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Second largest US mortgage lender will accept crypto payments this year

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Re: Second largest US mortgage lender will accept crypto payments this year

#131

Post by tylerrobinson »

nostrademons wrote: post #92
SketchySeaBeast wrote: post #62

Earlier quoted context omitted.

Bitcoin gained 7% so far today from it's lowest to its highest. If I have a 5% margin on whatever I'm selling how could I ever feel good about trading for it, knowing that 7% was equally likely to be a drop and not wanting to treat it like an investment, where I have to wait for it to gain value again before I can sell?

The weird thing is that this is starting to happen to low-margin businesses that price their goods in dollars. Restaurant prices around me have gone up anywhere from 25-100% in the last 6 months. I had the surreal experience of telling my wife, as she was phoning in a take-out order, "Ask them what their current prices are. I got different numbers from their Yelp page, the menu photos posted to Yelp, their webpage, a…

Sorry, where are you experiencing this? Food near you has doubled in price, like a burger used to be $10 and now the same one is $20?

You’re sure it’s not confusion about delivery markups?

Re: Second largest US mortgage lender will accept crypto payments this year

#132

Post by MichaelBurge »

JamisonM wrote: post #129
MichaelBurge wrote: post #79

Earlier quoted context omitted.

No, it changes the argument to "Bitcoin is inconvenient and requires a lot of maintenance. I have to track margin, not lose my wallet, not get scammed, etc. and if I forget to roll my futures and it collapses I lose 80% of my money" Which I would agree with, but the original "volatile instruments cannot be used for pricing" isn't true. > doesn't that prove that volatility does matter. It doesn't matter for making it…

> It does matter if you want it to be convenient. A sincere thank you for this reply. It matters in terms of if you shift the argument from "volatile instruments cannot be used for pricing" to "volatile instruments have prohibitive costs that make using them for pricing very impractical" too, right? Your example that you could price in bitcoin and then structure your sale offer in a way that 90% of the proceeds trans…

I think you are right, and together with mining fees, dilution, negative attention from governments, block confirmation times, exchanges that aren't CME going bust, etc. mean it's generally not a very useful commodity.

However, one thing that should be mentioned is that Bitcoin is expected to increase in value. I don't mean that in a trader sense or that you should buy it; I mean Bitcoin futures are in contango(i.e. priced higher than the commodity) so you can lock in a risk-free profit by 1. Buying Bitcoin and 2. Selling a future. Specifically, the spot price is currently $47,150 while the September 2021 futures are $47,340 for a profit of $190 or about 4.8% annualized.

So currently, any financial institution would have a strong incentive to denominate any escrow accounts in Bitcoin for times of less than 4 months(there's not as much liquidity further out). I believe this is what's happening here: Regulators ask questions if banks buy the Bitcoin themselves, but if it's in escrow on behalf of your customers it's more acceptable.

Conversely, customers should prefer to pay in USD, because paying in Bitcoin is equivalent to either a short position(if they sell their Bitcoin and never buy any again) or an expected cost of 5% interest due to (directed) volatility.

So the original claim that it has "no impact at all" is probably too strong, but a 5% interest rate is not what people mean when they reference Bitcoin's wild price swings i.e. volatility: The capital appreciation/loss can be accounted for if you really want to.

Note: I'm not recommending this strategy, just attempting to calculate carrying costs in the context of a mortgage lender holding Bitcoin in escrow.

Re: Second largest US mortgage lender will accept crypto payments this year

#133

Post by nostrademons »

tylerrobinson wrote: post #131
nostrademons wrote: post #92

Earlier quoted context omitted.

The weird thing is that this is starting to happen to low-margin businesses that price their goods in dollars. Restaurant prices around me have gone up anywhere from 25-100% in the last 6 months. I had the surreal experience of telling my wife, as she was phoning in a take-out order, "Ask them what their current prices are. I got different numbers from their Yelp page, the menu photos posted to Yelp, their webpage, a…

Sorry, where are you experiencing this? Food near you has doubled in price, like a burger used to be $10 and now the same one is $20? You’re sure it’s not confusion about delivery markups?

Pacifica, CA. No, it's (mostly) real - we were confused between half & full orders, but prices are still up 50% between the Yelp menu and their official website menu, with the menu pictures on Yelp showing various prices in-between. Chicken & chips used to be $7.50, now it's $10.40 ($14.85 for a full portion).

https://www.yelp.com/biz/camelot-fish-and-chips-pacifica?osq...

https://camelotfishandchips.com/menu/

Re: Second largest US mortgage lender will accept crypto payments this year

#134

Post by jkepler »

nostrademons wrote: post #133
tylerrobinson wrote: post #131

Earlier quoted context omitted.

Sorry, where are you experiencing this? Food near you has doubled in price, like a burger used to be $10 and now the same one is $20? You’re sure it’s not confusion about delivery markups?

Pacifica, CA. No, it's (mostly) real - we were confused between half & full orders, but prices are still up 50% between the Yelp menu and their official website menu, with the menu pictures on Yelp showing various prices in-between. Chicken & chips used to be $7.50, now it's $10.40 ($14.85 for a full portion). https://www.yelp.com/biz/camelot-fish-and-chips-pacifica?osq... https://camelotfishandchips.com/menu/

No real surprise here, considering that over 90% of existing USD money supply has been created since 2008.[1] Unless the real economy grew 90%, that monetary creation must necessarily push prices up, but due to information assymetries, price increases happen unevenly.

[1] https://fred.stlouisfed.org/series/M1SL

Re: Second largest US mortgage lender will accept crypto payments this year

#135

Post by tylerrobinson »

nostrademons wrote: post #133
tylerrobinson wrote: post #131

Earlier quoted context omitted.

Sorry, where are you experiencing this? Food near you has doubled in price, like a burger used to be $10 and now the same one is $20? You’re sure it’s not confusion about delivery markups?

Pacifica, CA. No, it's (mostly) real - we were confused between half & full orders, but prices are still up 50% between the Yelp menu and their official website menu, with the menu pictures on Yelp showing various prices in-between. Chicken & chips used to be $7.50, now it's $10.40 ($14.85 for a full portion). https://www.yelp.com/biz/camelot-fish-and-chips-pacifica?osq... https://camelotfishandchips.com/menu/

This is fine as an anecdote, but it’s not what most US consumers are experiencing. In the last 12 months, food made at home has increased in price by 2.6%, and eating out has increased by 4.6%.

https://www.bls.gov/cpi/

Re: Second largest US mortgage lender will accept crypto payments this year

#136

Post by SketchySeaBeast »

jkepler wrote: post #134
nostrademons wrote: post #133

Earlier quoted context omitted.

Pacifica, CA. No, it's (mostly) real - we were confused between half & full orders, but prices are still up 50% between the Yelp menu and their official website menu, with the menu pictures on Yelp showing various prices in-between. Chicken & chips used to be $7.50, now it's $10.40 ($14.85 for a full portion). https://www.yelp.com/biz/camelot-fish-and-chips-pacifica?osq... https://camelotfishandchips.com/menu/

No real surprise here, considering that over 90% of existing USD money supply has been created since 2008.[1] Unless the real economy grew 90%, that monetary creation must necessarily push prices up, but due to information assymetries, price increases happen unevenly. [1] https://fred.stlouisfed.org/series/M1SL

But until this year inflation didn't really increase over average[1], and we certainly can't blame this year all on the creation of new money, and it certainly didn't increase by 90%.

I'd be interested in where you think all that inflation is hiding. Because you're saying it has to be somewhere, right?

[1]https://www.officialdata.org/us/inflation/1800?amount=1

Re: Second largest US mortgage lender will accept crypto payments this year

#137

Post by arcticbull »

okwubodu wrote: post #111
arcticbull wrote: post #102

Earlier quoted context omitted.

Did you include the time it takes to buy solana on an exchange and the time it takes to sell solana on another exchange and settlement periods on both sides? You said send money, which solana is not so you should include the whole process. Instant payments have been available through the world for ages, SEPA for instance and soon RTP in the US but that value doesn’t accrue to the underlying currency. That makes the s…

> You said send money, which solana is not so you should include the whole process. You’re right, even though it’s still faster for me. But the whole point of allowing payments in crypto is removing steps from that process. Which is valuable. > The value is captured in the equity of the companies not in dollars. I do not care about companies. If it helps people I’m for it.

> I do not care about companies. If it helps people I’m for it.

I suspect you completely missed my point.

Re: Second largest US mortgage lender will accept crypto payments this year

#138

Post by nostrademons »

SketchySeaBeast wrote: post #136
jkepler wrote: post #134

Earlier quoted context omitted.

No real surprise here, considering that over 90% of existing USD money supply has been created since 2008.[1] Unless the real economy grew 90%, that monetary creation must necessarily push prices up, but due to information assymetries, price increases happen unevenly. [1] https://fred.stlouisfed.org/series/M1SL

But until this year inflation didn't really increase over average[1], and we certainly can't blame this year all on the creation of new money, and it certainly didn't increase by 90%. I'd be interested in where you think all that inflation is hiding. Because you're saying it has to be somewhere, right? [1] https://www.officialdata.org/us/inflation/1800?amount=1

It all went to the Bay Area and other places where numerous tech workers congregate, along with NYC and other places where finance workers congregate. It's spilled out into the rest of America to the extent that these people move around.

Since 2008, home prices here have gone from about $1-1.2M for a modest home in Cupertino or Los Altos to about $3.5M for that same home. Restaurant meals have gone from about $9 for an entree to about $30. Daycare is now $2000/month for an average place, or $3500/month for a good one.

This is an example of a Cantillon effect [1]. Inflation doesn't affect prices uniformly. New money enters the economy at specific points (usually the financial industry), and then it pools in firms that have strong pricing power (currently the tech industry). People close to those areas experience sharp inflation while also seeing their wealth and living standards rise sharply relative to the broader economy. People not in those areas experience the money injection as an increase in inequality, not as inflation. The money doesn't circulate effectively between the "new" and "old" economy, because the "old" economy produces little that people in the "new" economy want to buy, and when they do, there are usually ample competitors to hold down prices.

The thing is that the pandemic and now the Biden administration's policies to build back from it have in some sense broken that dam that prevents money from circulating, and so we're beginning to see more broad-based inflation. Remote work let people on Bay Area salaries work anywhere, which means you might have multiple people with $500K+ compensation bidding up home prices and spending money at restaurants in what was previously a sleepy rural area. Direct stimulus payments inject money into ordinary people's bank accounts rather than into the financial industry, so inflation resulting from them is broad-based rather than concentrated in financial assets. Infrastructure spending will shift the Cantillon effects to areas like government contractors and raw materials like steel & concrete. And policies that are specifically designed to alleviate inequality will also result in inflation: the flip side of having lots of money is that everything you spend it on costs more.

[1] https://mattstoller.substack.com/p/the-cantillon-effect-why-...

Re: Second largest US mortgage lender will accept crypto payments this year

#139

Post by epa »

mgh2 wrote: post #120
epa wrote: post #60

Earlier quoted context omitted.

This transaction was actually facilitated by chamath palihapitiya who paid USD cash to a Bitcoin company who bought it and paid out the seller in USD cash. It was a publicity stunt to prop up Bitcoin and it worked.

Please provide source to confirm this story

https://mobile.twitter.com/AbhishekLpd/status/13640184107079...

"In 2014 I was buying land in Lake Tahoe and I told the sales guy I'll buy this plot if you let me buy in bitcoin because I wanted to promote bitcoin as a transactional infrastructure. That was 2800 coins. That's worth $140-150M today"

- Chamath

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