When everyone is digging for gold, sell shovels?

[OleksiyRybakov]

When everyone is digging for gold, a good approach is to sell shovels. When everyone is going into crypto, maybe it might be a good idea to lend USDT. Lending USDT on KuCoin provides interest rates of up to 2% per day. Assuming that you get paid monthly you can get up to 60% per month. This means that lending 10k$ will give you 2.81 million $ in one year.

But where are all those millionaires from crypto lending? Is the risk of not being paid back too large despite the insurance? Or are the returns not that great in reality?

 

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[c4n]

Disclaimer. I don't know KuCoin and have never lent any crypto

However, from your post, it looks like KuCoin is the one selling shovels. Those lending USDT could be the gold diggers...

 

[maverick]

Lending USDT on Kucoin yields 0.04% per day. Annualized this is 15-16% which is good but not great.

 

[OleksiyRybakov]

Lending USDT on Kucoin yields 0.04% per day. Annualized this is 15-16% which is good but not great.

On KuCoin there are some lending opportunities for 0.04% per day but I have also seen some for higher interest rates giving up to 2% per day. Probably, it is not very easy to secure the 2% deals though so I assume that 700% gains in a year and higher gains are less realistic.

 

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[TrillAmbition]

When everyone is digging for gold, a good approach is to sell shovels. When everyone is going into crypto, maybe it might be a good idea to lend USDT. Lending USDT on KuCoin provides interest rates of up to 2% per day. Assuming that you get paid monthly you can get up to 60% per month. This means that lending 10k$ will give you 2.81 million $ in one year.

But where are all those millionaires from crypto lending? Is the risk of not being paid back too large despite the insurance? Or are the returns not that great in reality?

In a bullmarket most people don't want to have crypto over dollars. The variable rates are not always that high and are usually that high while the markets are super volatile which means the price is pumping during a bull market.

Those 2% per day sound great until you realize that that 2% return on $10k would have returned 10% on that same day so you are now down 8% in crypto terms. (Using crypto as the base pair instead of usdt)


hope that shares some insight into some of the trader's mentality

 

[Kevin88660]

When everyone is digging for gold, a good approach is to sell shovels. When everyone is going into crypto, maybe it might be a good idea to lend USDT. Lending USDT on KuCoin provides interest rates of up to 2% per day. Assuming that you get paid monthly you can get up to 60% per month. This means that lending 10k$ will give you 2.81 million $ in one year.

But where are all those millionaires from crypto lending? Is the risk of not being paid back too large despite the insurance? Or are the returns not that great in reality?

It is definitely not that high. Well two percent is up to. But in good times 20 percent yield for stablecoin or fiat lending is possible.

The lending is secured. The risk is more on exchange being hacked, or the exchange owner running away with your money. but Kucoin is a top exchange so it is not that high risk either (when I say high its relative in the crypto world).

 

[maverick]

In a bullmarket most people don't want to have crypto over dollars. The variable rates are not always that high and are usually that high while the markets are super volatile which means the price is pumping during a bull market.

Those 2% per day sound great until you realize that that 2% return on $10k would have returned 10% on that same day so you are now down 8% in crypto terms. (Using crypto as the base pair instead of usdt)


hope that shares some insight into some of the trader's mentality

This makes no sense at all. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

 

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[OleksiyRybakov]

This makes no sense at all. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

In a bull market people want to borrow fiat. Then they sell that fiat to buy crypto. Once the crypto goes up, they sell the crypto and make some profits.

In a bear market people want to borrow crypto. Then they sell crypto to buy fiat. Once the crypto goes down, they sell the fiat and make some crypto profits.

 

[maverick]

In a bull market people want to borrow fiat. Then they sell that fiat to buy crypto. Once the crypto goes up, they sell the crypto and make some profits.

In a bear market people want to borrow crypto. Then they sell crypto to buy fiat. Once the crypto goes down, they sell the fiat and make some crypto profits.

You're saying the same thing. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

 

[OleksiyRybakov]

You're saying the same thing. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

What I was trying to post is that for me it looks like in @TrillAmbition 's phrase "In a bullmarket most people don't want to have crypto over dollars." the word "have" actually means "borrow". I might be wrong though.

 

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[spreng]

Don't know about that one. For what Karl Marx is worth, he was right about the means of production. If you control it, you will make a lot of money (i.E coinbase). Develop meaningful infrastructure that adds value to crypto and you will be rich

 

[AceVentures]

It seems like ~20% APR is the current go-rate for a $1 pegged stable. That's the time-value being put on fiat. Currently.

The higher the incentive for your lockup, the higher the underlying risk. There is no free lunch.

 

[TrillAmbition]

This makes no sense at all. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

In a bull market people want to borrow fiat. Then they sell that fiat to buy crypto. Once the crypto goes up, they sell the crypto and make some profits.

In a bear market people want to borrow crypto. Then they sell crypto to buy fiat. Once the crypto goes down, they sell the fiat and make some crypto profits.

You're saying the same thing. In a bullmarket fiat flows into crypto - hence why it's a bullmarket.

What I was trying to post is that for me it looks like in @TrillAmbition 's phrase "In a bullmarket most people don't want to have crypto over dollars." the word "have" actually means "borrow". I might be wrong though.

"In a bullmarket most people don't want to have crypto over dollars." was a typo

I meant:
"In a bullmarket most people don't want to hold dollars over crypto"


There is a variable rate for stable coins and for cryto tokens and it is based on supply and demand. As it has been stated on the comments above traders borrow fiat in bull markets to get more crypto exposure. And traders borrow crypto to shortsell during a bear market.

There are large institutional players trying to get a version of AAVE for being able to get big money into providing stable coins into defi. This should lower some of the fiat rates but it might not keep up with the demand that a proper blowoff top to a market cycle brings.

 

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[Kevin88660]

When everyone is digging for gold, a good approach is to sell shovels. When everyone is going into crypto, maybe it might be a good idea to lend USDT. Lending USDT on KuCoin provides interest rates of up to 2% per day. Assuming that you get paid monthly you can get up to 60% per month. This means that lending 10k$ will give you 2.81 million $ in one year.

But where are all those millionaires from crypto lending? Is the risk of not being paid back too large despite the insurance? Or are the returns not that great in reality?

Selling shovel is legitimate business.

The highest entry barrier and most lucrative business of selling shovel is to build an exchange.

Dogecoin at one time was 40 percent of Robinhood income.

Small barrier to entry is building a crypto channel on social media.

 

[OleksiyRybakov]

Thanks to all of you for your great insights. It looks like lending can be performed either in a risky way or in a Slowlane way. In any way, it is not generating lots of millionaires. Otherwise, it would be promoted as strongly as investing into crypto, yet it isn't.

In my opinion, creating a cryptocurrency exchange is definitely a great business as long as the Commandment of Need is satisfied. This can be generated with value skew and there are definitely lots of things that I don't like about the state-of-the-art exchange platforms.

Creating a social media channel on crypto is in my opinion a horrible idea though. In August 2021, I have create some channels on finance. However, after two months I have decided to quit them since lots of commandments were not satisfied. In my opinion, it becomes even worse when influencers don't talk about finance in general but solely about crypto.

The Commandment of Control does not exist since social media platforms can easily delete your videos. One of my TikToks was banned for "promoting criminal or violent activities" just because I said "invest into crypto". It was unbanned later but it still affects the algorithm if you get a community guideline violation.

The Commandment of Entry also is not satisfied since anyone can learn how to explain technical analysis in theory. And saying how this and that cryptocurrency is going to the moon does not need any entry level at all.

The Commandment of Need is completely violated. Seriously, does anyone of you need another channel while there are thousands of channels on the internet about crypto? I don't think so.

The Commandment of Time is violated as well. Nobody is interested in videos from 2014 about where Bitcoin will be heading in 2017. So influencers have to constantly create more modern videos and adapt to the recent news. I have seen lots of YouTube channels about Shiba Inu that are releasing videos every 2 hours. Otherwise, I think that they might be ignored by the algorithm because of the sheer mass of videos on Shiba Inu.

The Commandment of Scale can be satisfied since social media platforms can create a large audience. However, the dissatisfied commandments of Need and Entry are strongly limiting the scale. Magnitude also cannot be generated unless people sell courses on technical analysis. However, I don't think that there is a huge need in teaching how Fibonacci retracements, Bollinger bands and the RSI work.

 

[Kevin88660]

Thanks to all of you for your great insights. It looks like lending can be performed either in a risky way or in a Slowlane way. In any way, it is not generating lots of millionaires. Otherwise, it would be promoted as strongly as investing into crypto, yet it isn't.

In my opinion, creating a cryptocurrency exchange is definitely a great business as long as the Commandment of Need is satisfied. This can be generated with value skew and there are definitely lots of things that I don't like about the state-of-the-art exchange platforms.

Creating a social media channel on crypto is in my opinion a horrible idea though. In August 2021, I have create some channels on finance. However, after two months I have decided to quit them since lots of commandments were not satisfied. In my opinion, it becomes even worse when influencers don't talk about finance in general but solely about crypto.

The Commandment of Control does not exist since social media platforms can easily delete your videos. One of my TikToks was banned for "promoting criminal or violent activities" just because I said "invest into crypto". It was unbanned later but it still affects the algorithm if you get a community guideline violation.

The Commandment of Entry also is not satisfied since anyone can learn how to explain technical analysis in theory. And saying how this and that cryptocurrency is going to the moon does not need any entry level at all.

The Commandment of Need is completely violated. Seriously, does anyone of you need another channel while there are thousands of channels on the internet about crypto? I don't think so.

The Commandment of Time is violated as well. Nobody is interested in videos from 2014 about where Bitcoin will be heading in 2017. So influencers have to constantly create more modern videos and adapt to the recent news. I have seen lots of YouTube channels about Shiba Inu that are releasing videos every 2 hours. Otherwise, I think that they might be ignored by the algorithm because of the sheer mass of videos on Shiba Inu.

The Commandment of Scale can be satisfied since social media platforms can create a large audience. However, the dissatisfied commandments of Need and Entry are strongly limiting the scale. Magnitude also cannot be generated unless people sell courses on technical analysis. However, I don't think that there is a huge need in teaching how Fibonacci retracements, Bollinger bands and the RSI work.

Everyone is supplying something doesn’t mean that we don’t need them anymore.

Quite the contrary it proves that there is hot need and hence everyone is jumping at it.

Just because no one is doing something doesn’t make it good either. Why no one is doing video on Arabic perception of Christianity in early 16th century? No one cares.

Supply chases Demand not vice versa.

If no one cares then no one cares. The lack of competition never makes a bad business demand become anyway better.

A big market provide many sub-niches that you can dive in. I have seen good channels that do well based on axie infinity contents only.

Crypto exchanges are fairly competitive too. There are hundreds if not thousands of defi projects these days.

The best business to get in are often “non-contrarian”. Markets that are large and growing are probably continue going to grow.

 

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[OleksiyRybakov]

Not necessarily. If lots of people are doing the same thing, they believe that there is a hot need for them. In reality, there is a hot need for some cryptocurrency influencers but not for ten thousands of influencers saying the same thing without value skew.

Besides, not every need is real. Some needs are heavily advertised. There is no high demand for machine learning jobs outside the colleges. When I looked at job offers, there are 10x as much web development offers compared to machine learning. Still, lots of students are lured into machine learning jobs since professors are telling them how "machine learning jobs are in high demand". Yes, machine learning has a higher demand than marine biology. Still, there are markets in higher demand that seem less lucrative.

And while zero competition does not make bad markets great, the less the competition, the bigger the chances that excellent execution is sufficient and perfect execution is not needed. I don't want to enter a market where perfect execution is required for a rather small success.

 

[Kevin88660]

Not necessarily. If lots of people are doing the same thing, they believe that there is a hot need for them. In reality, there is a hot need for some cryptocurrency influencers but not for ten thousands of influencers saying the same thing without value skew.

Besides, not every need is real. Some needs are heavily advertised. There is no high demand for machine learning jobs outside the colleges. When I looked at job offers, there are 10x as much web development offers compared to machine learning. Still, lots of students are lured into machine learning jobs since professors are telling them how "machine learning jobs are in high demand". Yes, machine learning has a higher demand than marine biology. Still, there are markets in higher demand that seem less lucrative.

And while zero competition does not make bad markets great, the less the competition, the bigger the chances that excellent execution is sufficient and perfect execution is not needed. I don't want to enter a market where perfect execution is required for a rather small success.

Need is defined by whether people care enough about it, voting it with their time (youtube attention) or dollar.

Some markets are more competitive yes, but that doesn’t make it a less need.

The reason why finance youtuber are switching to crypto it is because the stats on watch time and views, numbers don’t lie. They do for current rpm, not what they think it might be. You see every stocks guy starting to talk about shib and doge.

I always prefer a larger and competitive market with a proven need, then a non-competitive small niche market which you are not sure where the demand is coming.

Because in a large market you can get around with competition pivoting around as there are many sub-niches you can dive in. In a small market you can’t.

You can easily create barriers if you focus on on-chain analysis, tokenomics and contract security audit. Or you specifically target spanish speaking views who cannot read English whitepapers.

If you want to get into the lending business, these intermediaries are done by exchange. This is no longer early 2020s and likely you need seed investors and VC burning extremely generous incentives as farming yields. Much higher reward but likely to be a winner take all game. 3-5 top cex or defi will monopoliez more than 90 percent of the market share leaving the thousands of others going bust.

Cyber Security is another selling shovel business. People worry about wallets getting hacked all the time.

 

[Ing]

In a bullmarket most people don't want to have crypto over dollars. The variable rates are not always that high and are usually that high while the markets are super volatile which means the price is pumping during a bull market.

Those 2% per day sound great until you realize that that 2% return on $10k would have returned 10% on that same day so you are now down 8% in crypto terms. (Using crypto as the base pair instead of usdt)


hope that shares some insight into some of the trader's mentality

In a bear market people want to have cryptos. But do you really think they want stablecoins? You cant short a Stablecoins more than fiat.
When lending USDT really was profitable in a bearmarket, I won’t wait till next autumn to get my fiat into cryptos.
What do you think?

 

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