Quote from: d_eddie on March 29, 2022, 09:48:10 PM

Quote from: cAPSLOCK on March 29, 2022, 07:52:51 PM

Quote from: BobLawblaw on March 29, 2022, 07:43:40 PM

... earlier ITT: Using Bitcoin-collateralized loans to buy more Bitcoin.

Risky AF. Given how lucky I have been in life, I'm not sure I have the fortitude (even with the plate-training) to handle a strategy like that - even with 5%-10% of my stash.

Seems like the down-side risk is way too high IMO.

Ultimately, I get that NGU on a long-enough timeline, but the short-term volatility might fuck you hard without lube, and that's never fun.

Especially if they haven't enema'd and showered beforehand, if you catch my meaning...

This is something I am also facing, and kind of feel like you do. I am going to need to come up with some cheddar due to things going on in my world... This is one option. Borrow against my stack? Or just sell some.

Or another option is a line of credit... a loan not collateralize against the corn, but backed up by it for me. In other words... get a loan and then HOPEFULLY pay it off with a smaller amount of Bitcoin than it would have taken to do right now.

But on the other hand there is ALWAYS the possibility that BTC goes down, and I lose that bet.

Meh.

I feel you both. I've been thinking for a long time, trying to find a way to live off corn without actually spending corn. It seems impossible until you realize it only depends fundamentally on a NGU state.

Collateralized debt that can be margin called when NGD is risky. I don't like the looks of it. However, clever system might be devised in the (hopefully near) future when there are enough happy bitcoiners to create a demand.

Debt that is backed by corn, with an implicit bet that NGU (with some corn erosion if not). This could be viable if the time horizon is long enough - say, over 4 years? That's the first time range that came to my mind for some reason. Especially if the loan can be repaid earlier with a discount on the unpaid interest (for unpaid time), this really can get workable. It is tantamount to a long position with low margin on perpetual futures. If the corn goes up seriously, you shave off as much as needed to pay out the loan.

The system that feels the most comfortable to me uses out of the money covered call options. You write (sell) some call options now, promising you'll sell the corn at a certain strike price on a certain date. You get paid a premium for this promise. You get the premium immediately. I would write a call option @300k today, but since the strike price is so preposterously out of the money, the premium would be slim. On expiry, two things can happen: either the price is below 300k, so no one will ask you to buy at that price, and you're good; or the price is above that, so you are forced to sell for "only" 300k per coin.

There might be other ways. Or better said, I'm sure there are - but some are risky (DeFi trickery involved), and as for the others, I'm willing to hear and learn. Which better place for that than the WO?

Of course without having specifics, I am having some trouble compeletly relating to the dilemma that some guys seem to be having in regards to how to potentially manage our bitcoin holdings.

Surely, few of us would be anywhere close to Michael Saylor's ability to potentially being able to negotiate favorable bitcoin leveraging terms - such as loaning our bitcoin... including his last debt was like interest only for the term of the loan.. and surely we already know that his company sufficiently cashflows to cover the interest payments of his most recent loans and all his other various debt instruments that he has employed in recent times..... of course, the more and more kinds of debt that he adds on causes some additional concerns about the extent to which he and his company would be put at risk for very long negative and/or flat bitcoin performance periods, but the way that most of his debt instruments are structured causes those concerns about if bitcoin would end up being lower priced than today on a 4 year timeline or longer.. so the real severity of the question does not come due for more than 4 years in regards to most of his debt structuring.

So part of my point would be whether guys would even be able to be considering their cashflow and/or abilities to structure debt even close to Michael Saylor.. and I would also say fuck you to a vast majority of the current ways to structure debt through the bitcoin services that are not really giving favorable terms to bitcoiners.. so to even justify entering into any of the various debt services, the bitcoin performance is going to have to be able to exceed the various costs of the services . .as an additional presumption that you will need to make... for the most part, I would say fuck you to the employment of a variety of the third party services, unless you are just using a small portion of your BTC stash (such as less than 5%) to fuck around with such services.. or if you are like Saylor and you can negotiate really straight forward and low rates... Personally, I would not go for anything less than 6% per year interest, even though I expect bitcoin to be able to perform better than that.

Regarding just purely using your bitcoin stash in order to figure out how much to authorize yourself to draw upon... if you have reached entry-level fuck you status, then it should be easier to figure out using the 200-week moving average.. so at the most 12% per year based on 200-week moving averages, and if you are concerned about withdrawing the maximums, then do only 6%... remember that 200-week moving average is currently just shy of $21k, so our default entry-level fuck you status would require around 95 BTC to have had reached entry-level fuck you status.

If your BTC stash is only half of entry-level fuck you status (only 47.5 BTC), or even a quarter of that (only 23.75 BTC), then you likely should not be cashing out very much of your BTC stash at all until you keep building up towards reaching entry-level fuck you status.. of course you can draw out some BTC along the way to make sure that you are sufficiently diversified and practices like that, but when accounting for your total net worth or your total investment portfolio, you would still need to add them up to see if you are at or above entry-level fuck you status and any withdrawal of BTC should attempt to follow formulas based on the 200-week moving average so that you are accounting for BTC volatility and careful not to withdraw too much.. and in the end, you have discretion to do whatever you like in terms of withdrawing from your BTC prior to reaching entry-level fuck you status, yet I would consider that your withdrawal rates would not get anywhere near the maximum levels.. and perhaps you would create your own maximum level that might be 1/4 of the 12% maximum that would be allowed in periods in which you had already reached entry-level fuck you status.

By the way, I am still considering creating some kind of a post to help to explain maximum withdrawal limits that relate to how much spot price is above the 200-week moving average, so at this time, our $47k-ish spot price is nearly 125% exceeding the 200-week moving average, so those kinds of numbers do surely seem fair in order to have some confidence in higher withdrawal rate percentages.

For sure another point is that if you withdraw from your BTC stash, there should be some expectation that you might never be able to get those BTC back, but of course, if you are still in BTC accumulation stages, you are likely still building your stash - while at the same time, the 200-week moving average continues to go up in order that in the future, you need fewer and fewer BTC in order to reach entry-level fuck you status... Many of recognize and appreciate that the 200-week moving average is likely NOT going to continue to move up at its historical rate of 75% per year, so we likely have to continue to account for some level of tapering of that historical 200-week moving average appreciation rate (even my post of December 28 had shown a tentative projection that even the guy with only currently 1/4 the coins to reach entry-level fuck you status (that's 23.75 BTC), would likely be sitting in a pretty decent place by the time we get to late 2024 - based on historical appreciations of the 200-week moving average price).