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About TheDirtyWord

  • Birthday 04/12/1972

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  1. Would I have had fiat liquidity though? Yes, the price of BTC goes up, my paper value goes up. But if I sell the BTC to secure $$, then I produce a taxable event in 2021. When the loan term is up in May 2022, assuming the price of BTC is higher than $37K, then what I pay back to BlockFi is less in BTC than it would have been to sell it in May 2021 to secure the $45K. I don’t know much about the HEX protocol (other than what’s been discussed on this thread), but there certainly are folks who are using their crypto as collateral to secure loans to buy more crypto.
  2. If you think in terms of BTC, I borrowed the equivalent of 1.22 BTC. At todays prices I only have to payback .71 BTC. Like I said, think in terms of BTC instead of $$.
  3. Could you have taken out a collateralized loan with digital assets 3 years ago? I don’t think that business model existed in 2018. Sure, traditional loans have been around forever. So have cars. Does that mean a car that runs on electricity isn’t a breakthrough because people have been getting from point A to point B for a century now using them? Maybe I’m deficient in understanding what fungible TradFi collateral could have been used to where my original obligation to repay has been decreased by 40% in little over 3 months. It would be good to know.
  4. On the contrary, they likely take possession of a lot of BTC. What they do with that BTC after they take possession probably has more to do with deciding how well/poorly they do.
  5. With the planet being $300T in debt, should that be a best practice? The no collateral part? For me, one of the reasons I was attracted to the space was the accountability aspect. You can't default on a loan collateralized with BTC. If the price of BTC drops, you either have to come up with more collateral or BlockFi simply takes formal custody of your original collateral. ...I would think in terms of BTC. When I took out a $45K loan, that equaled 1.22 BTC at the time. The price of BTC today is $63K or .71 BTC. So did I get a crappy rate of return, or did I make .5 BTC or $31.5K? Is there a collateralized loan out there in traditional finance that could give me what amounts to a 70% rate of return in 3 months? Maybe...haven't investigated. One thing to note here. BlockFi is a centralized entity. So its function is close to that of what we've come to expect from the structure of TradFi. But consider that there are lending protocols like Aave and Compound that allow for decentralized peer-to-peer lending, that remove the middleman where you can be the lender or the lendee.
  6. This certainly works as well, Michael Saylor has been taking out loans to buy BTC for the last 12-18 months. But he’s ultra-rich. A couple of things I would say make/made this process significantly better for both lender/lendee: 1). The money was in my account within 24 hours. The application process was nothing. When you say ‘I could have just…’, would a bank or online lender have been able to turn the request around that quickly? And would the application process have taken barely any time? And probably most significantly, would a traditional bank/lender allow you to use BTC as collateral? 2) From a collateral perspective, BlockFi is assured of being paid back because I have to put the collateral of BTC up to secure the loan. How many traditional loans are defaulted on because they’ll take out a loan (car, house, small business, etc) and wind up not being able to repay that loan? If the price of BTC did go down to a point where the value of the collateral was less than the loan I took out, I would need to add additional BTC or else, BlockFi simply now owns my BTC and are repaid in full. So defaults are off the table.
  7. Yeah, he's been matching ETH to the BTC chart for awhile now. And that's part of my concern actually. While SOL to ETH is new, he's been comparing the network effects of ETH to BTC circa 2017 for quite some time. So why the price prediction change from $20K (the approximate 2017 BTC high) to $40K?
  8. I like Raoul myself - he's become a North Star of sorts for me to always pay attention to. However, his price targets on both BTC and ETH have almost doubled over the past 6-8 months. I know his preference has shifted almost entirely to ETH. I think I heard him say he's 5% BTC, 70% ETH, 25% other alts and his entire macro thesis is now based on network effect. His BTC target at the end of this cycle is now $400K. So BTC is a 6-7x pump, but ETH is closer to 11x. It explains why his portfolio has shifted. That said, I don't think he's great at communicating downside. What I mean by that is you can tell how curious he is about all of this innovation. That's another reason I think he's shifted his portfolio, there is simply way more happening innovation wise with ETH/SOL and those protocols than BTC. But he treats those huge drops that crypto invariably has with more of a shoulder shrug because he's a log chart guy. To date, he's been right as the crypto market is at or near ATH's in terms of overall market cap. But with those outsized price targets, as we head into 2022...I'm going to proceed with more caution since his original targets for the 'blow off top' were more in the $250K (BTC)/$20K (ETH) range. IMO, I'll be paying attention to pace...how fast are we seeing these gains? Even back earlier this year, steep gains were accompanied by 20% drops in short periods of time...and that was before BTC lost almost 50% in a matter of 2 weeks in May. Overall, I'm looking forward to remainder of the year because I do think we're at the precipice of new ATH's by pretty decent margins. But I am significantly more focused on my exit plan now than I was even 3 months ago.
  9. Haven't posted much in this thread. This space moves so fast and where I thought I was ahead of the game just 12 months ago...watching the activity just in this thread alone, shows you how far and fast the space has come in so short a time. I did though want to provide an update on something I did about 5 months ago which was to take out a loan using my BTC as collateral. For me, I took out a $45K loan. At the time, BTC was about $37K. I took the loan out thru BlockFi so I needed to put up collateral equal to 2.44 BTC to secure the loan. So say I wanted $45K back in May. Instead of selling BTC 1.22 BTC, I secure that amount by anticipating price appreciation...that's the risk I take. The rate is fairly shyte by credit standards we se in TradFi, I think it's 8-9% so my interest payment is about $370/month. So my loan term was 12 months which means my 'cost' will wind up being (in USD) about $41.5K come May 2022. However with BTC at $60K, let's say I wanted to pay back the loan right now. What I would need to pay back would still be $45K in USD terms. But in BTC terms, instead of cashing out 1.22 BTC, now it would be in the .75 BTC. So BlockFi wins because they've earned 8-9% in the BTC I collateralized with them. And I win because I've saved almost .5 BTC (almost $30K) by loaning out my BTC instead of cashing out for USD. Given how much press and activity you see in the crypto space, real world use cases are still in the 'handful' stage IMO. But this is one as people start to opt-out of fiat economies that has incredible value.
  10. Each to a certain extent showcases different aspects of his brilliance. To me, it Raiders. But hard to quibble with any of the other choices.
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