About a month ago one of the largest stablecoin, UST, collapsed, and with it Bitcoin crashed from around $40k to around $30k. At the time I wrote a post titled “am I pulling out of crypto?“. As I mentioned in the post, I have been mostly out of crypto since November of 2021. If you haven’t guessed by now, my crypto plays almost entirely involved of crypto debit cards. Yes, they were that good and I considered them to far less risky plays.
Another “far less risky” play is considered to be high APY on stable coins. Many people poured their live saving on 20% APY UST until everyone was hit with the sudden reality that money can’t be earned out of thin air. In hindsight, the warnings on UST were there but you had to look at the right places and listen to the right people. This is one of the issue when getting news from popularity based platform like reddit – it becomes entirely impossible to learn negative aspect of a project that was once as shilled as UST.
Anyway, prior to UST crash we saw various CeFi platforms reduce APY on stables and that continues to happen. Once upon a time, 9-10% APY on stablecoins was standard on CeFi and many at that time even considered these to be conservative rates. Now, Gemini is at around 6% APY while BlockFi is at 7% and Celsius….well they froze all withdrawals. Oh and many of them don’t offer interest on new deposits to US customers anymore.
During the Celsius fiasco BTC took a nosedive from 30k to 20k. So even if you were involved with Celsius, your crypto was likely impacted. Now, there is report that three arrow capital is possibly insolvent. Some of the behind the scene stuff is so hilarious that one could mistake it for a satire. Speaking of satire, the CEO of r/cryptocurrency’s beloved exchange Kraken seems like one.
But I would say this is typical in crypto. Maybe not that exact mindset but a variation of it. Disregard for and of others is pretty fundamental philosophy behind many of them. Many of them chase cash not security. There are too many crypto companies that are making full benefit of the fact that there isn’t a regulatory framework preventing them from doing shady stuff. As a result of that and market downturn, it is bound to happen that yet another house of card will collapse, and maybe that will trigger another one to collapse as well. So, where does this leave us? BTC to 10K? What if the biggest fraud of them all, USDT, collapses? Maybe we will see BTC under 5k?
So, where do we go from here? I will tell you what I am doing. First, I don’t trust anything in crypto to not go down. There is very little transparency on all of this. Tomorrow we could wake up to find out that the biggest exchanges are filing for bankruptcy. Tomorrow may be the day when the public realizes that their emperor has no cloth.
This means it is time to stop chasing crypto signup bonus. Celsius has best signup bonus but they are probably on their last leg at this point. Nexo has had $100 in BTC for depositing $1000 (or $1500) but I wouldn’t risk it at this point. Abra has had somewhat decent signup bonus but it is practically worth zero because starting June 21, 2022, you can’t buy, sell, nor withdraw their shit token CPRX (oh and they pay bonus on CPRX by the way). I have no idea how or why American Express is working on issuing a card for Abra.
I have never recommended trading crypto to make money and if we take away the crypto signup bonuses, what is left? Crypto debit cards, well kind of. Crypto.com card is useless now. CoinZoom card may not be worth anymore, hell they might even go out of business tomorrow (their native token literally has $7k 24 hour volume). Coinbase card basically cut rewards in half. Fold continues to nerf its card in weird ways. But Coinbase and Fold card are still decent. 2% cashback on a Coinbase debit card is still good.
However, one needs to be careful when dealing with CeFi. I would only deal with CeFi that has FDIC insurance on USD you hold. Furthermore, I suggest holding USD until point of sale (transfer, etc). This includes when doing shenanigans with Coinbase debit card. If you haven’t yet, I suggest using USD as your base asset on Coinbase debit card and depositing funds (direct deposit) as USD only. Also, don’t deposit too much at once as funds can be frozen.
Of course you can cut away these CeFi and deal with crypto earning 1.5% cards from traditional finance such as Upgrade or Quontic. There are better options though.
