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> I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right? That wouldn't be obvious at all to me;
by cesarb 4y ago
> I mean it should be obvious that anyone who offers 8% interest has to do some high-risk stuff with your funds, right?
That wouldn't be obvious at all to me; the lowest-risk investment in my country (federal government bonds) is currently offering over 13% interest (https://www.tesourodireto.com.br/titulos/precos-e-taxas.htm https://www.tesourodireto.com.br/titulos/precos-e-taxas.htm).
- nwatson 4y agoThat's for bond purchase and payback in Brazilian Reais with a bona fide government (with Lula back). To guarantee an 8% payback in crypto is a completely different game, and there's a significant downside for someone taking the deal. The expected return rate is always going to be negative on a proposition like that.
- lupire 4y agoLula might be a good guy, but that doesn't mean he has immediately restabilized the country.
- quickthrowman 4y agoThe classic ‘risk free’ asset is US Treasurys, the US has never defaulted on its debt. Any yield above the risk free rate has implied risk, Brazilian bonds yield 13% because Brazil has defaulted on its debt several times. Brazilian bonds are at least an order of magnitude riskier than US Treasurys, and probably more than that. FTX was paying well above the risk free rate (currently 3.25-3.5%, it’s been climbing since January 2022), implying they were taking risk to earn the yield they were paying.