Ninjastic
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Re: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading
by
HowardF
on 04/12/2014, 16:16:37 UTC
Quote from: itod on December 03, 2014, 11:32:06 PM
You are forgetting that many people don't have US$ to lend to others, but they have a unused BTC and don't want to take the risk of shorting them themselves. It's unimportant if you and other people help drive the BTC price to $200 in the short run, if in a long run you get more BTC then you initially started with. The preposition is that BTC will be one day worth tens of thousands of dollars or even more, and the only important thing is how many BTC you will have in that moment, it's unimportant if that moment will be in the year 2015, 2016, or 2020. Smart game strategy is to increase your BTC stack even if that means price goes temporarily to $10, as long as you believe that it is just temporary. IMHO it's much more logical the opposite of you are proposing, if you have BTC lend them to others so they can take the risk and short them, if you have US$ don't lend them buy new BTC stack instead.



I'm not saying bag holding is a good or a bad thing, but I think people sometimes don't realize how high BTC is going to have to climb to beat the other investments you can do in this space.  Based on my last years average return of 0.1026% on USD margin, lets look at some numbers:

Starting with $370 (current price as of posting this) and lending on Margin

On                          You'd Have
Dec 31st, 2014           $ 380.39
Dec 31st, 2015           $ 553.07
Dec 31st, 2016           $ 804.98
Dec 31st, 2017           $ 1,170.41
Dec 31st, 2018           $ 1,701.74
Dec 31st, 2019           $ 2,474.28
Dec 31st, 2020           $ 3,601.23


Whereas, my BTC lend average return was around 0.0018% so:

On                          You'd Have
Dec 31st, 2014           BTC1.00049
Dec 31st, 2015           BTC1.00708
Dec 31st, 2016           BTC1.01374
Dec 31st, 2017           BTC1.02042
Dec 31st, 2018           BTC1.02715
Dec 31st, 2019           BTC1.03392
Dec 31st, 2020           BTC1.04075

So, to be clear, you really have to believe that BTC is going ' To the moon!!! ┗(°0°)┛ ', if you think its going to beat converting the coins to USD and lending that way.  On Dec 31st 2020, they'd have to be worth more than $3,460.23 to actually make them a better investment (assuming interest averages hold steady for that long).



Edit:  Table formatting on this board....  ugh   Undecided

Edit2:  Screw tables, I'll just use spaces....

Edit 3: updated numbers because of double fee calculation error, made the difference even more pronunced....