This is NOT a trick question.
On $10,000 US over one year, crypto can earn you $661 by just holding it* in the right places and in the right form (stable coin). In that same time, a competitive big bank would pay you $55 (thru bankrate.com CD calculator).
Traditional brick and mortar banks (and the online banks too) are legal thieves. That’s been known for hundreds of years. Thomas Jefferson had problems with banks in 1816…
And I sincerely believe with you, that banking establishments are more dangerous than standing armies
Thomas Jefferson letter to John Taylor in 1816 courtesy of monticello.org
A few other quotes have been attributed to Jefferson although those quotes have either been spuriously attributed to him or misquoted. This one is definitely not part of Jefferson’s writings but makes a lot of sense…
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
Monticello.org disputes the validity of this being a Thomas Jefferson quote.
Private banks DO control the currency and manipulate inflation and deflation through policy. The Federal Reserve is a private corporation – not a government entity. These banks control the monetary policy of the United States and by many measures that of the entire world that relies on the US dollar for commerce as a standard of value.
But if you have been reading and researching crypto and the “crazy” rates of annual percentage yields provided by holding and lending crypto, you may know (or have an inkling of the idea) that traditional banks have been screwing us (the banking public) for a pittance and we have been grateful for the handouts as if what they give us is based on the banks just getting by and giving us what they can. Don’t believe the hype. Big Banks are highly profitable cash generating machines. The saying of ‘it takes money to make money’ is very true in the banking world. Big banks can generate money in many ways by leveraging the dollar. We, as individuals, are generally limited to only using the dollar once. And yet the banks are “generously” giving us back 0.055% on our money (if we are lucky – I see lots of rates at 0.01% for money market accounts). Some may give us 1.25% if we let them hold our money for five years. That’s FIVE years you can’t do anything with your money but watch its buying power decrease over 5 years since that rate is less than the cost of inflation at 3% a year.
The Better Way to Hold and Earn
There is a better way (or three better ways).
- One such way is the many sites that offer APY bonuses for holding coins. A lot of exchanges will do it for marketing purposes or to build liquidity pools. A month or so ago, I saw Gate.io had a BIRD coin APY at 125% if you staked BIRD coin for a week. Log onto the various exchanges and see what they offer.
- Another way is to stake your holdings (on either Ethereum or Binance Smart Chain) and earn APY via DeFiPie (a decentralized lending platform). They take your holdings and lend it out. Setting this up can be pricey on Ethereum so you’ll want to do it on coins that you have significant holdings and also with good growth potential – or use coins listed on Binance Smart Chain because its super cheap for the transaction. The main reason for the high expense is the outrageous Ethereum gas fees charged to transfer your coin to DeFiPie. I sent over @ZEFU (Zenfuse’s Coin) to DeFiPie and paid almost $150 US in gas fees. I hope to make up the gas fees in growth of the coin itself and need it to grow enough to cover the recovery of the hold as well so I plan on $300 in total minimum growth just to break even. And then I look to earn 7% on DeFiPie lending out my coin. Otherwise, just holding and waiting for the @ZEFU to grow is fine but I could be making more and I am with DeFiPie.
- And the third way is through Celsius.network. Celsius is a blended centralized and decentralized lending platform. They (like defipie) also lend out their depositors coin to institutional and retail borrowers. You can buy stablecoin (pegged to the US dollar) via debit/credit card and earn a minimum of 6.61% up to 17.78% for platinum (non-US too) users (holders of @CEL coin. Where can you do this using fiat dollars? No where. It makes sense to me to transfer fiat to CEL and earn the higher APY over just keeping the money in the bank doing nothing. Hopefully the antiquated US regulators will allow US residents to earn via CEL at some point in the future.
If you’ve got the coin sitting around, make it it work for a living. Lend it out and bank it in crypto.
Doug – AltCoinMashup
Did you find this article helpful? If so, consider sending a tip via Bitcoin. Thanks for your support. Doug
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