I was one of the idiots trying to increase LTH BTC by leveraging BTC to buy more BTC in the dip, then slowly repaying the margin loan from other income. (Plus doing some of that "borrow against your BTC!" stuff for other purposes; this is the succinct version.)
That's similar to what Saylor does. Why shouldn't I do it? Oh, yes, because Saylor has access to lending terms that are not insane.
Exactly.
These are the dumb kinds of things that normies try to do when they have failed/refused to solidify their basics and they have also failed/refused to account for a lot of the factors.. . sure one factor is that Saylor can negotiate decently good lending terms, and another thing is that he and his company have a whole hell of a lot of alternative sources of payment, including also having pretty damn strong ongoing positive company cashflows, too.
Exchange margin accounts make loans on the worst possible terms:
You fucking cannot be doing what Saylor is doing if you are using the terms of the exchange(s) for your loans. Fuck that nonsense... it is not even close to the same.
If the fuzzy-notional price of an oracle (not even the real market order-book price) dips even one microdollar below exactly $x for even one microsecond, then a robot instantly trashes your collateral. Sells down, market-dumps - with liquidation penalty.
Well if you know that you are being manipulated (and the exchanges are engaging in such manipulation practices (or the traders playing with those tools on the exchanges), then you are not really doing anything close to what saylor is doing.. you are gambling at a roulette table or something similar to that.
You get no "margin call", as in a traditional margin account. (Or as Saylor would receive, if BTC crashes low enough.) If you have other assets elsewhere, you get no opportunity to decide how best to limit your own overall losses. If you have other assets elsewhere, they are not considered when calculating your account's risk of default. And BTC is sufficiently volatile that there is no "safe" level.
You seem to know quite a few of the parameters, but still sounds like you believe that you can beat the game... by fucking around and trying to play it.
Better strategies include spending a decent amount of time to build a large investment portfolio, and how do you do that? DCA through time, and build it up 4-10 years or longer.. and maybe if you want to fuck around with less than 10% of your holdings, then that might be o.k... but probably better to limit yourself to lower amounts (such as 1%) and then work out your system in order that you are consistent before working yourself up to using something like 10% of the value of your overall investment portfolio...
There are ways to make sure that you are not losing money and/or not putting much if any of your principle at risk... but you have to start out with small amounts and learn how to do it well before increasing your amounts... and also there are ways to hedge too.. and to figure out formulas for being able to bet in either direction.. even though in BTC it likely remains better to skew your bets in favor of UP.. and that is by making sure that you are building and maintaining a HODL stash.
...And there is no accounting for the fact that a fluctuation bottoming out slightly below your liquidation price may last only hours, minutes, or even seconds. At 00:00 UTC today, my liquidation price level was about $29,975. Seems safe, yes? Well, there was a time when it seemed safe. "If Bitcoin stays over $30k, I am ok."
The oracle only priced BTC below $30k for a brief time, sometime between 00:00 and 01:00 UTC. In that time, I market-dumped several chunks adding up to 0.5 BTC. When I hit the dread SELL button the first time, I saw my health meter flash as low as 0.01%... yes, I cut it that close; and I am damn lucky.
With no time to think, no time to make calculations, no time to set limits, I just kept shaving down as the price oracle kept dropping. I was running away, as the "official" price chased me down towards the mid-$29k range.
Then, suddenly, the oracle was back over $30k; and my last sale was the absolute lowest actual sale today on this exchange. I personally cut through the book, and made the very bottom of the wick! It was all over in minutes.
If I had not caught it - if I had not sold anything - then a robot would have dumped much more out of my account. (And done it all at once - probably cutting through the order book as low as $29k or even lower, due to how market maker bots arrange their orders during times of high volatility.) My total losses would have been catastrophic. By market-dumping 0.5 BTC at the bottom, I saved (multiple-times 0.5) BTC.
I have other money and assets that I may have preferred to lose, in preference to selling BTC so low. But there was no time for that.
The lesson should not be that you were lucky, but instead, learn how to NOT have to fuck around with having to depend upon luck.. or at least not too much luck.
I am not against risk or luck, but you gotta be careful not to be overly dependent upon luck.. that would be called gambling and not investing..
but hey maybe you prefer being a gambler and losing money even on a winning asset (namely bitcoin)?
The problem is not borrowing money to buy BTC. (Is it a problem for Saylor?) The problem is borrowing money on the worst possible terms. Positively malicious terms.
Well perhaps you have identified one of the differences between you and Saylor. Hopefully, you will attempt to appreciate that there are likely a lot more differences.. especially when a guy is using company assets too. Are you using company assets and figuring out (tailoring) an approach that is working with your variables that include at least your cashflow, other investments, view of bitcoin as compared with other investments, timeline, risk tolerance, your time, skills, abilities to plan, strategize and learn along the way which may also include reallocating and/or trading or the use of debt and/or other financial instruments.
Think about all of those factors in the above list, and the factors in the beginning are more basic and in need of really figuring out before getting to more advanced techniques that are later in the list.
For most other types of loans, a borrower's default is not in the lender's best interest. Collecting on defaulted accounts is lossy, and high-overhead. Therefore, even the harsher parts of the lending terms tend to be tempered by the lender's desire not to need to deal with delinquent or defaulted accounts. Most lenders seek to minimize defaults.
Yes.. of course there are better ways to get money and to negotiate better terms.. If you cannot get or work with better ways to get cashflow then maybe you are not even trying to adequately account for various factors - several of which you already seem to know about.
The entities offering cryptocurrency margin accounts have a perverse incentive to stack the loan terms to maximize borrower defaults.
You cannot blame them. You can ONLY blame yourself for either using such services or using such services without adequately figuring out the dynamics, including but not limited to perhaps playing with way smaller amounts of value while you learn the ropes and try not to take too many risks.. and account for trying to win without putting your principle at risk.
Want to buy BTC at a discount? Set up an exchange, offer margin accounts, wait for the dip, and then stockpile BTC in cascading liquidations!
If you know it is rigged then why play? or are you trying to proclaim that you just learned these things? You hadf not known about it previously?
The whole cryptocurrency margin ecosystem has the incentives of loan-sharking. Those incentives are exploited in full accord with the ethics of people who also profit from pump-and-dump Ponzi-coins.
And, you want to play in those games? Maybe you should establish your own exchange so instead of getting fucked, you can fuck others? Is that what you learned from your recent experiences?
You need to be either stupid or crazy to take a loan on these terms, for almost any purpose.
I am sure that not everyone is losing money by participating in those services.
To avoid accusations of deficient IQ tantamount to mental retardation, I plead a bout of temporary insanity. Do I know better than to do this? Yes, I do. Why did I do it - why, why, why!? I have asked myself that many times, after I got in too deeply to get out fast without drastic losses. Chalk it up to temptation, starting with a little bit of something really safe ("lol, I can survive a crash even to $10k!"), then one thing leading to another as the account spins out of control.
Seems that you thought that you had accounted for more than you had. And, yeah if you want to gamble, then you have to be careful about the more experienced players at your table and you are playing as an amateur at a professional table, then what do you expect to happen?
Gun, knife, poison... suggestions? Self-immolation is cool hot.
It is probably better to learn to not be fucking around with those kinds of things.
Set yourself up with a more boring approach including establishing your budget first, and then maybe DCA $10 to $100 per week or maybe more, and then you can also figure ways to buy the dip and lump sum invest, and after 4-10 years or longer, you are likely going to be in a decent position.. Also try to learn along the way so you can tweak your strategies from time to time as you go... don't be fucking around with trading.. especially in the beginning and especially you should not be playing around with margin.. .. until you learn how to do it and start with very small portions of your overall portfolio.. if you are going to do it, and even if it is necessary at all in order to build wealth.. i have my doubts that is it even necessary to fuck around with either trading or margin.. especially prior to building a decently sized portfolio first, and by the time you build a decently sized portfolio, then you probably won't even want to fuck around with risking the value within the portfolio that you had built.
ramen
Eureka: Self-starvation! That's the ticket.
Or perhaps, I should be happy that I kept most of my BTC (for now), and simply work on extracting it from this debt trap. Don't expect prompt replies. I am busy with that, plus lots of this:
Well hopefully death_wish, you can get yourself organized and reoriented and learn a lesson not to be fucking around with gambling.. when it is much better to work out some kind of a long term investing strategy.. and sure maybe you believe that long-term investing is boring and you want to accelerate your getting rich into a getting rich quick.. and in the end, getting rich tends to take a decently long time, and you will likely have better chances towards getting rich by not fucking around with margin and trading but instead focusing ur lil selfie on accumulating BTC through ongoing buying and HODLing.. and 4-10 years down the road, you will likely be in a way better place than by screwing around in terms of trying to time the ups and downs of the market blah blah blah.
Poll
