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Variable Interest Rates And Diamond Hands

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Cesc0410
@chekohler
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3 min read

Hey Jessinvestors

I recently spoke about the importance of interest rates in the Bitcoin market and how it can supercharge your dollar-cost averaging. Those who are lucky enough to be able to hold on to their coins long term take a considerable amount of risk, especially during bull markets.

When the market is running away in price, a holder has to choose, do they liquidate and cash out, or do they continue to hold and receive their interest in fewer sats at a higher dollar value.

In a bear market, the decision seems a bit easier, well, at least it is for me; I am happy to receive a lower dollar value but more sats.

HODLing seems like a simple strategy; you buy something and wait for it to appreciate at a price you can't resist and sell. For those with conviction, they get rewarded when the price shoots up, and they can take profits.

But what if your conviction is long term? That's where interest rates come in, or at least I think they do.

Bulls bring out the snakes

In a bull market, everyone is a genius; I can already see how the type of content has changed on here over the past few months. The shilling is back baby, half of these so-called shillers weren't even here for the bear market, lord knows what they were doing, but now they are among the most vocal.

These snake oil shillers will get you to buy their shit coin and part with your precious BTC not for your benefit but for them. They are the early bag holders or the referral link spammers.

People fall for them all the time; then I wonder how you had such conviction in Bitcoin. If you thought it was a good trade, why would you part with it?

I understand that everyone's financial situation is different, but I see so many have greed take over. Bitcoin produces insane returns. We've seen that to chase anything more is total greed, and you'll most likely get burned.

The burned ones never talk about it, only the ones who got in on the play early, so you get a biased view of altcoins.

Rewards for your liquidity

The reason for my tangent above is that others are tempting you to sell your Bitcoin. It's not only the fiat value temptation to sell and enjoy your life but also altcoins selling you on higher returns. This is why BTC has an interest rate to keep an additional floor of liquidity, supporting ht price.

One support level would be the cost to mine and the other would be the interest rate return. As long as my liquidity produces a better interest rate than anywhere else in traditional finance, why would I leave?

Mixing up my rates

At the moment, there are several CE-FI platforms one can use to earn interest on your Bitcoin.

  • BlockFi
  • Celsius Network
  • Nexo
  • Crypto.com
  • Luno

As well as other DE-FI platforms.

The reason I mix up my BTC interest is that these tools compete with one another for capital, and therefore interest rates change. By having an allocation to all of them, I am able to benefit from the competition between them.

I also de-risk against the probability of one of these platforms collapsing which cannot be understated.

Again, it's all about putting your little money workers, to work for you and you shouldn't let them all work in the same place.

Have your say

What do you good people of HIVE think?

So have at it, my Jessies! If you don't have something to comment, "I am a Jessie."

Let's connect

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