This account pays 9% interest... but there's a catch.

[k-vette]

Now that I have your attention!  I did a search and couldn't find this company mentioned, so here we go.

Voyager Digital has an account that will pay you 9% interest on dollars you put in...sort of. That's amazing compared to most banks!  But as I said there's a catch.  Voyager Digital only handles cryptocurrency.  Yes, I hold some crypto, mostly in BTC, but I'll try to avoid that debate and focus on the interest here.

Blockfi comparison
I was looking for the best place to hold Bitcoin, and learned about blockfi. They pay 6.5% interest on any bitcoin you hold (which pays in more bitcoin).  That seems like a win-win if you're into that.  The downsides were that transfers in and out can often take days, and there's a limited number of transfers you can make per month without paying a fee.  There's also a cap on the 6.5%, which drops down considerably past a certain value.

Then I found Voyager.  They also offer a percentage, which is 6.25% for bitcoin.  No fees (other than standard Bitcoin network fees) and NO CAP!  Awesome.  When checking other percentages they pay, I discovered they pay 9% on USDC! 

What is USDC?
USDC is a "stable coin" which tracks the US dollar.  Yes, it's still crypto, but 1 USDC always equals 1 USD.  (Unless crypto dies of course)  If you purchase USDC and hold it in a Voyager account, they will pay a nice steady 9% interest (paid monthly).  At any time you can easily exchange back to dollars and withdraw funds.  The monthly requirement is to hold 100USDC, or $100.

Personally I'm willing to take the risk that the BTC I have will increase in value more than the difference between 6.25% and 9%, but if you want a steady, stable option, this seems like a great rate.  MeetKevin on youtube has a couple of good interviews with the CEO of Voyager that explains how this works and how they can pay such a high interest rate.


It's basically an app like Robinhood, but solely for crypto with the added benefit of interest yields.  From what I can see (their company is publicly traded in Canada) it's growing rapidly.
Referral link if you want:  https://voyager.onelink.me/WNly/referral?af_sub5=KYL415
Normal link if you don't:  https://www.investvoyager.com/


Enough to tempt you to buy a cryptocurrency?

[MustacheAndaHalf]

Voyager Digital has an account that will pay you 9% interest on dollars you put in...sort of. That's amazing compared to most banks!  But as I said there's a catch.

You can't really compare it to licensed banks insured by the FDIC.  When a bank is robbed or collapses, FDIC insurance means you get your money back.  When a crypto website goes under, you can expect to lose all of your crypto because it's not a bank.

I assume you just found this company recently, because if you'd invested in their stock a year ago you wouldn't care about earning 6-9%.  Their one year returns are staggering, and they earned +10% yesterday.
https://www.morningstar.com/stocks/xcnq/vygr/trailing-returns

[celerystalks]

Looks like a ponzi scheme.

[seattlecyclone]

I'm curious how they expect to make money paying interest, at such high rates, denominated in a currency with such severe supply constraints. If everyone stored their Bitcoin in such an account, it would be impossible to actually make good on their promise. New coins aren't mined fast enough. They could be attempting to recreate fractional reserve banking, but without an FDIC-equivalent backstopping their deposits a "bank run" could be very bad for the depositors who fail to get out in time.

[maizefolk]

I suspect it's the same model we discussed last month with BlockFI, where it sounds like they are indeed making loans to folks doing things like crypto price arbitrage for which prime brokers aren't willing to lend in USD. 

https://forum.mrmoneymustache.com/investor-alley/crypto-bank-high-interest-rate/

[ChpBstrd]

So this is what happens when all the dumbest investors on the planet crowd into an unregulated market completely absent of law enforcement?

Perhaps I should start a crypto-ponzi. That’s where the smart money is.

[SwordGuy]

So this is what happens when all the dumbest investors on the planet crowd into an unregulated market completely absent of law enforcement?

Perhaps I should start a crypto-ponzi. That’s where the smart money is.

That would be my guess.

[soccerluvof4]

I owned VYGVF around 11 and sold way to soon just under 20$ its ran way to much imo but maybe just sour grapes I didn't hold on longer you can decide. What @MustacheAndaHalf said was the right play would be my .02c otherwise I would stay completely away getting involved as your thinking about it.  If you want to research for the next runner I listed some ALT's I am watching right now any why on the post below about percentage of crypto one owns.

[maizefolk]

They could be attempting to recreate fractional reserve banking, but without an FDIC-equivalent backstopping their deposits a "bank run" could be very bad for the depositors who fail to get out in time.

I think this is exactly what is happening (reinventing fractional reserve banking) and I agree it comes with the attendant risk of bank runs.*

Has much less to do with crypto as we normally think of it (bitcoin and other cyptocurrencies with fixed issuance and floating exchange rates), and more using things which are technically crypocurrency (but are pegged to the dollar and whose issuance is only capped by the total number of dollars in circulation) to do an end-run around normal banking regulations that would apply if the bank-analog were lending out USD instead of USDC or similar dollar-pegged unlimited-issue cryptocurrencies.

That's not necessarily a bad thing in my view. Uber and Lyft did an end run around existing taxi regulations and people valued the new services and options enough to change the regulations to let them continue to provide those services and options when state governments tried to shut them down. But for every Lyft/Uber story there are plenty of cases where after doing an end run around regulations, the company and their customers got a hard reminder that the regulations where there for a reason. LendingClub springs to mind. So long term, either things blow up in people's faces (reaffirming the need for the regulations), or they don't and many more people use their USD to create USDC to get higher interest rates and the growing supply of USDC drives down interest rates until they're not much higher than USD interest rates. Or the second one happens first and then later the first one.

*I highly recommend watching "Years and Years" just for the bank run scene. It very effectively captures how rapidly the panic can kick in and spread on an otherwise normal day.