1/ How to Live Off Your Bitcoin 101
1. Post BTC as collateral for USD loan from @unchainedcap
2. Buy Bitcoin and short futures on @binance
3. Collect spread (currently 43% annualized)
4. Pay interest 11%
5. Earn 32%.
2/ Note these spreads can change quickly.
If Bitcoin does drop rapidly you will need to collateralize your loan. But as Bitcoin is dropping the futures spread is also likely dropping. Meaning you can close out your carry trade early and make $ profit.
3/ Since Bitcoin dropped from where you originally took your loan, you probably ended up with more Bitcoin than you started with, and you can use that to collateralize your loan.
Still a win.
4/ If Bitcoin rises then you simply collect the spread, pay the interest, earn extra $, and retain all of your Bitcoin.
5/ Anyone see any flaws with this?
Risks are very small imo but here they are:
- custody (exchange) risk
- price of bitcoin falls and for some weird reason the contango spread gets larger. Not sure if this has ever happened or why it would.
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