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Gemini Earn
41–50 of 51 posts
Re: Gemini Earn
#42What's the market for borrowers? What are people borrowing cryptocurrency for? With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? Surely not all of the demand is coming from the unbanked? EDIT: My question was answered while I was typing it up :) https://news.ycombinator.com/item?id=25996264
Most entities borrowing are borrowing crypto as part of their trading operations. For example, I could borrow crypto to provide margin for my HFT market making strategies. A very popular use is to do rate/basis arb. So I borrow a crypto at say 10% interest and then use that to sell a future or swap that has a rate higher than 10%. So borrow at 10%, short a future with a annualized percent basis of 20%, and capture a…
It is interesting to see crypto collectively become the things its supporters hated most about the traditional financial system.
Re: Gemini Earn
#43What's the market for borrowers? What are people borrowing cryptocurrency for? With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? Surely not all of the demand is coming from the unbanked? EDIT: My question was answered while I was typing it up :) https://news.ycombinator.com/item?id=25996264
> With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? I just had a look and compared Gemini's calculator of lending, compared to Zopa's (UK p2p lender) calculator and, for a £10k loan, you'd be paying ~£500 in interest at Zopa (~14% APR), where Gemini claims you'll be getting $1.7k in interest (based on $11k lent and Filecoin's ~7% interest). My guess is Gemini's calculator…
The default time period on the calculator is 2 years.
Re: Gemini Earn
#44Am I missing something about crypto lending? Your deposit can't be FDIC insured and if borrowers are defaulting that means your deposit disappears. You can't bailout a crypto bank by printing crypto. The appreciation of Bitcoin has been so staggering that it also makes getting interest back on your deposits seem rather outdated.
As with anything in crypto, there is significant counterparty risk.
Re: Gemini Earn
#45Earlier quoted context omitted.
Most entities borrowing are borrowing crypto as part of their trading operations. For example, I could borrow crypto to provide margin for my HFT market making strategies. A very popular use is to do rate/basis arb. So I borrow a crypto at say 10% interest and then use that to sell a future or swap that has a rate higher than 10%. So borrow at 10%, short a future with a annualized percent basis of 20%, and capture a…
It is interesting to see crypto collectively become the things its supporters hated most about the traditional financial system.
Well there's defi, which is pretty exciting imo. There's a lot things in that ecosystem like flash loans (uncollateralized loans) that simply cannot exist in the traditional financial system. In many ways we are seeing a shift away from centralized exchanges towards decentralized, trustless transactions.
The promise of crypto is very much alive!
Re: Gemini Earn
#46If I am earning interest on Bitcoin I put in there, am I also gaining/losing the value change of Bitcoin during that time?
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Re: Gemini Earn
#47Earlier quoted context omitted.
> With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? I just had a look and compared Gemini's calculator of lending, compared to Zopa's (UK p2p lender) calculator and, for a £10k loan, you'd be paying ~£500 in interest at Zopa (~14% APR), where Gemini claims you'll be getting $1.7k in interest (based on $11k lent and Filecoin's ~7% interest). My guess is Gemini's calculator…
The default time period on the calculator is 2 years.
Yep, I used 2 years on both calculators.
Re: Gemini Earn
#48Earlier quoted context omitted.
Most entities borrowing are borrowing crypto as part of their trading operations. For example, I could borrow crypto to provide margin for my HFT market making strategies. A very popular use is to do rate/basis arb. So I borrow a crypto at say 10% interest and then use that to sell a future or swap that has a rate higher than 10%. So borrow at 10%, short a future with a annualized percent basis of 20%, and capture a…
It is interesting to see crypto collectively become the things its supporters hated most about the traditional financial system.
Because cryptocurrency doesn't fix human corruption, sadly this seems to be a byproduct of currency, and industrialism among other things. All cryptocurrency does is give us a currency that removes centralisation.
Re: Gemini Earn
#49Yet another loan originator for Genesis counterparties, now with half the interest payouts. What are the capitalization and/or insurance requirements? This is all extremely opaque. The main reason they’d borrow is to short it, which means they’ll sell it to cause a liquidity crash. If that doesn’t work, they’ll be bankrupt and you’ll lose everything anyway.