Hey all, been gone for many years. Had two kids which really drained the time and motivation I used to have for MS. Looks like it's not as busy around these parts as it once was; but, I'm still interested in any expert opinions from you folks.
I've been looking into the DeFi crypto banking world as well as the centralized crypto "banks" recently as a place to store some of my crypto assets and be paid interest while I HODL. Specifically, I am attracted to the ease of use of these centralized firms like Celsius and Blockfi. The interest rates on crypto are attractive at around 5-6%; but, what has really piqued my interest and what this post is about is the yield, 10%, offered on stablecoins like USDC, GUSD, etc which are tied directly to the US Dollar. Tell me why I shouldn't convert a large portion of my cash - currently sitting in a traditional savings account paying less than 1% - to a stablecoin savings account paying 10% APY.
I think the first thing that comes to mind is security. There's no FDIC insurance, no path to recovering stolen crypto coins, etc. But, if I can become comfortable with the security aspect, is there any other glaring reasons why not to chase this yield?
I'm looking at Celsius and BlockFi as the industry leaders in this space. These are not shady, small time firms. BlockFi is registered in London and headquartered in New York. Celsius is an American startup fully regulated by the US. Celsius has $6B+ AUM and Blockfi has $8B+ AUM. Obviously, security is paramount to both firms. Celsius assets are actually insured by their custodians however they earn the interest by lending out the assets. When lent, they are not insured, but they do operate with a 150% collateral requirement (alternate asset class) for all loans.
I'd likely convert my dollars to USDC. While Tether looks to have stabilized nicely, I don't trust it at all after I was involved in crypto back in 2016-2017 and watched it rushed to market and not backed by real $$.
Thanks for any insight, Mike
I've been looking into the DeFi crypto banking world as well as the centralized crypto "banks" recently as a place to store some of my crypto assets and be paid interest while I HODL. Specifically, I am attracted to the ease of use of these centralized firms like Celsius and Blockfi. The interest rates on crypto are attractive at around 5-6%; but, what has really piqued my interest and what this post is about is the yield, 10%, offered on stablecoins like USDC, GUSD, etc which are tied directly to the US Dollar. Tell me why I shouldn't convert a large portion of my cash - currently sitting in a traditional savings account paying less than 1% - to a stablecoin savings account paying 10% APY.
I think the first thing that comes to mind is security. There's no FDIC insurance, no path to recovering stolen crypto coins, etc. But, if I can become comfortable with the security aspect, is there any other glaring reasons why not to chase this yield?
I'm looking at Celsius and BlockFi as the industry leaders in this space. These are not shady, small time firms. BlockFi is registered in London and headquartered in New York. Celsius is an American startup fully regulated by the US. Celsius has $6B+ AUM and Blockfi has $8B+ AUM. Obviously, security is paramount to both firms. Celsius assets are actually insured by their custodians however they earn the interest by lending out the assets. When lent, they are not insured, but they do operate with a 150% collateral requirement (alternate asset class) for all loans.
I'd likely convert my dollars to USDC. While Tether looks to have stabilized nicely, I don't trust it at all after I was involved in crypto back in 2016-2017 and watched it rushed to market and not backed by real $$.
Thanks for any insight, Mike