4 ms·

He actually put in $300k, so his shares are worth around 2.4 billion now

janandonly 6y ago
Did he? If he simply bought bitcoins with his $300.000 in 2012 (average bitcoin price of $8) then his net worth now would be .... 37500 bitcoins or $2.362.500.000 ... 2 point 3 billion frigging dollars...
- pinkybanana 6y ago
  It is actually interesting thought pattern, which would be better investment? With owning private equity there is also lots of work involved I would guess, with BTC you just sit on it... Latter is of course very hard in volatile market, while PE you probably can't liquidate.
- lpapez 6y ago
  In theory yes. In practice, cashing out billions of dollars worth of stocks is easier than cashing out billions of dollars worth of crypto.
  - rawtxapp 6y ago
    You wouldn't be selling those on the open market, institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets. Another option is, now that it's becoming clear to people that Bitcoin is here to stay, you can just borrow against it to spend (avoid taxes, hold on to the upside). Case in point, this person/group borrowed 300M$ with about 1B$ net worth[1]. 1: https://defiexplore.com/cdp/8463 https://defiexplore.com/cdp/8463
    - pushrax 6y ago
      I'm new to this. Is the collateral locked into the contract and unspendable until the contract is closed? It's also kind of unclear what the interest is from that page. edit: apparently it's 8.5% https://mkr.tools/governance/stabilityfee https://mkr.tools/governance/stabilityfee
      - rawtxapp 6y ago
        It's just a smart contact vault, you can put collateral, take it out whenever you want, you just need to make sure that at any given point in time you have at least 150% of your debts value in collateral in the vault. This person is at over 400%, so very conservative borrowing, can withdraw some collateral. There are also centralized versions with blockfi if you prefer traditional loans.
        nly 6y ago
        150% collateral (66.7% LTV) seems fairly risky for an asset like Bitcoin tbh
        rawtxapp 6y ago
        It handled the black swan event of complete market crash at the beginning of the pandemic pretty easily. And the other thing is Bitcoin's market cap is well over 1T$ now, as expected the volatility goes down as the market cap goes up. I suspect those ratios are going to come down significantly within couple of years.
        pushrax 5y ago
        I read a bit online after this, and saw various recommendations for people with CDPs to keep more like 300% collateral. If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.
      - rawtxapp 5y ago
        The interest rate varies based on collateral: https://oasis.app/borrow/markets https://oasis.app/borrow/markets. Eth is between 3-9% depending on liquidation ratios, and wBTC is at around 4.5% and both of these numbers are drops in the bucket when you consider that the collateral has appreciated a lot more than that. And one more thing, it's not technically an interest rate, it's a stability fee (which btw, gets burned, used to go back to stakers, but they removed that).
        5y ago
    - solveit 5y ago
      > institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets. This is misleading. The markets definitely move, they just don't show a massive spike in the charts.
    - cableshaft 5y ago
      I still don't completely get the borrowing against your bitcoin. You'll end up having to pay that back with interest, so it's going to end up costing you more assuming the price stays the same. Are people just banking on the assumption that it's going to go up higher than how much they have to pay back over time? What if that stops being true 5 years from now somehow, like another coin becomes dominant? Not saying it's likely, I do think Bitcoin will probably still be doing well in 5 years, but I'm not certain of it.
  - pinkybanana 6y ago
    How so? For example coinbase is happy to convert your early bought coins to fiat if you want, and these days the liquidity is billions. I haven't looked at Coinbase stock liquidity, but I would be it is worse as BTC liquidity.
  - paulpauper 6y ago
    OTC private block trade it's not like the btc must be sold on an exchange
- Kiro 6y ago
  What do you mean? How is that any better than the 2.4 billion worth of Coinbase shares he has now? You phrase it like he made a mistake and lost out on a huge profit but the ROI is exactly the same so really don't understand your comment.
  - kgc 6y ago
    Actually at one point Bitcoin had an equal fork, so that number should be double for Bitcoin.
    - STRML 6y ago
      Not quite equal. At its peak Bitcoin Cash was about 25% of Bitcoin, and at a much lower price too. If you reinvested it at exactly the right time, you could multiply total yield by 1.25, but that's a big if.
      - cableshaft 5y ago
        Yeah, Bitcoin Cash is nowhere near its peak ~4 years ago, when it was like $2500 (it's $824 a coin this morning). It has not kept up with Bitcoin at all this bull run (although it has gone up, just nowhere near at the same rate). So yeah it'd be nowhere near double today's Bitcoin value.

Did he? If he simply bought bitcoins with his $300.000 in 2012 (average bitcoin price of $8) then his net worth now would be .... 37500 bitcoins or $2.362.500.000 ... 2 point 3 billion frigging dollars...

pinkybanana 6y ago
It is actually interesting thought pattern, which would be better investment? With owning private equity there is also lots of work involved I would guess, with BTC you just sit on it... Latter is of course very hard in volatile market, while PE you probably can't liquidate.
lpapez 6y ago
In theory yes. In practice, cashing out billions of dollars worth of stocks is easier than cashing out billions of dollars worth of crypto.
- rawtxapp 6y ago
  You wouldn't be selling those on the open market, institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets. Another option is, now that it's becoming clear to people that Bitcoin is here to stay, you can just borrow against it to spend (avoid taxes, hold on to the upside). Case in point, this person/group borrowed 300M$ with about 1B$ net worth[1]. 1: https://defiexplore.com/cdp/8463 https://defiexplore.com/cdp/8463
  - pushrax 6y ago
    I'm new to this. Is the collateral locked into the contract and unspendable until the contract is closed? It's also kind of unclear what the interest is from that page. edit: apparently it's 8.5% https://mkr.tools/governance/stabilityfee https://mkr.tools/governance/stabilityfee
    - rawtxapp 6y ago
      It's just a smart contact vault, you can put collateral, take it out whenever you want, you just need to make sure that at any given point in time you have at least 150% of your debts value in collateral in the vault. This person is at over 400%, so very conservative borrowing, can withdraw some collateral. There are also centralized versions with blockfi if you prefer traditional loans.
      - nly 6y ago
        150% collateral (66.7% LTV) seems fairly risky for an asset like Bitcoin tbh
        rawtxapp 6y ago
        It handled the black swan event of complete market crash at the beginning of the pandemic pretty easily. And the other thing is Bitcoin's market cap is well over 1T$ now, as expected the volatility goes down as the market cap goes up. I suspect those ratios are going to come down significantly within couple of years.
        pushrax 5y ago
        I read a bit online after this, and saw various recommendations for people with CDPs to keep more like 300% collateral. If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.
    - rawtxapp 5y ago
      The interest rate varies based on collateral: https://oasis.app/borrow/markets https://oasis.app/borrow/markets. Eth is between 3-9% depending on liquidation ratios, and wBTC is at around 4.5% and both of these numbers are drops in the bucket when you consider that the collateral has appreciated a lot more than that. And one more thing, it's not technically an interest rate, it's a stability fee (which btw, gets burned, used to go back to stakers, but they removed that).
      - 5y ago
  - solveit 5y ago
    > institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets. This is misleading. The markets definitely move, they just don't show a massive spike in the charts.
  - cableshaft 5y ago
    I still don't completely get the borrowing against your bitcoin. You'll end up having to pay that back with interest, so it's going to end up costing you more assuming the price stays the same. Are people just banking on the assumption that it's going to go up higher than how much they have to pay back over time? What if that stops being true 5 years from now somehow, like another coin becomes dominant? Not saying it's likely, I do think Bitcoin will probably still be doing well in 5 years, but I'm not certain of it.
- pinkybanana 6y ago
  How so? For example coinbase is happy to convert your early bought coins to fiat if you want, and these days the liquidity is billions. I haven't looked at Coinbase stock liquidity, but I would be it is worse as BTC liquidity.
- paulpauper 6y ago
  OTC private block trade it's not like the btc must be sold on an exchange
Kiro 6y ago
What do you mean? How is that any better than the 2.4 billion worth of Coinbase shares he has now? You phrase it like he made a mistake and lost out on a huge profit but the ROI is exactly the same so really don't understand your comment.
- kgc 6y ago
  Actually at one point Bitcoin had an equal fork, so that number should be double for Bitcoin.
  - STRML 6y ago
    Not quite equal. At its peak Bitcoin Cash was about 25% of Bitcoin, and at a much lower price too. If you reinvested it at exactly the right time, you could multiply total yield by 1.25, but that's a big if.
    - cableshaft 5y ago
      Yeah, Bitcoin Cash is nowhere near its peak ~4 years ago, when it was like $2500 (it's $824 a coin this morning). It has not kept up with Bitcoin at all this bull run (although it has gone up, just nowhere near at the same rate). So yeah it'd be nowhere near double today's Bitcoin value.