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Author Topic: BTC interest rate  (Read 101 times)
theymos
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July 07, 2018, 10:41:47 PM
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Has anyone ever analyzed the actual interest rates of the BTC economy? Because BTC is long-term-deflationary, you'd expect interest rates to be very high, but I don't know of any actual analysis. For example, it'd be interesting for someone to analyze the threads in the Lending section to produce some interest-rate charts.

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July 08, 2018, 12:24:33 AM
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Probably the best way to get the data from would be Poloniex' (and BitFinex) lending market (definitely more volume than lending section). But I doubt such data would be reliable for any global bitcoin economy interest rates analysis, as there's too many factors to consider before reaching any conclusions. At very least, you'd have to exclude effects of major "snapshot block" style airdrops and forks (ie. rates on Polo went from something like 0.01% to even >4% a day, iirc, just before BCH fork).

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July 08, 2018, 12:48:39 AM
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Interest rates for what? bitcoin? I would expect the cost to borrow a deflationary asset to be very low, if not below zero because the cost to repay said asset will increase in real terms over the course of the loan.

You can see the average cost to borrow BTC on bitfinex here (data goes back to July 2013), and you can see the last 3 months of the cost to borrow BTC on bitfinex, poloinex and Quoine here.

You can also use prices on Bitmex futures to calculate effective BTC interest rates, although USD interest rates will also need to be considered. Futures prices more accurately reflect the difference between USD interest rates and BTC interest rates.

The above reflects interest rates for very well capitalized loans (with automatic liquidation upon the value of collateral falling too low), and is a baseline similar to how the prime rate is a baseline index for USD based consumer loans.

Consumer loans based on BTC generally have a higher spread over the index than USD based loans given by traditional banks because collecting on loans in the BTC economy is very difficult, loan amounts often too small to economically collect on loans, and most lenders lack the ability to effectively measure risks.

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July 08, 2018, 07:07:42 AM
 #4

Has anyone ever analyzed the actual interest rates of the BTC economy? Because BTC is long-term-deflationary, you'd expect interest rates to be very high, but I don't know of any actual analysis. For example, it'd be interesting for someone to analyze the threads in the Lending section to produce some interest-rate charts.

I`m still not sure about something.Is there such a thing called "bitcoin economy".Bitcoin is more like a financial asset,I don`t see many sellers accepting bitcoin payments for goods and services.The cryptocurrency markets are not an economy,they just don`t create any value in the form of new goods and services.
Interest rates are usually high because of the risk of inflation,not deflation.
I think that bitcoin isn`t very "loan-friendly" currency.Volatile,irreversible transactions and pseudoanonymousy.
By the way,wow the owner of bitcointalk posts topics?!?I wasn`t expecting this. Grin

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August 03, 2018, 08:10:02 AM
 #5

Has anyone ever analyzed the actual interest rates of the BTC economy? Because BTC is long-term-deflationary, you'd expect interest rates to be very high, but I don't know of any actual analysis. For example, it'd be interesting for someone to analyze the threads in the Lending section to produce some interest-rate charts.
This market is difficult to predict and difficult to analyze accurately. Because of the volatility of the common market, it affects them. However, electronic money or bitcoin will remain in the market, especially as it will have more features for the community.

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August 03, 2018, 09:14:06 AM
 #6

Has anyone ever analyzed the actual interest rates of the BTC economy? Because BTC is long-term-deflationary, you'd expect interest rates to be very high, but I don't know of any actual analysis. For example, it'd be interesting for someone to analyze the threads in the Lending section to produce some interest-rate charts.
I have read some of the articles, we saying that the investors are still interested in Bitcoin and they more of that, are feeling positive about its future so we can anticipate the growth sooner or later.

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August 03, 2018, 09:49:17 AM
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Well, usually the interest rate is slightly higher than the inflation rate. Right now the bitcoin inflation rate is at 3.90% per annum (https://www.bitcoinblockhalf.com/) so maybe interest rate about 5.00% per annum will do. *That's just a rough estimation though...

Concept:
Code:
Interest rate = Inflation rate + risk premium
Since lend and repayment in BTC, risk premium should not that high.

But if you take into account price fluctuation in USD, then I'm afraid that the above formula is not suitable.

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August 06, 2018, 09:41:05 PM
 #8

Has anyone ever analyzed the actual interest rates of the BTC economy? Because BTC is long-term-deflationary, you'd expect interest rates to be very high, but I don't know of any actual analysis. For example, it'd be interesting for someone to analyze the threads in the Lending section to produce some interest-rate charts.
The economy of bitcoin is also heavily dependent on other sectors of the economy. Wish to be linked together into a closed chain. Cohesion creates the up or down of the market. And the interest rates that have come out, new projects also want to create capital to collect more bitcoin.
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