If you have been following the crypto market, you know that it went nuts over the last few days. The whole LUNA/UST saga continues to unweave in front of our own eyes. Since I write a lot about crypto, I suppose you might be asking what I am up to. Am I pulling out? As I mentioned in my post from November of last year, “at this point I have taken out most of the money out of Crypto” and that continues to remain true.
As far as LUNA/UST itself is concerned, I never got into it since I thought 20% APY was too high when banks are (and were) struggling to give 3% APY (see Porte and HMB). But perhaps more importantly, with the limited funds I have, I had better and possibly safer plays of my own.
Anyway, it is worth pointing out that I have converted USDC to dollar in fintechs bank accounts that provided some kind of USDC saving (see Onjuno and Yotta). Now don’t get me wrong, I like both OnJuno and Yotta but I have no idea what they do with my USDC. For all I know they might have converted it all to UST while chasing 20% APY for themselves. Okay, sure, they likely didn’t do that but I don’t want to read terms and conditions to find out, neither do I want to wait around to find out. So, I simply converted funds to USD so as to fall under the safety net of FDIC insurance. When things settle down a bit, I may dip back in to USDC on Onjuno (6% APY) and Yotta (estimated 4% APY).
Now, let’s talk about money on exchange. I currently have a little bit of money on Coinbase which I normally store as USDC because you know I love me some 4% cashback card. Although it is highly unlikely that Coinbase or USDC will fall apart overnight, however, to fall under the safety net of FDIC insurance I chose to convert USDC to USD (free conversion back and forth by the way). I plan to convert USD to USDC again when using the card. It is imporant to understand that USDC, like any other cryptocurrency, is not FDIC insured, however typically, USD held in exchange is FDIC insured (up to 250,000). This help page on Coinbase explains what I am saying further:
Cryptocurrency is not legal tender and is not backed by the government. Cryptocurrency, (including but not limited to tokens such as bitcoin, litecoin and ethereum, and stablecoins such as USDC), is not subject to Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation protections.
To the extent U.S. customer funds are held as cash, they are maintained in pooled custodial accounts at one or more banks insured by the FDIC. Our custodial accounts have been established in a manner to make available pass-through FDIC insurance up to the per-depositor coverage limit then in place (currently $250,000 per individual). FDIC pass-through insurance protects funds held on behalf of a Coinbase customer against the risk of loss should any FDIC-insured bank(s) where we maintain custodial accounts fail. FDIC insurance coverage is contingent upon Coinbase maintaining accurate records and on determinations of the FDIC as receiver at the time of a receivership of a bank holding a custodial account.
Finally this brings me to other crypto held on exchanges. More or less all BTC I hold is in a decentralized wallet that I had shared in my very through yet basic Stellar AMM guide. I still have a little bit of coins on centralized exchanges. For example, I have CRO staked on CDC for their 3% cashback card which used to be good before the whole program was nerfed to ground. I didn’t lose money on CRO since I had sold my initial stake to recoup my initial gamble before staking all over again (ouch!)
I have a little bit of promotional money on Nexo (see $100 signup bonus) but I plan to withdraw it when I get my free withdrawal next month. Similarly, I have a little bit of BTC on Hodlnaut and this BTC is mostly stuff I didn’t sell after getting it as cashback on Fold card (see detailed review here and see complain about nerf here). Whatever amount of BTC I don’t sell, I plan to toss in a decentralized exchange.
Closing Thoughts
I have been mostly out of crypto market for months now. And whatever funds I have left on the market, I have taken small action to ATTEMPT to secure them further. This includes (temporarily) not converting USD to USDC on Coinbase until I am ready to use the Coinbase card.
