Good to have more options, but people are better off taking a second mortgage or using income products like MSTY if they are borrowing to upgrade their lives, which relies on Bitcoin appreciation in the short term given the duration of the loan. Not to mention the higher interest rate and stress from managing the LTV.
I’m thinking about what nostr:nprofile1qqsvf646uxlreajhhsv9tms9u6w7nuzeedaqty38z69cpwyhv89ufcqpzpmhxue69uhkummnw3ezuamfdejszxrhwden5te0wpex2mtfw4kjuurjd9kkzmpwdejhgj8j7r8 has recently spoken about in regards to the hodler’s dilemma.
This is the choice to either spend your coins to finance living, or not spend your coins and live “less” than you otherwise could. Which is why he released nostr:npub1ex7mdykw786qxvmtuls208uyxmn0hse95rfwsarvfde5yg6wy7jq6qvyt9 Lending (which I’m super excited about)
Interest rates on this lending product appear to be between 9-13%, which seems high compared to traditional lending, but if you’re a hodler, you’re not a traditional investor, so is it expensive for you?
If Bitcoin’s CAGR is between 50-60%, what’s 13% in interest?
Let’s say Bitcoin’s CAGR works its way down to 25-30%. By then, interest rates should settle between 6-9%, but let’s say 9% to stay conservative.
Still a better option than selling, creating a taxable event, and missing out on future appreciation of your Bitcoin. I think an important thing to understand is that this product is for productive individuals. If you work or have a business and can service the debt payments while living below or within your means, this is an amazing product for you.
My husband and I speak about this almost every night. We’ve completed a full tour of duty in Bitcoin (4-year cycle). In the beginning, we thought we would be offloading some to finance a better quality life once we reached this point.
But now we understand that the more we hold off on certain spending and sacrifice to live as minimally as possible now, each year that goes by, we’ll have that much more financial freedom moving forward.
Now with lending, as long as we continue to live profitably, our savings will keep growing exponentially because we won’t need to cut into 5-8% of our stack each year to cover living expenses like we thought we would.
My favorite part about this lending product from Strike, and others who will adopt this framework, is no credit check. That’s a big double bird from us to the system that tried to control us with their BS communist social credit score.
No, we will not play by your nonsensical rules. Proof of work. Bitcoin is a meritocracy. You get opportunities based on your stack and nothing else. And you grow your stack by providing value to society.
Proof of work. So excited for this bright orange future that is really starting to pick up steam.
Discussion
Ehh nothing against saylor, I respect him greatly but I’m skeptical of the MSTY model. I want to see it survive a 4 year cycle and see how it performs in the bear.
Even if it survives, those shares are still in the old system which I am strongly opposed to. You don’t truly own them
With Bitcoin, we own that asset. I can send those coins to nostr:nprofile1qqsvf646uxlreajhhsv9tms9u6w7nuzeedaqty38z69cpwyhv89ufcqpp4mhxue69uhkummn9ekx7mqpr4mhxue69uhkummnw3ez6ur4vgh8wetvd3hhyer9wghxuet5tm8sjr & nostr:nprofile1qqsvn0dkjt80raqrxd470c98n7zrdehmcvj6p5hgw3kyku6zyd8z0fqpzpmhxue69uhkummnw3ezuamfdejsz9rhwden5te0wfjkccte9ejxzmt4wvhxjmcrzzyf7 whenever I want and get my fiat. I don’t need to rely on a traditional brokerage that may or may not let me access my shares.
Jack took bitcoin to Wall Street not the other way around. This is a Bitcoin native option which provides us bitcoiners the opportunity to play in the financial games the wealthy has access to without forcing us to play their game which is built on fiat
The MSTY model is nothing new. People have been generating income selling covered calls for a long time. The uncertainty lies on whether or not MSTR can remain liquid and volatile over time.
If you’re giving up control of your keys and taking fiat in exchange, is that much different than owning shares of MSTY from a sovereignty person? I would say it’s a difference without a distinction.
You’re still trusting a regulated third party. If you like Strike more than say Fidelity that’s fine, but if the government comes knocking both of them are going to comply.
No beef with Jack and appreciate what he built, but we are dealing with the fiat system in both scenarios. What Strike allows, which has been offered by Ledn for years is just a bridge to tradfi. You’re giving up control of your keys and dealing with third parties. You can’t have your cake and eat it too. But now people can choose to trust Strike instead of Fidelity.