Cloud Hosting

You might soon pay your mortgage with Bitcoin here's why you'd want to

U.S. mortgages have taken a step into the unknown, with an announcement from the nations second-largest home lender that it will soon allow borrowers to make their monthly payments in cryptocurrency.

"Were excited that hopefully, (by the end of September), we can actually execute on that before anyone in the country," United Wholesale Mortgage CEO Mat Ishbia said during an earnings call with Wall Street analysts last week.

Giving borrowers who've locked down historically low mortgage rates more flexibility to make their payments would have benefits for a lender. But are there any real advantages to paying your mortgage with Bitcoin, instead of using cash?

Krakenimages.com/Shutterstock

UWM the No. 2 U.S. mortgage lender after Rocket Mortgage believes accepting Bitcoin will provide added convenience for its borrowers.

"We have nearly 1 million consumers who pay us a monthly mortgage payment," Ishbia says, "and if accepting Bitcoin or other types of crypto makes it easier for our clients, were going to find a way to do it."

Tech journalist Naomi Brockwell hailed UWMs decision during a recent interview with Coindesk. She said that while Bitcoin hasnt proven itself especially useful for making payments in the past, mortgages could be a different story.

"When youre dealing with large amounts for houses, this is precisely the kind of use case that I think Bitcoin is good for, in terms of payments," Brockwell said.

For borrowers with crypto reserves to tap into, making mortgage payments could be easier at the times Bitcoin values are surging. But when MoneyWise asked UWM for specifics on how the process will actually work for consumers, the company said its "too early to have details at this moment."

Borrowers will be looking for answers to several questions, including these:

Will UWM be accepting actual crypto, or will a consumer need to trade it for dollars first, using a cryptocurrency exchange?

Will Bitcoin sellers be on the hook for additional fees if using a third-party exchange is necessary?

What happens if a delay or crash at an exchange results in a late mortgage payment?

Who will determine the Bitcoin/U.S. dollar exchange rate? Many crypto exchanges post different rates.

"We will communicate the plan to consumers once we have everything in place," Ishbia says.

Story continues

Pheelings media / Shutterstock

If youre a successful Bitcoin investor with a UWM mortgage, using some of your returns to make your mortgage payments could wind up being a handy alternative to paying with cash.

But it wont make your mortgage burden any lighter. There are other ways to do that.

If youre eligible, consider refinancing your mortgage. As the economy improves and inflation heats up, the rock-bottom borrowing costs homeowners have been enjoying for the last year could quickly become a thing of the past. A refi at todays rates could save you hundreds of dollars a month.

If long-standing, high-interest debts are soaking up whatever cash flow is left after you make your monthly mortgage payment, it might be time to consider taking out a lower-interest debt consolidation loan. Youll cut your interest costs, which will help you wipe out your debt sooner.

You also can reduce the cost of homeownership by shrinking your home insurance premiums. A little comparison shopping could lead to big savings whenever you have to buy or renew a policy.

Shopping around also can help you pay less for car insurance.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

See the original post:
You might soon pay your mortgage with Bitcoin here's why you'd want to - Yahoo Finance

When Bitcoin (CRYPTO:BTC) charged back onto the scene late in 2020, it was driven in large part by a new breed of retail traders. Coinbase Global (NASDAQ:COIN)grew in popularity, Square (NYSE:SQ)added Bitcoin trading, and even Tesla (NASDAQ:TSLA) began accepting Bitcoin for vehicle orders.

There are plenty of stories of small investors making hundreds of thousands of dollars, and even millions, in Bitcoin. But some of the really big money is being made by investors who were already extremely rich and got into Bitcoin before most people ever heard of it. And they continue to tout Bitcoin (called "talking their own book"). Here are some of the billionaires making even more billions with Bitcoin.

Image source: Getty Images.

Going back to the early days of Bitcoin, it was the technology that caught a lot of early investors' attention. Whether they saw Bitcoin as a way to store value in a digital form rather than gold (Peter Thiel), or whether they saw it as a better transaction technology, big names in Silicon Valley and Wall Street were early investors.

Notable mentions in the early Bitcoin investor network are Peter Thiel; Dan Morehead of Pantera Capital; and Michael Novogratz, formerly of Fortress Investment Group. These were already successful and already very wealthy investors making even more money off Bitcoin.

As much money as Bitcoin is making for early investors directly, the companies behind Bitcoin, other cryptocurrencies, and the blockchain could make them even more money. And once again, it's not retail investors who are getting rich, it's wealthy venture capitalists making billions on crypto investments.

Venture capital firm Andreessen Horowitz invested in Coinbase's $25 million Series B funding round. According to an analysis done by CNBC, that round returned 381 times the initial investment at its Nasdaq debut price. Andreessen Horowitz had a $9.7 billion stake in the company, and that's not all it's investing in crypto. The firm has invested in over two dozen crypto-related start-ups and recently launched the $2.2 billion Crypto Fund III.

Founders Fund, a venture capital firm run by Thiel, has invested in companies like Bullish, which just agreed to a $9 billion SPAC deal, and BitDAO with its recent $230 million financing round, along with investing in Bitcoin itself.

Michael Saylor has quickly turned MicroStrategy (NASDAQ:MSTR) into a bet on Bitcoin with the firm now holding over 105,000 tokens. Saylor has been one of the most vocal Bitcoin backers in 2021.

Here are some of the other notable venture capital investments in crypto start-ups that could net billions more in profits:

There's a lot of money going into cryptocurrencies and the infrastructure surrounding them. And the big-money investors got in before most of us had heard of crypto.

Building a Bitcoin mining rig. Image source: Getty Images.

Small investors should know what they're getting into with cryptocurrencies like Bitcoin. For better or worse, billionaires got their first, and they're likely to make moves that will protect their wealth in the crypto space. Here are some factors to keep in mind:

Whether you're a Bitcoin bull or bear, this will be an interesting space to watch over the next decade. There are billions of dollars at stake, and some of the biggest names in investing will have a lot to say about the industry's future.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

See the original post here:
Billionaires Have a Lot Riding on Bitcoin's Future - Motley Fool

In a recent ruling, Sweden's government is being forced to pay more than $1.5 Million (roughly Rs. 11 crores) to a drug dealer who was jailed in 2019 after the Bitcoin he had illegally amassed appreciated while he was in custody. Prosecutor Tove Kullberg had earlier succeeded in her argument in the court that the unnamed man should be stripped of his 36 Bitcoins that reportedly stood at SEK 1.3 million (roughly Rs. 1 crores) at the time, that he had earned through the illegal sale of drugs.

However, Bitcoin price skyrocketed since it was seized from the man. When the Swedish Enforcement Authority began to auction the 36 Bitcoins, they had to sell only three of them to generate the demanded amount due to the cryptocurrency's increased value. In other words, the value of the drug dealer's 36 Bitcoins in 2019 is now equivalent to just three Bitcoins.

According to a report by The Telegraph, Kullberg admitted the mistake and told Swedish Radio, It is unfortunate in many ways. She added, It has led to consequences I was not able to foresee at the time.

Now, the authority has to return to the man 33 of the remaining Bitcoins, now worth over $1.5 million. Kullberg noted that the case was the first of its kind in Sweden's legal history. The Bitcoins were seized at a time when there were no precedents on how to treat cryptocurrency profits in court.

Kullberg said, The lesson to be learned from this is to keep the value in Bitcoin, that the profit from the crime should be 36 Bitcoin, regardless of what value the Bitcoin has at the time.

She also suggested taking steps to invest in internal education in the prosecution authority. This would ensure better undertaking of legal proceedings as cases related to cryptocurrency might increase in the future. Kullberg said, "The more we increase the level of knowledge within the organisation, the fewer mistakes we will make."

Read more here:
Sweden Forced to Pay Jailed Drug Dealer Over $1.5 Million in Bitcoin: Find Out Why - Gadgets 360

A major thing that anyone who follows Bitcoin notices is how market sentiment can shift seemingly in moments. Were one Elon Musk tweet away from a bear market, one Tesla earnings report away from a huge bull market. It is about as emotional of a market as you will ever find. The question is: What are metrics that we can use to quantify where we are on this emotional spectrum?

One thing that I like to keep an eye on is the ratio of how the calls and puts are trading in a specific month, lets call it the yield and volatility ratio. Basically, it considers the distance like-priced calls and puts are from the current price of spot bitcoin and divides the difference in price between the calls and the spot bitcoin price by the price between the puts and the spot bitcoin price. How high or low this metric goes is determined by many things, but primarily by the implied volatility of the options skew and the futures yield curve giving the metric its name. This ratio can give a very good idea of how the market is currently forecasting the price of bitcoin. Whats the sentiment? Is bitcoin about to moon? Or is the run over, and we should prepare for a three-year bear run?

Its best to illustrate this by using some examples from the past few months. On May 11, 2021, with the bitcoin spot price at $55,000, lets look at what the ratio was for the September 24, 2021, expiration on Deribit:

The $50,000 put was trading at the same price as the $80,000 call. This means that the put strike was $5,000 away from the spot bitcoin price, while the call strike was $25,000 away from the spot bitcoin price. Dividing the difference in the call strike from spot bitcoin ($25,000), by the difference in the put strike ($5,000), we see that the ratio is at 5:1.

Five to one is a very high score on this metric. As you might recall at the time, bitcoin was in full-on bull-market mode. One trade idea you could use to take advantage of these market conditions would be to do the following:

+Bitcoin at $55,000

+50,000 put

-80,000 call

Zero cost

By trading with this strategy, you would have the following exposure to bitcoin until options expiration:

On the downside, you are long at $55,000, but can only lose money until the $50,000 put strike, where your losses are stopped out, meaning you can lose up to $5,000. To the upside, you will profit until you reach the $80,000 price level, where you are capped at $25,000 profit. This means you can realize $25,000 profit (45% higher), while only risking $5,000 (9%) of potential losses. Notice again, that 5:1 ratio.

I like these odds. Given that I am long-term bullish overall on bitcoin, it can be tough to find suitable ways to hedge your long-term exposure, as I generally dont like selling spot bitcoin. However, when we see the call/put ratio get to levels as high as 5:1, I like hedging a percentage of my overall exposure by selling calls and buying puts.

Contrast that with just over a month later, on June 21, 2021, you could interpolate the ratio for the July 30, 2021, expiry using the following inputs: with the bitcoin spot price at $36,000, the $32,000 puts would match the price of the $41,000 calls. This puts the ratio at 1.25:1.

What would be a trade idea in this market? I like doing the opposite of the recommendation above. This time, it pays to just buy the calls and sell the puts. Think about it, just in pure mathematical terms, the most you can lose on the puts is $32,000 assuming BTC goes all the way to $0. But the upside is unlimited. Given bitcoin and its ability to go parabolic, it doesnt make sense for this ratio to approach 1:1.

What does the ratio look like currently? As we have seen yields increase recently on the latest rally, the ratio has increased, particularly as you go further out in time. As of August 24, the ratio for the December 31 expiry is at 2.80:1. (Note: this is an approximation as it can vary depending on which initial call or put strike you choose. For consistency, I like to select a put approximately 10% lower than spot, and then to solve for the call.) It has certainly bounced off its recent lows, but likely still has more potential to expand in the coming months, especially when higher yields begin to return to the futures market. Its not the worst idea to sell some of the ratio via selling calls or buying puts. But I would do so sparingly, as chances are we will continue to see the ratio grow to higher levels.

Most importantly, although the metric gauges where we are on the emotional spectrum at any certain time, make sure to control your own emotions. Its important to keep a level head through it all and play the hand the market has dealt you.

This is a guest post by Patrick Baker. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Read this article:
The Yield And Volatility Ratio And Creating Major Bitcoin Price Upside - Bitcoin Magazine

David Marcus, co-creator and a board member of Diem (formerly known as Libra), which is a centralized cryptocurrency project initiated by Facebook, emphasized in an interview with Bloomberg on Tuesday, that the company simply doesnt understand Bitcoin, and continues to flounder on delivering even its own altcoin project, or a single NFT.

Marcus confidently told Bloomberg that we think the world needs a better payment system. He implied that after all these years, Facebook is nearly ready to deliver the solution.

It is unfathomable how a company with access to the lions share of the worlds computing power has failed to understand that Bitcoin has already solved the problems of final settlement, near-instantaneous transactions, monetary privacy, permissionless money, and commission-free remittance.

Bitcoin and the Lightning Network are on the eve of being adopted as legal currency by the country of El Salvador in a grand-scale demonstration of all of the virtues Bitcoin has had to offer for years. Facebook hasnt got a clue.

Marcus even commented, Were really falling behind at an alarming rate.

When asked what the hold up is with releasing Novi, Facebooks non-private hot wallet, Marcus assured Bloomberg that Novi is ready now. But as to why it hasnt been issued, he said:

We want to make sure we can earn peoples trust over a long period of time.

This statement ought to be presented here without comment. Over the years Facebook has consistently demonstrated an interest in compromising the privacy of more people than any company on the planet. Issuing NFTs and an in-house, proof-of-stake altcoin through hot wallets is testament to the fact that Facebook is functionally a surveillance company.

Diem is a simple rebranding of Libra, a centralized, proof-of-stake cryptocurrency project initiated by Facebook on its slow, tone-deaf, megalomaniacal quest to solve the worlds money problems. Facebook has been looking into blockchain and promising to bank the worlds unbanked and solve remittance fees for years through this project, but it has failed to deliver any actual products.

The plans for Diem and Libra have both been doomed from the start. Facebooks planned centralized stable coin will not rely on mining or proof of work, and will therefore be no different from any other ICO scam, that is if they can manage to bring it to market. The issuance and control of Facebook tokens will effectively make them a tiny digital form of fiat, operating on a proof-of-wealth concept, whereby stakeholders such as Visa and Mastercard pay to operate large nodes that serve an unclear purpose.

It is unclear whether Facebook has even considered why they would put such a misguided project on a blockchain. There is nothing about Diem that requires a distributed time-stamping server, much less a centralized time stamping server. The firm would be better off issuing and maintaining their future digital fiat from a centralized database, from which they could more efficiently surveil Diem holders and sell data about them.

Blockchains outside of Bitcoin are useless, because Bitcoin already exists. So far, no distributed proof-of-work system has subsumed Bitcoin in terms of function, adoption or decentralization, and each passing day it becomes more unlikely that something can. Bitcoin, the original blockchain technology, was invented in part to fix money by removing the influence of centralized corporations from its issuance. The world doesnt need Facebook, or a centralized, controlled, exceedingly unprivate, permissioned version of Facebook money.

On trust, Marcus commented, I think over time there are going to be more trusted stable coins.

When asked why Facebook deserves peoples trust, and how hed respond to criticism that Facebook is not exactly the gold standard for trusted companies, Marcus responded, Im not advocating for blind trust, Im advocating for a shot to earn peoples trust.

Facebook either doesnt understand the issues with trust-based monetary systems, or they are choosing to ignore them in favor of profit. In no part of the interview was there a mention of the fact that Bitcoin solved the trust problem over a decade ago.

When asked whether Facebook had considered Bitcoin being involved in the Novi wallet at all, Marcus spoke to the price fluctuation of Bitcoin denominated in U.S. dollars. This is an entirely misguided understanding of what Bitcoin is. The Bitcoin protocol itself is agnostic to U.S. dollars. One Bitcoin equals one Bitcoin. Naturally when comparing a scarce asset such as Bitcoin to an infinitely inflating asset such as fiat, you will see volatility.

Diem was originally intended to be a stable coin, one connected to a basket of altcoins through Novi. Now Diem is aiming to be strictly a dollar stable coin, Marcus told Bloomberg.

He commented that the Novi hot wallet might actually have to launch without Diem, as a last resort. But hopefully the two products can be released together, as Facebook leadership seems to believe both are required to change the world.

Marcus explained that Novi, as it currently stands, is definitely not prepared to even host digital fiat currency.

Marcus frustration with the fiat system is that it takes three days to clear ACH payments, he told Bloomberg. What he sadly fails to understand is that through fiat, there is no final settlement.

In the fiat world there is always a pervasive risk of confiscation when money is held by third parties, and most of the time, people do not even custody their own wealth. They have to ask permission to access it from a bank.

In this light it is extremely unlikely that Facebook is going to change the monetary landscape of the world in any meaningful way, or deliver any centralized monetary product that we havent seen before.

As to the companys future operations, Marcus noted to Bloomberg that as a board member of Diem he cant speak for them, as board members dont run or control the operations at Diem.

According to Business Insider, Facebooks crypto boss says the firm is looking at building NFT-related features on Diem.

"We're in a really good position to do so," David Marcus told Bloomberg on Tuesday.

The project is apparently still too early in development for Marcus to detail Facebooks NFT product plans, but he assured Bloomberg the company's developers are on the case.

"We're definitely thinking about this," he said. "It's really an area that is worth exploring, and one where we can have a positive impact for both creators and consumers."

Are NFTs even a trend anymore? Facebook has been missing opportunities to either buy Bitcoin or to launch an ICO for years, but to fail to even sell one NFT? Isnt Facebook supposed to be a technology company?

Its not complicated. NFT creation and sale is the purview of middle schoolers. Granted, there is absolutely no logical, valid use case for blockchains outside of Bitcoin, Facebook just doesnt understand, and theyve not only missed the boat, theyre not even nearing the coast of groundbreaking monetary technology.

NFTs are functionally digital arrows that point an artists signature, tied with a buyers information, toward a time-stamped jpeg. Sure, many digital creators have capitalized on the fad effectively, and made bank, but in the end, many creators sell whatever eth they brought in from these pump-and-dump schemes for Bitcoin, if they want to maintain the wealth, or they sell for fiat, if theyre entirely out of touch.

The problem with NFTs is that you cant tie digital objects to the real world without human mediation. Bitcoin doesnt even attempt to assign ownership in the real world in this way. Bitcoin is an elegant solution to this oracle problem. Bitcoin has private, segregated digital addresses that are secured through cryptography. You as a human either have access to these addresses, and therefore control the unspent Bitcoin they represent, or you dont.

Originally posted here:
Facebook Ignores Bitcoin, Works on NFTs and Stable Coins Instead - Bitcoin Magazine