Bitcoin Volatility Is Currently Quiet
The price action on Bitcoin the past couple weeks has been a bit subdued. I don't say this from just looking at the chart though. This feedback comes from looking at the bitcoin-stable coin liquidity pools.
The APR on those pools constantly moves up and down with the trading volume and volatility.
APRs are as low as I have seen them all year. Personally, I'm in a few pools. Based on the ranges I've created my pool average 15% or so APR. They swing as high as 35% in highly volatile times and as low as 4% in non-volatile times.
Past couple weeks APRs have been dancing around 4 to 5%.
Things are quiet, for now. Like anything else speculative - times of heavy action and times of rest exist.
When will volatility kick up?
One never knows, but it will happen and when it does the price action of the last couple weeks that we can see in the chart below will look a bit different.
All it takes is one 5K daily candle to flare up volatility, and those are prone to happen.
Posted Using INLEO
With APRs stuck near 4 to 5 percent, the pools looks sleepy and fee income barely offsets IL on quiet pairs. From an accountant brain, that screams capital preservation mode and tighter risk, my coffee has more buzz than the market right now.. Do you recalibrate your ranges or just sit tight till voLatility wakes up?
I have several tranches working that cover a wide range, but the range of each is roughly the same as I have found over the course of 6 months they average 15+%
Keeping each tranche in roughly the same band seems to smooth the ride and and makes tracking easy, your averaging 15% over 6 months backs that up. I like a core wide range with a smaller tight tranche for the next vol pop, so you dont miss spikes while the base keeps earning. Do you auto compound or just roll profits on a simple schedule? :)
The money I have pooled I borrowed at 7% so no auto compounded for me. I stack the BTC portion earned and then use the USDT to make the payment on the loan. Stacking small amounts of BTC for free essentially.
Smart setup. As long as net APR from fees plus re;wards stays above the 7 inTereSt, the USDT flow covers the note and you grow the BTC stack for free :). Just watch volatility and LTV so a slow week does not force you to unwind, keep a small buffer ; just in case. You keeping the core range wide right now to reduce churn?