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Dan Held Profile
Dan Held

@danheld

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Follow me to learn about #Bitcoin Currently: Growth @Krakenfx . Formerly: Growth @Uber @Blockchain . Opinions my own.

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@danheld
Dan Held
13 hours ago
1/ [January #Bitcoin Yield update] Over the last 2 years, I’ve earned ~2BTC with various yield generating services to earn a historical average of 1-5% on ~25 BTC. ⚠️ The last few months have been wild with hacks, blowups, and SEC issues! Here's my journey and how to guide👇
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@danheld
Dan Held
13 hours ago
@AtomicFinance 24/ Hope you enjoyed this thread! If you want to learn more about Bitcoin? Subscribe to my newsletter where I write about various Bitcoin topics in depth👇
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@danheld
Dan Held
13 hours ago
@AtomicFinance 22/ This is done in a self-custodial manner, so you maintain control over your coins more so than on a centralized options exchange like LedgerX. Basically, you’re making a bet on the price of Bitcoin being above or below a certain price (strike) on a certain date (expiry).
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@danheld
Dan Held
13 hours ago
21/ I was given a sneak-peek into @AtomicFinance beta. What they’re looking to do is create DeFi options trading (specifically covered calls) on top of Bitcoin using DLCs. Super cool.
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@danheld
Dan Held
13 hours ago
20/ The way it works is that two parties send funds to a multi-sig address. In order to settle the bet, an oracle (a party that pipes in outside data like the price of Bitcoin) signs the contract with a signature that corresponds to the hash of the winning outcome.
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@danheld
Dan Held
13 hours ago
19/ DLCs (Discrete Log Contracts) Two parties can bet on a certain outcome based on x/y/z condition being met. For example, what the price of Bitcoin might be tomorrow.
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@danheld
Dan Held
13 hours ago
18/ Lightning Pool Most simplistically, it is an order book for lightning liquidity (or a channel marketplace) done in a non-custodial manner (note: there is a coordinating server).
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@danheld
Dan Held
13 hours ago
17/ Coinjoins allow for Bitcoiners to obfuscate their coin holdings through mixing them with other Bitcoiners. In order to create a market of individuals willing to mix, there are makers and takers. Makers post availability to mix, takers pay the makers for that convenience.
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@danheld
Dan Held
13 hours ago
16/ You can also earn a yield through trust minimized services like CoinJoins, providing lightning channel liquidity, and DLCs. CoinJoins: Yield: ~0.5% Get started: Lightning Pool Yield: variable/low Get started:
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@danheld
Dan Held
13 hours ago
15/ With covered calls you only have exchange custody risk, which is some of the lowest risk you can have. One advantage of covered calls is that if you sell a 1yr+ duration call AND it gets assigned (price > strike) then your premium is taxed as long term cap gains (in the US)
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@danheld
Dan Held
13 hours ago
14/ Historically I sold 2-3x current price strikes 2-3 months out and earning an average of 4-6% The quotes above are quite a bit closer to the money. Because of how intense Bitcoin's bull run has been, I'm not selling any new calls for the time being.
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@danheld
Dan Held
13 hours ago
13/ So how does that look with some real numbers? (Pulled 1/26 split spread) 3/25 $70k strike = $264 premium ( 4.2% annualized) 3/25 $100k strike = $94 premium (1.2% annualized) Annualized is a bit of misnomer -you don’t know what the yield will be the next time you sell calls
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@danheld
Dan Held
13 hours ago
12/ What are “covered calls?” It’s an option trade which has the owner of the underlying asset (“covered”) sell their upside above a certain price (“strike”) in exchange for a payment (“premium”) The more likely that event occurring, the higher the premium (very simplified)
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