a mega-whale driven meme coin. Enjoy most of the money and buy back into btc or eth and keep the crypto gravy train going!
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Kookaburra »

YRT70 wrote: Thu May 06, 2021 12:30 am
txhill wrote: Wed May 05, 2021 11:44 pm
cogito wrote: Wed May 05, 2021 8:49 pm
txhill wrote: Wed May 05, 2021 11:58 am
sojersey wrote: Tue May 04, 2021 9:28 pm Dogecoin mooning, this anthem goes out to all the Bogleheads :wink: https://www.youtube.com/watch?v=cbI31x3FpS0
That is hilarious ... they really are all putting it in dog money.
A friend/coworker of mine went to school with Remy, all of his Reason parodies are absolutely hilarious. The original bitcoin parody he did is just as good. https://www.youtube.com/watch?v=UG7zLhEWanc
This is great too, but dog money is just perfect
+1. Dog money is on another level.
The coin should have inscribed on it: “In Dog We Trust”
Cycle
Posts: 2047
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Cycle »

qwerty123 wrote: Thu May 06, 2021 8:37 am It concerns me that you are just running around and randomly buying coins without really doing much research. With a very small amount of research, I learned that the rate of return from staking on Kraken is from running a validator, which returns an average rate of 10% + I'm assuming some fees - this is standard for proof of stake blockchains, and typically comes in the form of inflation.

If you are going to put money into some highly speculative assets like this, I highly encourage you to actually do some research and understand what you are getting into rather than throwing many at the latest coin you hear about and hoping for the best. I say this as someone that does have money in some cryptocurrencies, but follows the projects he invests in fairly closely, and makes longer term bets (with the full knowledge that he might lose a significant amount of money). What you are doing does not feel like it is going to end well for you.
Researching these assets is likely not going to give one any better result than my strategy. Time will tell, but if you believe my strategy is flawed, you are bearish crypto.

I have like 50k in crypto, mostly in btc/eth. This is less than 2% of my portfolio. My typical buy is $2000 of these defi ones when I hear about a new one and then I just hold it till it goes to 0 or the moon:
LINK
MKR
UNI
ADA
AAVE
COMP
BAL
REN
SNX

Next week will add DOT

I'm definitely not adding gumrocket as txhill suggested...
Never look back unless you are planning to go that way
Prahasaurus
Posts: 1028
Joined: Fri Mar 29, 2019 1:02 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Prahasaurus »

Cycle wrote: Thu May 06, 2021 11:37 am
qwerty123 wrote: Thu May 06, 2021 8:37 am It concerns me that you are just running around and randomly buying coins without really doing much research. With a very small amount of research, I learned that the rate of return from staking on Kraken is from running a validator, which returns an average rate of 10% + I'm assuming some fees - this is standard for proof of stake blockchains, and typically comes in the form of inflation.

If you are going to put money into some highly speculative assets like this, I highly encourage you to actually do some research and understand what you are getting into rather than throwing many at the latest coin you hear about and hoping for the best. I say this as someone that does have money in some cryptocurrencies, but follows the projects he invests in fairly closely, and makes longer term bets (with the full knowledge that he might lose a significant amount of money). What you are doing does not feel like it is going to end well for you.
Researching these assets is likely not going to give one any better result than my strategy. Time will tell, but if you believe my strategy is flawed, you are bearish crypto.

I have like 50k in crypto, mostly in btc/eth. This is less than 2% of my portfolio. My typical buy is $2000 of these defi ones when I hear about a new one and then I just hold it till it goes to 0 or the moon:
LINK
MKR
UNI
ADA
AAVE
COMP
BAL
REN
SNX

Next week will add DOT

I'm definitely not adding gumrocket as txhill suggested...
That's a very solid portfolio with long term appreciation potential. My biggest regret was not buying a ton of MKR when I first learned of DAI...
Asset Allocation: VT
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

Ether at $3950 👀. Even as a believer in Ethereum I'm wondering how long this can last and if the crash is going to happen soon ,lol
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

decapod10 wrote: Sat May 08, 2021 5:16 pm Ether at $3950 👀. Even as a believer in Ethereum I'm wondering how long this can last and if the crash is going to happen soon ,lol
Yeah...I’m glad I’m heavy on Ethereum but either some big institutional investors have started buying all of a sudden or retail irrational exuberance has kicked into high gear. It might actually be the former but hard to say...
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Sat May 08, 2021 5:16 pm Ether at $3950 👀. Even as a believer in Ethereum I'm wondering how long this can last and if the crash is going to happen soon ,lol
Well, you have that big player who put in an $8K strike price on July options.

And this:

https://www.coindesk.com/vaneck-files-f ... raded-fund
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

watchnerd wrote: Sat May 08, 2021 5:37 pm
decapod10 wrote: Sat May 08, 2021 5:16 pm Ether at $3950 👀. Even as a believer in Ethereum I'm wondering how long this can last and if the crash is going to happen soon ,lol
Well, you have that big player who put in an $8K strike price on July options.

And this:

https://www.coindesk.com/vaneck-files-f ... raded-fund
Not sure is related to that investor, but July is important to ETH because that's when EIP-1559 is supposed to start. What happens after that is transaction fee start to get burned, and there is speculation that ETH will become deflationary after that. If you've heard of the Bitcoin "halvings" where BTC production decreases by half, there have been some models that predict the effect of EIP-1559 on ETH will be 3x of a BTC halving. I wonder if those are some big bets on that.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Sat May 08, 2021 5:44 pm
watchnerd wrote: Sat May 08, 2021 5:37 pm
decapod10 wrote: Sat May 08, 2021 5:16 pm Ether at $3950 👀. Even as a believer in Ethereum I'm wondering how long this can last and if the crash is going to happen soon ,lol
Well, you have that big player who put in an $8K strike price on July options.

And this:

https://www.coindesk.com/vaneck-files-f ... raded-fund
Not sure is related to that investor, but July is important to ETH because that's when EIP-1559 is supposed to start. What happens after that is transaction fee start to get burned, and there is speculation that ETH will become deflationary after that. If you've heard of the Bitcoin "halvings" where BTC production decreases by half, there have been some models that predict the effect of EIP-1559 on ETH will be 3x of a BTC halving. I wonder if those are some big bets on that.
Yes, I'm aware of all of this.

Plus the move to PoS around year end.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

And there it goes. ETH from almost $4200 down to $3700 in a matter of hours, lol
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

decapod10 wrote: Mon May 10, 2021 3:08 pm And there it goes. ETH from almost $4200 down to $3700 in a matter of hours, lol
I hope the drop sticks! DCA'ing in again this week... also this solves my immediate concerns about whether I need to rebalance haha.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Mon May 10, 2021 3:08 pm And there it goes. ETH from almost $4200 down to $3700 in a matter of hours, lol
I was using Coinbase Pro over the weekend and watching the resistance at 4000. It was entertaining.

....and now it's back up to $3900.

The volatility is fascinating.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

watchnerd wrote: Mon May 10, 2021 3:12 pm
decapod10 wrote: Mon May 10, 2021 3:08 pm And there it goes. ETH from almost $4200 down to $3700 in a matter of hours, lol
I was using Coinbase Pro over the weekend and watching the resistance at 4000. It was entertaining.

....and now it's back up to $3900.

The volatility is fascinating.
Yeah, the drop is being eaten up right now, we will see how this turns out. Certainly not for the faint of heart
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Mon May 10, 2021 3:13 pm
Yeah, the drop is being eaten up right now, we will see how this turns out. Certainly not for the faint of heart
I think you can either play it like a trader and try to time entries and exits, or throw away your password for 3 months and check back later.

Casually checking once a day will drive you crazy. ;)
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
rhoms33
Posts: 86
Joined: Tue Jun 27, 2017 8:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by rhoms33 »

decapod10 wrote: Mon May 10, 2021 3:08 pm And there it goes. ETH from almost $4200 down to $3700 in a matter of hours, lol
Oh no! Erased one day of gains! Now only +~420% YTD!

It's the big drops that are really fun... this is just a daily blip.
User avatar
OohLaLa
Posts: 459
Joined: Tue Mar 09, 2021 7:26 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by OohLaLa »

Crypto was not made to be lump-summed into. lol :twisted:

I am slowly moving funds away from an "old" stock-pick and into BTC + ETH (majorily tilted towards ETH). I am doing weekly moves, because the swings are just all over the place. More comfortable with an average.

There is always the risk of a massive surge (or drop), but I am willing to bet it's a smaller risk than these coins flopping about instead.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

OohLaLa wrote: Mon May 10, 2021 3:25 pm Crypto was not made to be lump-summed into. lol :twisted:

I am slowly moving funds away from an "old" stock-pick and into BTC + ETH (majorily tilted towards ETH). I am doing weekly moves, because the swings are just all over the place. More comfortable with an average.

There is always the risk of a massive surge (or drop), but I am willing to bet it's a smaller risk than these coins flopping about instead.
I'm all about the lump sum.

In taxable space, I don't want to have to deal with a bunch of different capital gains timeframes for dripping in an investment.

Especially since Coinbase doesn't have things like SpecID sales.

In tax sheltered, I could be DCA, but why?

If the math doesn't work for the best with stocks, I don't see why it would be improved with crypto.

My crypto money is dead to me, anyway -- I assume I'm going to lose it all and will be pleasantly surprised if I don't.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

watchnerd wrote: Mon May 10, 2021 3:31 pm
OohLaLa wrote: Mon May 10, 2021 3:25 pm Crypto was not made to be lump-summed into. lol :twisted:

I am slowly moving funds away from an "old" stock-pick and into BTC + ETH (majorily tilted towards ETH). I am doing weekly moves, because the swings are just all over the place. More comfortable with an average.

There is always the risk of a massive surge (or drop), but I am willing to bet it's a smaller risk than these coins flopping about instead.
I'm all about the lump sum.

In taxable space, I don't want to have to deal with a bunch of different capital gains timeframes for dripping in an investment.

Especially since Coinbase doesn't have things like SpecID sales.

In tax sheltered, I could be DCA, but why?

If the math doesn't work for the best with stocks, I don't see why it would be improved with crypto.

My crypto money is dead to me, anyway -- I assume I'm going to lose it all and will be pleasantly surprised if I don't.
One thing I'm curious about is how technical "DCA'ing" is. Because I basically just buy as I get cash and to me it feels like I'm basically DCA'ing since I just buy on the regular. But I guess some people approach DCA'ing by keeping cash in a pool and spending from that pool in a more regular manner, so there's always at least some cash sitting around doing nothing? I'm not quite sure. But I also am against the latter approach if that is what DCA'ing really means. You can't do that with an investment with a 200%+ CAGR on average (even if that growth rate eventually will diminish over time). Just makes no sense even if it's volatile. Seems like DCA only makes sense from a psychological point of view.

I don't think the taxes are too complicated, you can export the trade records quite easily I believe although I haven't tried it yet. I may take some profits this year though so I will have to figure it out eventually, but apparently there are some programs that will make sense of crypto transactions for you.
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

txhill wrote: Mon May 10, 2021 3:38 pm

One thing I'm curious about is how technical "DCA'ing" is. Because I basically just buy as I get cash and to me it feels like I'm basically DCA'ing since I just buy on the regular. But I guess some people approach DCA'ing by keeping cash in a pool and spending from that pool in a more regular manner, so there's always at least some cash sitting around doing nothing? I'm not quite sure. But I also am against the latter approach if that is what DCA'ing really means. You can't do that with an investment with a 200%+ CAGR on average (even if that growth rate eventually will diminish over time). Just makes no sense even if it's volatile. Seems like DCA only makes sense from a psychological point of view.
Well, when contrasting vs lump sum, yes, it assumes there is a lump of cash.

If you're DCAing because you don't have a lump sum, that's a different matter.
txhill wrote: Mon May 10, 2021 3:38 pm
I don't think the taxes are too complicated, you can export the trade records quite easily I believe although I haven't tried it yet. I may take some profits this year though so I will have to figure it out eventually, but apparently there are some programs that will make sense of crypto transactions for you.
I have.

The Coinbase reporting is garbage compared to what I get from a brokerage.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Gadget
Posts: 1026
Joined: Fri Mar 17, 2017 1:38 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Gadget »

watchnerd wrote: Mon May 10, 2021 3:31 pm
OohLaLa wrote: Mon May 10, 2021 3:25 pm Crypto was not made to be lump-summed into. lol :twisted:

I am slowly moving funds away from an "old" stock-pick and into BTC + ETH (majorily tilted towards ETH). I am doing weekly moves, because the swings are just all over the place. More comfortable with an average.

There is always the risk of a massive surge (or drop), but I am willing to bet it's a smaller risk than these coins flopping about instead.
I'm all about the lump sum.

In taxable space, I don't want to have to deal with a bunch of different capital gains timeframes for dripping in an investment.

Especially since Coinbase doesn't have things like SpecID sales.

In tax sheltered, I could be DCA, but why?

If the math doesn't work for the best with stocks, I don't see why it would be improved with crypto.

My crypto money is dead to me, anyway -- I assume I'm going to lose it all and will be pleasantly surprised if I don't.
+1

If anything necessitates lump sum in crypto, it's tracking cost basis for taxes. My biggest gripe with crypto is that Coinbase/etc don't track spec ID cost basis and report gains/losses like a stock brokerage. They leave it up to me. Which means lots of little purchases are a nightmare.

Granted, I got lucky and did lump sum in 2020... I'm sure I'd feel differently if I lump summed dog money at 70 cents (not that I would have picked dog money).
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

Gadget wrote: Mon May 10, 2021 5:14 pm +1

If anything necessitates lump sum in crypto, it's tracking cost basis for taxes. My biggest gripe with crypto is that Coinbase/etc don't track spec ID cost basis and report gains/losses like a stock brokerage. They leave it up to me. Which means lots of little purchases are a nightmare.

Granted, I got lucky and did lump sum in 2020... I'm sure I'd feel differently if I lump summed dog money at 70 cents (not that I would have picked dog money).
I'm wondering if regulators / the IRS will force them to get better about this.

Coinbase Pro has a tax disclosure form to fill out.

If they're smart, they'll make the reporting better so people aren't dissuaded from DCAing.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

watchnerd wrote: Mon May 10, 2021 4:02 pm
txhill wrote: Mon May 10, 2021 3:38 pm

One thing I'm curious about is how technical "DCA'ing" is. Because I basically just buy as I get cash and to me it feels like I'm basically DCA'ing since I just buy on the regular. But I guess some people approach DCA'ing by keeping cash in a pool and spending from that pool in a more regular manner, so there's always at least some cash sitting around doing nothing? I'm not quite sure. But I also am against the latter approach if that is what DCA'ing really means. You can't do that with an investment with a 200%+ CAGR on average (even if that growth rate eventually will diminish over time). Just makes no sense even if it's volatile. Seems like DCA only makes sense from a psychological point of view.
Well, when contrasting vs lump sum, yes, it assumes there is a lump of cash.

If you're DCAing because you don't have a lump sum, that's a different matter.
txhill wrote: Mon May 10, 2021 3:38 pm
I don't think the taxes are too complicated, you can export the trade records quite easily I believe although I haven't tried it yet. I may take some profits this year though so I will have to figure it out eventually, but apparently there are some programs that will make sense of crypto transactions for you.
I have.

The Coinbase reporting is garbage compared to what I get from a brokerage.
I guess in that case I'll call what I'm doing lump summing, just on a regular basis. And that's too bad about tax reporting. Coinbase seems to get a lot of negative user reviews on the customer service department already; makes me question whether to keep using them.
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by HomerJ »

watchnerd wrote: Mon May 10, 2021 5:24 pm
Gadget wrote: Mon May 10, 2021 5:14 pm If anything necessitates lump sum in crypto, it's tracking cost basis for taxes. My biggest gripe with crypto is that Coinbase/etc don't track spec ID cost basis and report gains/losses like a stock brokerage. They leave it up to me. Which means lots of little purchases are a nightmare.
I'm wondering if regulators / the IRS will force them to get better about this.
LOL...

So I guess you guys don't mind SOME regulations. Many of them do exist to help out the little guy, you know... Like this one. Most stock brokerages didn't supply that information either until they were forced to, a few years (a decade?) ago...
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
User avatar
watchnerd
Posts: 13614
Joined: Sat Mar 03, 2007 10:18 am
Location: Gig Harbor, WA, USA

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

HomerJ wrote: Mon May 10, 2021 5:41 pm
watchnerd wrote: Mon May 10, 2021 5:24 pm
Gadget wrote: Mon May 10, 2021 5:14 pm If anything necessitates lump sum in crypto, it's tracking cost basis for taxes. My biggest gripe with crypto is that Coinbase/etc don't track spec ID cost basis and report gains/losses like a stock brokerage. They leave it up to me. Which means lots of little purchases are a nightmare.
I'm wondering if regulators / the IRS will force them to get better about this.
LOL...

So I guess you guys don't mind SOME regulations. Many of them do exist to help out the little guy, you know... Like this one. Most stock brokerages didn't supply that information either until they were forced to, a few years (a decade?) ago...
I want more regulations!
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

HomerJ wrote: Mon May 10, 2021 5:41 pm
watchnerd wrote: Mon May 10, 2021 5:24 pm
Gadget wrote: Mon May 10, 2021 5:14 pm If anything necessitates lump sum in crypto, it's tracking cost basis for taxes. My biggest gripe with crypto is that Coinbase/etc don't track spec ID cost basis and report gains/losses like a stock brokerage. They leave it up to me. Which means lots of little purchases are a nightmare.
I'm wondering if regulators / the IRS will force them to get better about this.
LOL...

So I guess you guys don't mind SOME regulations. Many of them do exist to help out the little guy, you know... Like this one. Most stock brokerages didn't supply that information either until they were forced to, a few years (a decade?) ago...
I think most pro-crypto folks are very much in favor of regulation. Regulation brings greater stability and confidence to the market. Luckily the top regulator at the SEC actually understands blockchain quite well.
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by HomerJ »

txhill wrote: Mon May 10, 2021 5:53 pmI think most pro-crypto folks are very much in favor of regulation. Regulation brings greater stability and confidence to the market. Luckily the top regulator at the SEC actually understands blockchain quite well.
So decentralization isn't the goal anymore?

Can governments create rules that the Ethereum developers have to follow? We're okay with that now?

I mean, I am... But I'm PRETTY SURE that wasn't the story being pushed here originally when talking about how great crypto-currency is.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
JBTX
Posts: 11227
Joined: Wed Jul 26, 2017 12:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by JBTX »

HomerJ wrote: Mon May 10, 2021 6:11 pm
txhill wrote: Mon May 10, 2021 5:53 pmI think most pro-crypto folks are very much in favor of regulation. Regulation brings greater stability and confidence to the market. Luckily the top regulator at the SEC actually understands blockchain quite well.
So decentralization isn't the goal anymore?

Can governments create rules that the Ethereum developers have to follow? We're okay with that now?

I mean, I am... But I'm PRETTY SURE that wasn't the story being pushed here originally when talking about how great crypto-currency is.
It is a rapidly evolving narrative. Bitcoin was a future currency, now it's a store of value, and even that may be falling out of favor. Now etherium seems to be the future of crypto currency...for today. Regulation was bad, until it becomes inevitable, then it will be good.
JBTX
Posts: 11227
Joined: Wed Jul 26, 2017 12:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by JBTX »

OohLaLa wrote: Mon May 10, 2021 6:30 pm
JBTX wrote: Mon May 10, 2021 6:29 pm
HomerJ wrote: Mon May 10, 2021 6:11 pm
txhill wrote: Mon May 10, 2021 5:53 pmI think most pro-crypto folks are very much in favor of regulation. Regulation brings greater stability and confidence to the market. Luckily the top regulator at the SEC actually understands blockchain quite well.
So decentralization isn't the goal anymore?

Can governments create rules that the Ethereum developers have to follow? We're okay with that now?

I mean, I am... But I'm PRETTY SURE that wasn't the story being pushed here originally when talking about how great crypto-currency is.
It is a rapidly evolving narrative. Bitcoin was a future currency, now it's a store of value, and even that may be falling out of favor. Now etherium seems to be the future of crypto currency...for today. Regulation was bad, until it becomes inevitable, then it will be good.
Here we go again with the debates with ghosts, apparently... Some of the folks on this forum have created this stereotypical, anarcho-capitalist, Maximalist boogeyman and keep arguing with it.

You literally are exchanging with people that are saying they are ok with regulating the space. I am all for consumer and investor protections, as well. It was one of the major factors (increased legitimacy and oversight) that got me to dive in, versus a few years ago. There are still plenty of scams (especially with random "altcoins"), boiler-room quality in service and lack of transparency, so there's definitely room for improvement on that front.
Hey, I'm all in. My $500 coinbase pro account in BTC and ETH is now over $600!!! To the moon!!
User avatar
OohLaLa
Posts: 459
Joined: Tue Mar 09, 2021 7:26 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by OohLaLa »

watchnerd wrote: Mon May 10, 2021 5:24 pm I'm wondering if regulators / the IRS will force them to get better about this.

Coinbase Pro has a tax disclosure form to fill out.

If they're smart, they'll make the reporting better so people aren't dissuaded from DCAing.
So I am not crazy, then... Same thing on a Canadian exchange I use. Reporting is horrible. You don't even have things like average price. :oops:
Gadget
Posts: 1026
Joined: Fri Mar 17, 2017 1:38 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Gadget »

txhill wrote: Mon May 10, 2021 5:29 pm
watchnerd wrote: Mon May 10, 2021 4:02 pm
txhill wrote: Mon May 10, 2021 3:38 pm

One thing I'm curious about is how technical "DCA'ing" is. Because I basically just buy as I get cash and to me it feels like I'm basically DCA'ing since I just buy on the regular. But I guess some people approach DCA'ing by keeping cash in a pool and spending from that pool in a more regular manner, so there's always at least some cash sitting around doing nothing? I'm not quite sure. But I also am against the latter approach if that is what DCA'ing really means. You can't do that with an investment with a 200%+ CAGR on average (even if that growth rate eventually will diminish over time). Just makes no sense even if it's volatile. Seems like DCA only makes sense from a psychological point of view.
Well, when contrasting vs lump sum, yes, it assumes there is a lump of cash.

If you're DCAing because you don't have a lump sum, that's a different matter.
txhill wrote: Mon May 10, 2021 3:38 pm
I don't think the taxes are too complicated, you can export the trade records quite easily I believe although I haven't tried it yet. I may take some profits this year though so I will have to figure it out eventually, but apparently there are some programs that will make sense of crypto transactions for you.
I have.

The Coinbase reporting is garbage compared to what I get from a brokerage.
I guess in that case I'll call what I'm doing lump summing, just on a regular basis. And that's too bad about tax reporting. Coinbase seems to get a lot of negative user reviews on the customer service department already; makes me question whether to keep using them.
No, I think Coinbase actually does tax reporting the best out of all crypto exchanges, which is just pathetic. What I'm saying is that the other exchanges are even worse.

Coinbase at least outputs a reasonable csv file I can make sense of. Binance.us outputs this stupid spreadsheet that I have to mess with to make sense of. I got scared to even buy from other exchanges I signed up for because I couldn't even tell what the heck they did for tax reporting and cost basis. I'm pretty sure some of them just tell you it's up to you, record all your transactions...
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

HomerJ wrote: Mon May 10, 2021 6:11 pm
txhill wrote: Mon May 10, 2021 5:53 pmI think most pro-crypto folks are very much in favor of regulation. Regulation brings greater stability and confidence to the market. Luckily the top regulator at the SEC actually understands blockchain quite well.
So decentralization isn't the goal anymore?

Can governments create rules that the Ethereum developers have to follow? We're okay with that now?

I mean, I am... But I'm PRETTY SURE that wasn't the story being pushed here originally when talking about how great crypto-currency is.
It depends who you ask. Usually when you are talking about decentralizing a network, you are talking about who controls the network and where the nodes are located, not necessarily government regulations or lack thereof. I would say most people are for decentralization of a network, though again even this is not absolute. Binance Smart Chain is actually pretty centralized relatively speaking vs Ethereum for example, yet it is still the #2 smart contract blockchain behind Ethereum.

You will find a wide range of opinions regarding desire for government regulations in crypto (which again is not really the same thing as decentralized blockchain). But I think you are generally correct that most of the original backers of crypto prefer less regulation, but that does not mean that is what the future of crypto will look like. I'm personally not particularly against regulation in crypto for example, but I'm also not a long time crypto person either.
am
Posts: 4233
Joined: Sun Sep 30, 2007 9:55 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by am »

Tried to buy 10 bucks of shiba coin on uniswap and network fees were 379 dollars :shock: Not sure how this will all work out? Who uses the etherium network these days?
luckyducky99
Posts: 415
Joined: Sun Dec 15, 2019 6:47 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by luckyducky99 »

watchnerd wrote: Mon May 10, 2021 10:20 pm HelloKittyShibaLoveCoin
I LOL’d. I would totally buy one. That’s how this works right?

JK obviously. I only buy BogleCoin.
User avatar
OohLaLa
Posts: 459
Joined: Tue Mar 09, 2021 7:26 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by OohLaLa »

I have to read up more on the whole Ripple VS SEC lawsuit currently in courts, but it's a solid example of how the government is already getting involved. They are basically arguing that Ripple did an unlawful securities offering (coin offering) years ago.

It will be very interesting to see how that evolves, as it would probably set precedent in how different projects can be defined (securities, currencies, or something else). Ripple is already trying to use Gensler's previous publicly-available comments on various projects (BTC, ETH) in their favor.
SlowMovingInvestor
Posts: 3486
Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

Prahasaurus wrote: Mon May 10, 2021 10:43 pm That's why you get .1% interest from your bank and are happy for it, you even defend it! They need to ensure that type of slave mentality persists, and the people at the top can continue to skim off the vast majority of the profits.
Aha, but I can (if I were so minded) get a mortgage at around 2%, and a margin loan (which is the equivalent of what AAVE does) at Ibroker for around 1- 1.25%. I just checked and borrowing rates on USDC at AAVE are 12.6 % !

So maybe the real slave mentality is those debt slaves who are willing to pay those rates on Celsius or AAVE loans :happy. 12.6% certainly sounds like slavery to me - US mortgage rates haven't been that high since maybe 1985 ! Yes, I know these are likely very short term loans - but the difficulty in getting long term stable loans with margined collateral at AAVE is a bug. not a feature.

[ FWIW, even credit unions, which are small and mutually owned aren't typically offering better rates widely. They're hardly the hated GS, which ironically has one of the better HYSA rates at Marcus. Certainly we could have more efficiency, but there's no magic that's going to get a depositor high rates when borrowing rates are so low. ]
Last edited by SlowMovingInvestor on Tue May 11, 2021 12:04 am, edited 2 times in total.
TheCleverest
Posts: 66
Joined: Sat Dec 26, 2015 10:14 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by TheCleverest »

I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
No use in being clever - have to be the cleverest
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Marseille07 »

TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
How do you buy puts on the coins? I'd be interested to explore if such a thing is possible.
Prahasaurus
Posts: 1028
Joined: Fri Mar 29, 2019 1:02 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Prahasaurus »

OohLaLa wrote: Mon May 10, 2021 11:19 pm I have to read up more on the whole Ripple VS SEC lawsuit currently in courts, but it's a solid example of how the government is already getting involved. They are basically arguing that Ripple did an unlawful securities offering (coin offering) years ago.

It will be very interesting to see how that evolves, as it would probably set precedent in how different projects can be defined (securities, currencies, or something else). Ripple is already trying to use Gensler's previous publicly-available comments on various projects (BTC, ETH) in their favor.
Don't know the legal implications, but Ripple is, in my opinion, a total scam. It's not decentralized in any meaningful sense. And they are simply releasing and dumping their tokens on gullible speculators. Typically timing faux marketing releases just before they dump their tokens. The SEC has documented this clearly.

If you are investing in XRP, you only have yourself to blame when it all goes south, with the info that is now publicly available.
Asset Allocation: VT
SlowMovingInvestor
Posts: 3486
Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

Marseille07 wrote: Tue May 11, 2021 12:09 am
TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
How do you buy puts on the coins? I'd be interested to explore if such a thing is possible.
There are futures available on the CME for BTC and ETH.

There are also the Grayscale trusts like GBTC, but they're OTC so I doubt they have public options.
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
Crypto is already too risky for Bogleheads, they are definitely not going to be shorting crypto, lol.

There is a lot of shorting in crypto, but it is usually done by people who invest in crypto as well. They usually take bets on very short term action (like hours or days). It's already extremely dangerous for people who study crypto to be shorting crypto, let alone people who are not well educated in crypto.

I've pasted the top 25 cryptocurrencies by market cap and pasted them below, along with the %gain/loss over the past 3 months.

"BTC
Bitcoin" 24.18%
"ETH
Ethereum" 126.11%
"BNB
Binance Coin" 546.37%
"DOGE
Dogecoin" 535.36%
"USDT
Tether" -0.08%
"ADA
Cardano" 125.71%
"XRP
XRP" 203.64%
"DOT
Polkadot" 62.18%
"BCH
Bitcoin Cash" 176.33%
"LTC
Litecoin" 108.24%
"LINK
ChainLink" 76.15%
"UNI
Uniswap" 85.07%
"XLM
Stellar" 61.94%
"USDC
USD Coin" 0.01%
"SHIB
SHIBA INU" 0.00%
"ETC
Ethereum Classic" 1027.11%
"VET
VeChain Thor" 520.57%
"SOL
Solana" 413.41%
"FIL
Filecoin" 312.96%
"OKB
OKB" 353.91%
"WBTC
Wrapped Bitcoin" 24.78%
"THETA
Theta Token" 279.84%
"EOS
EOS" 141.00%
"TRX
TRON" 191.83%
"BUSD
Binance USD" -0.79%

Look at those gains and imagine if you had tried to short those coins anytime in the last 3 months, it is likely you would have been in a world of hurt. Ignoring the stable coins, BTC is the worst performer at +24%. Shiba shows at 0% for some reason, but it's actually some ridiculously high number like 70000% or something.
Last edited by decapod10 on Tue May 11, 2021 12:19 am, edited 1 time in total.
Prahasaurus
Posts: 1028
Joined: Fri Mar 29, 2019 1:02 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Prahasaurus »

SlowMovingInvestor wrote: Mon May 10, 2021 11:53 pm
Prahasaurus wrote: Mon May 10, 2021 10:43 pm That's why you get .1% interest from your bank and are happy for it, you even defend it! They need to ensure that type of slave mentality persists, and the people at the top can continue to skim off the vast majority of the profits.
Aha, but I can (if I were so minded) get a mortgage at around 2%, and a margin loan (which is the equivalent of what AAVE does) at Ibroker for around 1- 1.25%. I just checked and borrowing rates on USDC at AAVE are 12.6 % !

So maybe the real slave mentality is those debt slaves who are willing to pay those rates on Celsius or AAVE loans :happy. 12.6% certainly sounds like slavery to me - US mortgage rates haven't been that high since maybe 1985 ! Yes, I know these are likely very short term loans - but the difficulty in getting long term stable loans with margined collateral at AAVE is a bug. not a feature.

[ FWIW, even credit unions, which are small and mutually owned aren't typically offering better rates widely. They're hardly the hated GS, which ironically has one of the better HYSA rates at Marcus. Certainly we could have more efficiency, but there's no magic that's going to get a depositor high rates when borrowing rates are so low. ]
I can borrow from Aave now, no KYC, the process takes about 5 minutes. Why do we have a credit card industry when it's just so easy to borrow at 1-2%? Are you serious?

I have no doubt Bogleheads have access to cheap capital if they are willing to spend months filling out the forms. And hedge funds have access to even cheaper capital. It's just the 99% of Americans that don't seem to have those options. And 99.99% of the rest of the world.
Asset Allocation: VT
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Marseille07 »

SlowMovingInvestor wrote: Tue May 11, 2021 12:15 am
Marseille07 wrote: Tue May 11, 2021 12:09 am
TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
How do you buy puts on the coins? I'd be interested to explore if such a thing is possible.
There are futures available on the CME for BTC and ETH.

There are also the Grayscale trusts like GBTC, but they're OTC so I doubt they have public options.
I took a quick glance but the futures market seems crazy. They're trading July at 3969 for ETH...if I were to sell futures, I'm talking about 6000~7000 here for July :D These sellers look really crazy to me.
TheCleverest
Posts: 66
Joined: Sat Dec 26, 2015 10:14 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by TheCleverest »

Marseille07 wrote: Tue May 11, 2021 12:09 am
TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
How do you buy puts on the coins? I'd be interested to explore if such a thing is possible.
Great question. Option trading exists. I'm not sure if you are a US or non-US investor. See LedgerX for US and the following others for non-US Deribit, FTX,

I just found out there are Bitcoin micro futures recently. For those interested in learning more the symbol is MBT.
Last edited by TheCleverest on Tue May 11, 2021 12:34 am, edited 1 time in total.
No use in being clever - have to be the cleverest
SlowMovingInvestor
Posts: 3486
Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

Prahasaurus wrote: Tue May 11, 2021 12:18 am
I can borrow from Aave now, no KYC, the process takes about 5 minutes. Why do we have a credit card industry when it's just so easy to borrow at 1-2%? Are you serious?

I have no doubt Bogleheads have access to cheap capital if they are willing to spend months filling out the forms. And hedge funds have access to even cheaper capital. It's just the 99% of Americans that don't seem to have those options. And 99.99% of the rest of the world.
Are you seriously asking that question ?

The reason people borrow at higher rates from credit card companies is that they don't have shares and margin accounts to get loans (*). Or they don't have homes they can get HELOCs against. Months filling forms ? Changing my account into a margin account at Ibroker was approved in maybe 2 hrs. I've never actually got margin from them, but I think it's instant from this point on.

The 99 % (actual I'd guess it's significantly less than that) of Americans or 99.9% of the rest of the world who don't have those options also DON'T have crypto to put up as collateral. Margin loans (which ARE collateralized and can be instantly liquidated) can charge much lower rates because they have collateral that can be priced and liquidated instantly. And Ibroker's margin rates are indeed 1-1.25%.

(*) It's possible that some share owners don't realize they can get margin loans against them or don't want to take the risk of liquidation. But the problem then is lack of financial literacy or risk taking appetite -- which would prevent them from using crypto collateral.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Marseille07 »

TheCleverest wrote: Tue May 11, 2021 12:33 am
Marseille07 wrote: Tue May 11, 2021 12:09 am
TheCleverest wrote: Mon May 10, 2021 11:58 pm I'm genuinely curious...for those who believe some coins will go down in value...why don't you attempt to profit from this downward movement (ie buy puts, futures, etc)? Not trying to be confrontational...genuinely curious. And I also have thought about trying to profit from a downward movement. TY
How do you buy puts on the coins? I'd be interested to explore if such a thing is possible.
Great question. Option trading exists. I'm not sure if you are a US or non-US investor. See LedgerX for US and the following others for non-US Deribit, FTX,

I just found out there are Bitcoin micro futures recently. For those interested in learning more the symbol is MBT.
I'm just absolutely stunned by the pricing of futures here. Like, what are these people selling? They really want to sell MBT at 57270 for August???

Like ETH, I just don't see how I can sell short at the price I want (like, 100K for BTC for August for example). This is really crazy stuff.
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by HomerJ »

Prahasaurus wrote: Tue May 11, 2021 12:18 am
SlowMovingInvestor wrote: Mon May 10, 2021 11:53 pm
Prahasaurus wrote: Mon May 10, 2021 10:43 pm That's why you get .1% interest from your bank and are happy for it, you even defend it! They need to ensure that type of slave mentality persists, and the people at the top can continue to skim off the vast majority of the profits.
Aha, but I can (if I were so minded) get a mortgage at around 2%, and a margin loan (which is the equivalent of what AAVE does) at Ibroker for around 1- 1.25%. I just checked and borrowing rates on USDC at AAVE are 12.6 % !

So maybe the real slave mentality is those debt slaves who are willing to pay those rates on Celsius or AAVE loans :happy. 12.6% certainly sounds like slavery to me - US mortgage rates haven't been that high since maybe 1985 ! Yes, I know these are likely very short term loans - but the difficulty in getting long term stable loans with margined collateral at AAVE is a bug. not a feature.

[ FWIW, even credit unions, which are small and mutually owned aren't typically offering better rates widely. They're hardly the hated GS, which ironically has one of the better HYSA rates at Marcus. Certainly we could have more efficiency, but there's no magic that's going to get a depositor high rates when borrowing rates are so low. ]
I can borrow from Aave now, no KYC, the process takes about 5 minutes. Why do we have a credit card industry when it's just so easy to borrow at 1-2%? Are you serious?

I have no doubt Bogleheads have access to cheap capital if they are willing to spend months filling out the forms. And hedge funds have access to even cheaper capital. It's just the 99% of Americans that don't seem to have those options. And 99.99% of the rest of the world.
To borrow from AAVE requires 1.25x-2.5x collateral. There is no way this helps the 99% of Americans or 99.9% of the rest of the world that you claim to care about. An average American who needs to borrow $5000 for a short-term loan doesn't have $7,000 in collateral. If they did, they wouldn't need to borrow.

AAVE requires more collateral than the loan itself, and you STILL pay 12.6%, which is pretty close to credit card rates anyway. The average American has a credit score of 711, which translates to a credit card rate of 16.5%. But a score of 720 gets you 13.5% interest rate on a credit card.

And in any case, SlowMovingInvestor wasn't even talking about credit cards...

He was talking about mortgages, which many Americans can qualify for (not just the 1% or hedge funds).

And he was talking about margin loans at brokers.

Which is really the correct comparison to AAVE. Both margin loans at brokers and AAVE require collateral. But brokerages require less collateral, and their interest rates are indeed in the 1%-2% range, not the 12.6% that AAVE charges.

You way over-reacted to his post with false comparisons. He was correct.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Prahasaurus
Posts: 1028
Joined: Fri Mar 29, 2019 1:02 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Prahasaurus »

SlowMovingInvestor wrote: Tue May 11, 2021 12:34 am
Prahasaurus wrote: Tue May 11, 2021 12:18 am
I can borrow from Aave now, no KYC, the process takes about 5 minutes. Why do we have a credit card industry when it's just so easy to borrow at 1-2%? Are you serious?

I have no doubt Bogleheads have access to cheap capital if they are willing to spend months filling out the forms. And hedge funds have access to even cheaper capital. It's just the 99% of Americans that don't seem to have those options. And 99.99% of the rest of the world.
Are you seriously asking that question ?

The reason people borrow at higher rates from credit card companies is that they don't have shares and margin accounts to get loans (*). Or they don't have homes they can get HELOCs against. Months filling forms ? Changing my account into a margin account at Ibroker was approved in maybe 2 hrs. I've never actually got margin from them, but I think it's instant from this point on.

The 99 % (actual I'd guess it's significantly less than that) of Americans or 99.9% of the rest of the world who don't have those options also DON'T have crypto to put up as collateral. Margin loans (which ARE collateralized and can be instantly liquidated) can charge much lower rates because they have collateral that can be priced and liquidated instantly. And Ibroker's margin rates are indeed 1-1.25%.

(*) It's possible that some share owners don't realize they can get margin loans against them or don't want to take the risk of liquidation. But the problem then is lack of financial literacy or risk taking appetite -- which would prevent them from using crypto collateral.
Overcollateralized loans are just the beginning. I'm sure other entities will partner with Aave (read: integrate to Aave) and offer loans themselves, using Aave as the bank. 3rd parties (centralized at first, but later decentralized) that can do credit checks, etc. DeFi is just over 1 year old, and you expect it to have all the services as our existing financial system? LOL! In one year Aave has gone from 0 to 18 billion USD locked in its protocol, a truly amazing achievement. And shows the market need.

What has been built over the past year (granted, the development typically started around 2017/18) is just unbelievable, and I can't wait to see how it all evolves in the coming decade. So glad I'm an early investor in the future of finance!
Asset Allocation: VT
User avatar
LadyGeek
Site Admin
Posts: 95686
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by LadyGeek »

I removed a number posts conjecturing on internet / government regulation of bitcoin. The discussion was derailed (political policy, conspiracy theory). As a reminder, see: Non-actionable (Trolling) Topics
If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include:
  • US or world economic, political, tax, health care and climate policies
  • conspiracy theories of any type
  • discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about the stupid financial things you have done.
Please stay on-topic, which is bitcoin increasing in value.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
SlowMovingInvestor
Posts: 3486
Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

Prahasaurus wrote: Tue May 11, 2021 1:07 am DeFi is just over 1 year old, and you expect it to have all the services as our existing financial system? LOL! In one year Aave has gone from 0 to 18 billion USD locked in its protocol, a truly amazing achievement. And shows the market need.

What has been built over the past year (granted, the development typically started around 2017/18) is just unbelievable, and I can't wait to see how it all evolves in the coming decade. So glad I'm an early investor in the future of finance!
I didn't say that I expected it to have the same services. I'm simply pointing out that you should do an apples to oranges comparison. If low HYSA rates are a 'slave mentality', then very high borrow rates are probably far 'more slavish' (*). And the best comparison to AAVE/Celsius is not credit loans, but margin loans, which are 1-1.25% at Interactive Broker for USD. I believe even lower rates for Euros. Not at all a good comparison for AAVE @ 12.6%. And it doesn't take several months, as you implied, to get margin loans (or even HELOCs).

I welcome innovation, whether it's tech or fintech. Heck, I did some work on digital cash well before BTC. But again, there's no magic to get you 8.6% on deposits when mortgages are around 2-2.75%, car loans around 2.5-3% (and that collateral is not so easily liquidated either).
Last edited by SlowMovingInvestor on Tue May 11, 2021 9:36 am, edited 1 time in total.
Locked