Friday, January 3, 2020

Collecting my Crypto Interests (Dec 2019) on my $170,000 account

It's that time of the month again. Sorry I am late, I was busy at the start of the month.

I'll try to follow the same format as last month, but of course with the updated figures.

Since the start of Dec, BlockFi actually has not done anything fundamentally different from the previous month.

However, I would like to clarify that the $10,000 daily trading limit on the platform across the different currencies actually carry 0% fees, so it is a perfect place to rebalance crypto!

Here's the rates, which are the same as the previous month.

6.2% for up to 10 BTC.
4.1% for up to 1000 ETH.
8.6% with not limits for GUSD.

Simple and straightforward.

Since my 1000 ETH balance last month was not deposited on the 1st day of the month, mathematically my expected interest is lower than the "perfect" 4.1% x 1000 / 12 of 3.416 ETH interest.

Here is the actual interest payment for the month of Dec.

2.916 ETH at today's current rate is ~$500 SGD. Kind of shit, but hey the price of ETH has been shit lately, so that's to be expected, haha!

I must say, the upgraded interface is a lot more pleasant to look at, more modern and professional.

One thing that I did mention last month is that I am planning to fill up my 10 BTC limit as well. So since my ETH in my Blockfi account in excess of 1000 ETH is earning only 0.5%, I decided to convert the excess to BTC so that BTC can earn 6.2% instead. So here we go, a solid 1000 ETH balance. Well, except the conversion engine was slightly a bit shit and the rate moved while I was doing the conversion, so I have to deal with this fugly ass 999.966 ETH balance instead. Lol, oh well.

$126,435 USD is about $170,000 SGD.

Anyway, that move to convert excess ETH to BTC means I get a nice 5.7% yield pickup while also "diverisfying" away from my heavy ETH position. In absolute dollar returns over a long period, this early conversion to BTC might actually lower my returns, but as an isolated portfolio, I think it is fine. It's nice to mentally know that I am working towards building a "capital base" of 10 BTC / 1000 ETH and I that I may one day possibly just live off the interests. And mind you, what I have here in BlockFi is but a small portion of my total portfolio.

The worst thing about this strategy so far is of course crypto just naturally being a shit. ETH price has collapsed from $180+ USD to about $120+ USD today. Oh well, what can you do about it? Does the volatility surprise you? Welcome to crypto.

Of course, the workaround to this is to farm and eat the ridiculously high 8.6% yields in GUSD and not worry about the volatility. In fact, I have very reliable information that USDC will be available as a deposit and interest option in Blockfi soon. I think USDC deposits is a fantastic idea, and I will probably do that as well.

Initially, I was not very appreciative of the new trading interface that Blockfi had launched. However, I think I was thinking about it the wrong way. The trading interface is more to allow users to rebalance their portfolio, especially management of the interests. If you want to convert a sizeable chunk of your portfolio from one asset to another, you should probably use an actual exchange for that.

With USDC coming, I am looking forward to the time when I can "forward" all my interests from BTC/ETH collected for the month, and convert it to USDC to actually drawn down for my expenses.

Of course, this is front running a future feature, so I guess when it does get finally integrated, I'm going to be doing a long post about how you can get money into Blockfi to earn the high yield on stablecoins, and also how you can get it out. It is stupid if you can only put money in, but you don't know how to take it anyway.

Anyway, if you have idle BTC and ETH just sitting around in exchanges or your hardware wallet, and you don't mind assuming some custodial risks for interests, then this is my ref link if you wanna be a degen like me. Or if you're smart enough to navigate into GUSD before the release of USDC and prefer that instead, then power to you.

There's lots of risk in leaving your money with a custodian. This goes even for the traditional finance space. If humji please don't do. BlockFi tomorrow run road, what will I do? Just move on with life lor. Lan lan suck thumb, what can I do? So please don't put all your eggs into one basket. This is simple and basic risk management.

That is all. I am currently thinking of making a Blockfi series because I think it is the most actionable thing that people would want to do, and also because I have a ref link (yes, obviously I am driven also by personal interests, but hell I am a happy customer, as you can see above lol).

I know many people are hesitant to buy volatile crypto to earn 4-6% but possibly lose much much more. If you don't already own crypto, that is probably a stupid thing to do.

But I also know that there are many people who are scratching their heads about how to earn 8% in USD stablecoins, and honestly I think that using BlockFi is a perfectly good strategy if you understand the risks involved and are willing to assume it.

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