These watchdogs always take the "worst case" analysis of everything.  The government agency is basically paid to scaremonger. Compared to traditional assets, Bitcoin of course has more risk.

It depends on why you are converting to fiat. If you want to invest in something else, you might already find it on the blockchain (for example, if you want to move it to the S&P 500, you could buy it here).  If you need to buy a house however, there will probably be fewer people willing to sell for bitcoin immediately.

You definitely will hit KYC limitations, so I would do a test withdrawal to an exchange first.  Don't get all your BTC frozen!

Is the fear that Bitcoin is only being propped up by USDT?  If that's true, and USDT explodes, why would BTC price necessarily go down with it? The theory is that USDT has propped up Bitcoin enough for it to be the new equilibrium price.

Well back at previous peaks, people thought $20K was high.  Then they thought $2K was high.  In 2013, they thought $1 was high!

Absolutely, Bitcoin is more a store of value than a medium of exchange at this point.  The large fees, and even lack of L2 solution, is a large reason the medium of exchange function isn't working.

My opinion is that you should re balance your portfolio to match your risk and reward preferences.  After any coin goes up by a ton, it makes sense to rebalance to meet your portfolio needs.

Would be happy to take suggestions for other ideas, especially if you've been dying to get exposure on these.

Good point -- there have been past efforts before to put stock indexes on the blockchain.  Some efforts aren't defi --  FTX requires you to register with their centralized exchange.  Synthetix has a good FTSE and NIKKEI index shares, but they don't capture the dividend of the index.  Capturing the dividend is important for a buy-and-hold token. 

For someone looking for S&P 500 exposure, I think the main differentiators then are:
- Defi (so permissionless / trustless).
- Capture dividends automatically, low system fees (so you can buy and hold without worrying about frictional losses to the system)
- Lever up long or short (MakerDAO lets you lever up long ETH-USD, but doesn't let you deposit DAI and withdraw ETH).

You're also right that these few months, people are looking at the great returns of BTC and not thinking about the lower returns of the stock market.

I'm also thinking of launching other derivatives.  Are there any exposures you've been really looking hard to get (e.g. leveraged long bitcoin exposure, GDP indexes, pre-IPO stock, etc)?

More asset classes are on the blockchain:

- You have currencies through USD Tether, USDC, or DAI.
- You have chance that Trump gets elected, a bunch of Altcoins.
- Traditional finance assets like indexes are being put online by Synthetix (FTSE/NIKKEI) and me at Itovault ( S&P 500 Index on the blockchain as a defi ERC-20 token).

What other assets would you like to track on the blockchain?  Why did you choose the above?

But what happens when Covid19 ends and people want to spend all those dollars?  Then we'll have the pay the piper of monetary printing.

Cryptos will live for a pretty long time.

First, you have the lindy effect going for it -- it's already been around for 12 years, so its easy for it to rack up another decade or two.  This is especially true considering that crypto hasn't even hit it's peak yet.

If organized governments do well, then Crypto will do well do because more larger actors (gov't, companies) will find uses for crypto.  If organized governments don't do well, crypto will be the last refuge of value.

If you're interested in this, feel free to post any questions here.  If you think you'll use this, add feature request here too!  Our official discussion is in the discord link above.

vSPY by ItoVault is an open source, decentralized finance (defi), token that tracks the S&P 500, with dividends included in the token price.  vSPY offers a token that has better returns than stablecoins.  vSPY do not need to be locked, sold, or otherwise transacted to capture the full benefits of owning the S&P 500. 

vSPY is an ERC-20 token trading on the Ethereum mainnet blockchain.  The value of vSPY is backed by ETH locked in a vault, similar to the MakerDAO/DAI system.  No centralized custodian or counterparty needs to be trusted for vSPY to hold its value.  Vault owners must maintain ETH in a vault above a safety margin.  If the ETH is below that margin, the vault may be liquidated by anyone in the ecosystem to claim a reward.  This incentivizes vault owners to overcollateralize the vSPY.  Vault owners who deposit ETH and mint vSPY can lever up their long ETH and short vSPY position.  Likewise, vault owners may deposit vSPY and withdraw ETH to create an opposite position: to be levered long vSPY and short ETH.

Quick vSPY Facts:

- Based on the open-soure ItoVault system.
- Decentralized finance: a smart contract holds the backing funds, not any counterparty.
- Dividends on S&P 500 automatically integrated into price.  Just buy and hold vSPY to capture full S&P 500 value.  No locking or complex transactions needed.
- Currently a 30% maintenance margin for vaults.
- Deposit ETH, mint vSPY and repeat to obtain levered ETH-vSPY positions.
- Deposit vSPY and withdraw ETH (with a margin) to obtain levered vSPY-ETH positions.
- No system fees for using vSPY.
- ERC-20 token standard.
 

Main Pages:

Whitepaper
https://www.itovault.com/wp-content/uploads/2020/11/ItoVault-V1.0-Whitepaper-PDF.pdf

Uniswap: Buy, Sell, or Provide Liquidity:
https://app.uniswap.org/#/swap?outputCurrency=0x3e1e15AFD5d50b090aDcC88160dD84a48EA1B80E

Mint vSPY Tokens:
https://www.itovault.com/tools/

$100 vSPY Promo for Customer Feedback
https://itovault.com/get-100-in-vspy-tokens-talk-to-us/



Other Pages:

Blog:
https://itovault.com/welcome-to-the-blog-of-itovault/

FAQ:
https://itovault.com/faq/

Etherscan Smart Contract Address:
https://etherscan.io/address/0xf9e8c18a855183246dbf19c8b249921fa64bd33c#code

Buy vSPY on Uniswap:
https://app.uniswap.org/#/swap?outputCurrency=0x3e1e15AFD5d50b090aDcC88160dD84a48EA1B80E

Learn More About vSPY on the FAQ

Using mBTC is a good idea!  People definitely have a unit bias, and with BTC at $40,000, people see that number and think that it can't go up much more. 

Then you have coins like XRP exploiting this bias and having 30 cent coins.

I don't think that a big correction is going to come in the next few days.  While the price skyrocketing  from $10K to $40K seems like a large move to those of us suffering in the "Bitcoin winter" of 2018-2019, it has *only* 2x since the last peak of about $20K.  This shows that fundamental price levels aren't that 'overvalued' yet and we don't need like a 2x pullback or anything.