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General Discussion / Re: BitUSD currently paying more than 1.5% APR
« on: October 01, 2014, 03:03:25 am »
I would be very skeptical of anyone offering me 5% to hold USD - what's the catch?
And that would be my cue to explain DACs. .... after that it's all numbers; 5% is greater than 1.5%, which is greater than 0.25%, no matter how you slice it
Your explanation of DAC's would be met with skepticism by the vast majority of investors, at least for next few years.
5% yields are expected on relatively high-risk equities/bonds... but not on cash.
I'm not saying the yield should not be 5% or greater - but I am saying that right out of the gate a lower yield is going to present better.
Now, if in a couple years bitAssets gain traction/acceptance and the yield climbs with transaction volume the result would be a spectacular flood of capital seeking low risk and protection from inflation.
Imagine the hordes of boomers that are retiring and need live off of their savings: bitUSD at 5% would be a Godsend!