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The DeFi Chronicle: Earn 5.75–20% yield on Bitcoin
Lending out Bitcoin is an easy and effective method for growing your Satoshi stack and staying invested when the crypto markets are volatile (AKA always). I’ve heard Michael Saylor and others say that it doesn’t make sense to risk precious Bitcoin by lending it out. I’d agree if I had billions of dollars to invest. Unfortunately, I don’t. I will begin by illustrating why earning yield on Bitcoin makes sense and then share 4 ways I am doing it.
Tima Miroshnichenko from Pexels
When I began my ARC method for Bitcoin, I was immediately drawn in by the idea of earning Bitcoin on my Bitcoin. Let me share how and why this has been important. Let’s say that we are starting to invest in Bitcoin today. We purchase 0.1 BTC for $5000.
Focusing on the 0.1 Bitcoin that we purchased, imagine earning a 10% per year yield on the Bitcoin. After 1 year, we have 0.11 Bitcoin. Let’s assume that Bitcoin increases in value from $50K to $75K.
The 0.01 (0.1x0.010) Bitcoin that we earned in rewards is now worth $750. So our initial 0.1 is worth $7500 and with our yield of 0.01, our stack is worth $8250. We have seen a 65% increase in dollar terms versus a 50% increase had we not been earning yield.
Now, let’s imagine the same scenario where the price of Bitcoin goes down over the next year. Instead of it being worth $50K, it is now $25K…
