Most people don't know this, but you can loan your coins on Poloniex.
This steem blog from 11 months ago covers it in detail: https://steemit.com/bitcoin/@animalrobot/the-long-and-the-short-of-lending-on-poloniex
I've been loaning BTC for about a month now, and the average rate is roughly .155%. After Poloniex takes their 15% cut out, I'm getting just about .13% a day. That's a pretty phenomenal rate if you think about it. If you run 2 day loans and almost always have your coins loaned out, after a year you will have (1+(.0013*2))^182 = 1.60, or 60% increase in your bitcoins.
Generally the loan prices for BTC are much higher than other coins. For instance, ETH loan rates are .0001% per day: I'm guessing the reason is because BTC trades with more coins on poloniex. But once in a while loan rates for other coins shoot way up. That's exactly what is happening the last ~30 hours.
Bitshares Loans
Bitshares usually has similar rates to ETH for loaning, but the current loan rates for bitshares are out of control:
They were even higher yesterday. I have a few loans running near 2% per day! If just the 1% rates over 2 days kept up for a year like in the previous example with .155% for BTC: (1+(.0085*2))^182 = 21.49!!! I would 21.5x my money in a year.
Why is this happening?
This can mean two things, the price rising and the loan rates high, but I think they are correlated. I'll start with the rising price.
Reasons price are rising:
- interest in other platforms built by
: steem and EOS
- long form TED talk by
~10 days ago: it was a little cringeworthy for my tastes, but if you can look past the infomercial type push, the technology is really incredible: https://steemit.com/bitshares/@stan/bitshares-hit-by-cat-5-miracle-of-heroic-proportions
- the loan rates are high
Reasons the loan rates are high:
- price of bitshares shot up unexpectedly and people want to short it
So we have these two contradictory forces: people wanting to short BTS because of rising price for seemingly no apparent reason, but people wanting to buy BTS because the loan rates are incredibly high.
Spoiler alert, the loan rates are winning:
A positive feedback loop has been created:
Step 1: BTS price goes up
Step 2: People want to short it, and the loan rates go up
Step 3: People see the high loan rates and instead of wanting to sell it, they want to buy more to loan it.
Step 4: Back to step 1.
This is pretty bubbly, and it should pop at some point.
- If you have bitshares on Poloniex, I highly suggest loaning them.
- If you have bitshares elsewhere, it may be a good time to take some profits if you are risk averse. I'm not =]
- If you want to put bitshares on poloniex to loan them, I suggest you read this blog by
first: https://steemit.com/crypto/@razvanelulmarin/don-t-keep-your-coins-in-exchange#@daut44/re-razvanelulmarin-don-t-keep-your-coins-in-exchange-20170608t204505358z
- If you have another alt coin on Poloniex and don't fully believe in it, then maybe you should trade them for bitshares to loan them out.
Keeping your coins on an exchange is riskier than a hardwallet where you control the private keys.
Just wanted to relay my thoughts on the matter before we have to see another post from someone looking at a graph that looks like a teacup and tries to predict what the price will do tomorrow. The best predictor of tomorrow's price is today's price, because if there was information that makes the price go up or down tomorrow, it would make the price go up or down today. So ignoring price changes, people probably want to take advantage of these high loan rates and are buying.
Take all my advice with a grain of salt. I am not a trader and I do not have a great grasp on maximizing the day to day swings of currencies. Just posting my thoughts on the matter. GL everyone!
My name is Ryan Daut and I'd love to have you as a follower. Click here to go to my page, then click in the upper right corner if you would like to see my blogs and articles regularly.
I am a professional gambler, and my interests include poker, fantasy sports, football, basketball, MMA, health and fitness, rock climbing, mathematics, astrophysics, cryptocurrency, and computer gaming.