Don’t Abandon Pragmatism in the Pursuit of Profits.
One of the cautions to “Going Full Crypto” is still being able to pay day to day bills. You don’t want to be caught in a situation where you cannot get your money out of crypto, and into the government currency you need to pay your bills. The media will tell you that cryptocurrencies are highly illiquid, extremely volatile, and a totally risky thing to engage in. For the majority of cryptocurrencies, I’d say this is true, but not for Bitcoin. In fact, I’d firmly push back against the notion that Bitcoin is risky, illiquid, and volatile. I implore you to read on, as I temper this position with context later in the letter. For us, Bitcoin is the perfect base asset on which to run our family’s personal finances. Let’s Dig In.
Find Your Crypto-Bank
When Mrugakshee and I decided to move our finances in the world of cryptocurrency we had a couple of requirements.
Be able to easily convert cryptocurrency into spendable cash ($<1000)
Be able to convert cryptocurrency into emergency expenditures ($1000+)
Be able to leverage passive income opportunities to hedge protect against market volatility
Be able to secure a line of credit instantly, using our Bitcoin as leverage
Be able to convert more FIAT into Crypto on a moments notice
There are institutions that are beginning to pop up that can satisfy each of these requirements. I like to think of them as Crypto-Banks, or Neo-Banks. These are institutions that have been built from the ground up to interface with the latest monetary technology the planet has to offer.
Introducing Crypto.com
The institution that we ended up selecting, is Crypto.com. They are able to satisfy each of the aforementioned requirements that we set for ourselves. Originally, we thought we were going to have to shop around for a variety of services. We were delighted when we found we could have all of these services in one place.
Everything in the Crypto.com ecosystem is ultimately tied together through their VISA Debit card and their signature coin, CRO. The VISA Debit card allows us to convert crypto into spendable cash (CAD), at the checkout. I’ll just list the various Crypto.com services we’re using.
VISA Debit Card for Spending (+1 - 8% Cashback in Crypto)
12% APY Interest Rate on CAD Savings Account
6.5% APY Interest Rate on BTC Savings Account
1% APY Instant Loans with Bitcoin as Collateral
e-Transfer to our Canadian Bank Account for Monthly Rent payment
Manage our CashFlow
Mrugakshee and I run our own business. A portion of our income is in Canadian Dollars, some in American Dollars, and some in Bitcoin. The best case scenario is if we have enough Canadian dollars coming into our business to pay our salaries, to cover our Canadian Dollar expenses. This way, we can keep to our retirement savings plan of “Never Selling Bitcoin”. In the unfortunate event that we can foresee a shortage in CAD for our monthly expenses, we have set up Crypto.com to be able to deposit into our Canadian Bank account within 1-2 business days.
< The conversion from a liquid cryptocurrency into CAD is instant. Banks and other 3rd parties take time to process these transactions, hence the 1-2 business day >
Backup Services
Just in case Crypto.com is unavailable for any reason, we have other means of making sure we are not unable to make good on our bills. Kraken, and ShakePay are two other Canadian service providers that make it extremely simply for us to convert crypto into cash and vice-versa.
The Story the Media Tells You
The media will tell you that Bitcoin is illiquid (not flexible). This is false for all practical day-to-day purposes. Unless I am trying to convert hundreds of millions of dollars worth of Bitcoin into Dollars (which I am not), I am going to have 0 (ZERO) problems converting a months worth of expenses from Bitcoin into Dollars. In fact, I can convert, and deposit into my Canadian bank account through e-transfer in under 10 minutes, any day of the week.
Crypto is Risky; Bitcoin is Not (Conditionally)
I agree with the narrative that Cryptocurrency is risky. I push back respectfully that Bitcoin is risky. The caveat is that you must be a person that is well versed in Bitcoin. That is, you need to know how to protect your funds, and ensure that you do not face a total loss of funds due to mismanagement of your keys. It is actually quite simple to adequately protect your funds, its just a matter of education. If you can do this, then you may safely reap the benefits that Bitcoin has to offer.
I.E. Self-Sovereign, Non-Confiscatable, Highly Liquid, Inflation-Proof;
This is the main thing we help our clients with. Education, and hand-holding through the process of familiarization oneself with Bitcoin as a technology. Again, the outcome that we help our clients avoid, is the total loss of funds.
Bitcoin is Volatile; But in the Right Way
To combat this narrative, we have to talk about time horizon. We have to contextualize Bitcoin in the span of years, and decades, instead of months, or days. If we’re talking about days, or months, then I really have no choice but to concede that Bitcoin is volatile. Bitcoin can fluctuate on a month to month basis by as much as 40%. However, on a year over year basis, it has consistently risen by massive factors. In the last decade, it is literally the best performing asset of all time. So in reality, Bitcoin is volatile, but in the best way possible (up). Because Mrugakshee and I have planned our finances around Bitcoin, we expect our retirement savings to aggressively rise upwards. We’re prepared to weather the storms that short-term negative volatility brings our way.
I’m a Pragmatist
Ultimately, I am a pragmatist. I would not have adopted a “Full Crypto” strategy unless I was confident that we could pay our bills on a day to day, and month to month basis. I would not have adopted a Full Crypto strategy unless there was at least a 5x upside to me shifting away from the norm. The reality of the situation is that I am saving much more time with my finances (Crypto is 24/7/365). I am saving more money on fees (no monthly / yearly / overdraft) with my neo-bank account. I have way more access to financial opportunity (1 click loans at 1% APY, no credit checks). This strategy that we have adopted still needs work, but it is the beginning of the model that will be used by millions of other early adopters of Bitcoin.
< No credit checks doesn’t mean free money. All loans are collateralized. >
All The Best,
Keegan Francis
< Work with me 1 on 1 to confidently invest in Bitcoin. Get in touch here. >