"zero risk" does not exist
It seems incredible but after more than 6 years in this ecosystem I am still a "sea of doubts".
I have to say that during this past bullish cycle I think I have managed to play my cards correctly, I have been able to take profits on time as we went up by selling shitcoins gradually, I have not touched my BTC and I have even accumulated double with what I feel glad.
Since we dropped below $22,000, my mindset changed, the accumulation mode was activated again, especially in BTC, and since then there has not been a single day that I do not buy a constant amount of dollars in BTC, and weekly I am also buying constant amounts in $ in form of other crypto that will generate profits in the long term...
However, I still have a lot of "liquid", almost 60% of my total portfolio is made up of stablecoins. USDT, USDC, BUSD, HBD... but I have to say that I'm not at all comfortable with it given the events that have happened in recent months, starting with the LUNA crash and ending with FTX.
I still think that the chain of disasters has not ended yet, everything that had any relationship with LUNA, FTX and ALAMEDA is in danger and there I also include stablecoins of dubious audit...
TETHER, the queen of the stables, has me literally "scared", there is no transparency in its holdings in Dollars, it is said that its reserves in dollars would only cover around 10% of the total supply of USDT, everything else would be distributed in financial products in the traditional banking style with which nothing prevents them from going to shit too... with this I do not want to increase the FUD even more but the risk exists and if something happened with TETHER I am terrified that it would be the end of the ecosystem as we know it.
As many of you know, apart from father, engineer, and occasional athlete, I am a "recognized Daily Trader" as well, so, I use USDT for it but the rest which I don't use literally "burns" me right now.
I'm still doing DCA as scheduled, but I'm holding "liquid" for when the opportunity is even greater...
The question is, what the hell do I do in the meantime with so much USDT?
I already took 80% of this stable out of the exchanges, the remaining 20%, as I said, I use it for my trades and DCA, but having taken it out of the exchanges ONLY partially mitigates the risk, it does not cancel it out.
To cancel it, I should convert it to USD, which I DON'T WANT, or convert it to another similar stable.
HBD could become that "Pseudo-Stable":
- Pegged to $ with acceptable dispersion (LoL)
- 20% APR if I keep it in savings
- It can be liquidated relatively easily (3 days from when I make the "savings" withdrawal)
I already have over $4000 worth of HBD spread across a couple of my HIVE accounts, earning interest...but I'm thinking it wouldn't be bad to transfer a good amount of those TETHER to HBD, but my risk apprehension still prevents me...
HBD is an algorithmic stable, just like LUNA's UST, remember?
Surely HBD's exposure to a "death spiral" is low compared to LUNA and UST but, the risk exists...
The problem is to quantify how much the risk of HBD is compared to the risk of USDT.
I think if USDT goes to hell, the ENTIRE ecosystem can be affected, including most likely HIVE and HBD, at least temporarily... the probability of this happening however seems "low" today even though we have seen some deppeg of USDT against the $ these past days due to the FTX problem.
This is surely a question for the wisest, @demotruk , @dalz , @edicted , @khaleelkazi among others:
We know or believe that HBD and HIVE are not exposed to any counterparty risk according to @taskmaster4450 , apparently, our biggest risk is to keep the HIVE blockchain as decentralized as possible (do you remember Justin SUN?)...
Could some hostile user/entity, with enough power still shake HIVE and HBD?
How likely is it that the Justin Sun and STEEM case will happen again?
Surely the risk exists but apparently the probability of its occurrence is very low.
And what about our "Korean friends", large Pump&dump manipulators exchanges, capable of expertly pumping and lowering the price of a token (HBD) on a few occasions already and who perhaps have been exposed to the whole FTX problem?
I still think that HBD may be the safest option, apart from BITCOIN of course... however, I have not just obtained the "ZERO risk".
Absolutely someone can still come in with a lot of capital and attack Hive and HBD. In the short term they can do a lot of damage, though I would expect overall they would waste their money and we would end up better off. Still, short term damage can become long term falling behind, by losing users and giving the opportunity to a competitor to take our place.
Neither Hive nor HBD should be considered 'zero risk'. Hive especially is still very high risk. HBD is lower risk but still risky, it's just that IMO 20% APR is substantially more than enough to compensate for that risk.
IMO TetherUSD is far riskier than HBD without sufficient compensation for that risk, but to each their own in making that determination.
Thanks for your reply, however, if HIVE falls abruptly, would not be also HBD be affected?
The increased risk with Hive is the potential for Hive to drop drastically in price. Some of that risk gets transferred to HBD in the sense that you may not get full value out when you want to withdraw on the market at a particular time, and even using HBD convert as an alternative to the market has risks.
But to transfer the risk to the point that you wouldn't get your value out eventually, we would need to be in death spiral situation, which while possible I think we are doing a lot to make that a very unlikely scenario, and I think the APR more than compensates for what remains of these risks.
Thanks!!! 20% is indeed massive
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I also think we can't entirely say there's zero risk especially with these Stablecoins you mentioned, I think HBD would be my best bet.
Would be nice to hear the opinions of others over this scenario.
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Spread it over multiple stables like USDC, HBD, DAI, and whatever. I doubt all of them will fail. I also doubt USDT will.
I get your feelings though, I have been going through some similar ones the past few days questioning almost everything about crypto.
This could be a sign of a potential bottom.
for once you seem to be more positive than me 😂
Everything has a turning point...
Zero risk doesnt exist in any place... but right now HBD savings seens to be the best option... if the prices goes a little down the 20% can compesate the lost at long term
How is your position in respect of BUSD?
It’s a centralized stable coin, not better than tether
But do you think that all centralized stable coins will fail? Don't you think we need some stable coins to measure up the rest to?
Yes, I think we need stable coins but fully backed by dollars