I kicked off a fund for bitcoin today. It's all about creating a kind of federal reserve for bitcoin.
The concept is pretty straightforward:
I keep 50% in bitcoin and 50% in EUR on my xapo account. Whenever the difference between the two hits 10%, I’ll make a trade to balance it out. Super easy to do with xapo.
If anyone wants to hop on board, just set up a fund on an exchange or through a debit card app, whatever works for you. You can add funds or even swap some fiat (EUR, USD, etc.) into the account as you like.
The goal is to keep the funds balanced, with 50% in fiat (or gold, silver) and 50% in bitcoin.
Once again, if the imbalance exceeds 10% (or whatever limit you prefer, but max 10%), then please make a transaction to correct it.
What else is needed?
Definitely a large, engaged community. And an app with charts specifically for us:
The app should be user-friendly. It needs two fields to display the current BTC and fiat (or gold, silver) values for users' funds. It should track the bitcoin price automatically. If the funds stray more than 10% from balance, the app should alert the user to take action.
The charts should be straightforward too, showing:
- total btc held by app users (both active and inactive; inactive means the user hasn't made any changes after receiving a notification, with a timeout of say 1 hour)
- current btc value in usd.
- values of fiat (or gold, silver).
- total fiat (or gold, silver) values summed up in usd.
If there's an app out there that works this way, please share it...
If there's a similar community already up and running, I’d love to join...
The system is great but just like what you said Xapo is not up for the job. Xapo have their own design and system in which they will not be overruled by some modification not coming from within. But as a tip why dont you submit your proposal to xapo and if they will work hand -in-hand with you many will join and will have the confidence to be a part of your plan.
I choosed for my reserve xapo and EUR. But you can choose other exchange or payment system, i.e. poloniex with USDT, or KRAKEN with USD. So will be decentralised and distributed.
What is the objective of this federal reserve?
The value of your total funds will go up in a volatile environment, when there are wild swings in either direction of the price you invested in.
Otherwise, the fund will just keep selling bitcoins in an uptrend.
Objective of this idea is - to have and show a community with reserves and strategy, if the bitcoin price falls (or grows).
Yes - it is true. We (the community) can earn with this system also.
Yes, it is true also - and the fund in fiat (reserved if bitcoin price falls) grows. I think it is good also.
With such rapid growth of bitcoin as we are seeing now probably there are few people willing to freeze their euros or dollars. Yes, of course you can play it safe in case of falling of bitcoin prices, but this trend is not observed and more profitable to invest in bitcoin 100% of our Euro.
This thread not about profitability of trading. Of course I have more bitcoins (and altcoins also) as I funded for this reason.
Everybody can decided to join or not. The size of the reserve is also freely selectable.
I think this strategy long time profitable enough. At heavily grow or free fall of prices there are always reserves behind members. It can be very profitable also.
The app can show - how many active (and inactive) member and fiat behind, and can act as an information about the bitcoin market.
Why hold "50% fiat" in an era where state deficits are large and unsustainable with hyperinflation and fiat devaluation being likely prospects in the future? The united states economy being $20 trillion in debt is the reason savvy investors and countries like russia, japan and australia are shifting their holdings as far away from american fiat as possible.
The EU is very similar to the dollar in many ways & its value is likely to decrease. Many EU nations are giving illegal immigrants free welfare and healthcare which threatens to further impoverish their holdings, dragging their fiat value down with it. Especially if more nations commit to #brexit.
There are no advantages to holding euros with many disadvantages lurking on the horizon.
It might be better to hold 50% bitcoin / 50% gold or silver. With deficit and debt & concerns over currency devaluation the value of gold/silver is likely to increase, esp if currency devaluation/hyperinflation becomes real.
Or instead you could buy bitcoins with everything you've got and go to sleep for 5 years and after you woke up see you have 15 times more money than 5 years ago, federal reserve is for a centralized systems and it can not work in crypto where every thing is decentralized.
There will be no free fall for bitcoin market, there are only 21M bitcoins and anyone with more coins is going to win bigger than others in the future.
Imagine every one holding and not selling, what then? you can't go and print more money (mine more bitcoins) so eventually you will have half the value of your coins in fiat then what?
Sorry - I think you don't understand the first post. Please re-read it.
- This will be a decentralized and well distributed system.
- Nobody will print more bitcoin in future with this system - such work is a work for the well controlled miners. It will be exists through this system no more coins as before.
Bitcoin does not require federal reserve, its decentralized and anonymous nature makes it able to evolve, bitcoin is free unbinding unnecessary things make rules.
I don`t trust Xapo and many people are like me.
Anyway,it`s a good business idea and someone should create such exchange platform.
I don`t know will this be profitable with the rising btc transaction fees and confirmation time.
Could you explain the purpose of all that?
I read it a few times and still can't understand your idea. I understand what you are going to do, basically, you choose to keep balance in your funds at some ratio between fiat and crypto. Obviously, you are free to do whatever you may choose to do with your money. Sell your coins, buy yours coins, even gift them all, but what end exactly this idea should help to achieve?