MAHDOOD on Nostr: But the amount of Bitcoin has not changed. So where is the yield? When I buy a bond, ...
But the amount of Bitcoin has not changed. So where is the yield?
When I buy a bond, I’m getting more dollars back. That is the yield. Like a 5% interest savings account. Or like how Celsius was offering x% yield on crypto. The yield is the percentage you’re getting back. And the risk is that they lose all your money.
In the case of a Bitcoin loan, the Bitcoin’s value goes up. But the amount of Bitcoin is the same. That’s why I said 1 Bitcoin = 1 Bitcoin. There is no yield with a Bitcoin loan. The growth in value in fiat terms has nothing to do with the loan. The risk is that the person holding your bitcoin while you pay back the loan can rug you. But that’s still not yield. The value of your bitcoin would be the same if you never took out the loan and never sold it. So it’s not yield.
Unless my understanding of yield is different from yours 🤷♂️
The internet seems to have conflicting definitions of yield.
When I buy a bond, I’m getting more dollars back. That is the yield. Like a 5% interest savings account. Or like how Celsius was offering x% yield on crypto. The yield is the percentage you’re getting back. And the risk is that they lose all your money.
In the case of a Bitcoin loan, the Bitcoin’s value goes up. But the amount of Bitcoin is the same. That’s why I said 1 Bitcoin = 1 Bitcoin. There is no yield with a Bitcoin loan. The growth in value in fiat terms has nothing to do with the loan. The risk is that the person holding your bitcoin while you pay back the loan can rug you. But that’s still not yield. The value of your bitcoin would be the same if you never took out the loan and never sold it. So it’s not yield.
Unless my understanding of yield is different from yours 🤷♂️
The internet seems to have conflicting definitions of yield.