So while most financial influencers were running around promoting Celcius (bankrupt), Blockfi (going bankrupt most likely), Voyager (bankrupt) and now FTX (bankrupt) - I've been pretty consistent in my recommendation of the Gemini exchange.
But thanks in part to Gemini using Genesis Captial for their earn program (now branded as "grow"), withdrawals from the earn program are now potentially suspended (the broader exchange is still processing withdrawals like normal). Instead of getting your funds back in 5 business days, it could be up to 30 days if you even get anything back worst case scenario.
This is because Genesis had 175 million locked away with FTX. The FTX collapse is clearly the Lehman Brothers moment for this industry and shows why banks are so strictly regulated, human behavior and dangerous psychopaths at the helm of large, important companies misbehaving.
I'm out 4,000 USD if things blow up
So I'm potentially out 4,000 USD that I just put in to the earn program 2 weeks ago. Really bad timing to say the least. I'm not a big fan of earning interest on BTC as it has the potential to become extremely valuable someday but I did put a chunk of BTC into the earn program because I figure why not.
Earn for 3-4 months then withdraw to cold storage. What could go wrong? Boy do I regret that decision. Never again will I lend out Bitcoin. I will only ever consider using it as collateral for a loan at best.
I also got lured in because of the high yield on the GUSD stable coin so I did have a portion of the 4k in that. Overall, it's just awful what has happened. But one silver lining is I did do proper risk management.
Only risk what you're willing to lose
If you're not using a software wallet on your phone or a hardware wallet then why are you even buying BTC in the first place? My personal risk management approach is to risk 20% max of my holdings in any interest earning program.
20% is what I'm willing to lose worst case scenario. That's easy to say obviously but going through it still is stressful for lack of a better word. But at least I did not put $10,000 or more into GUSD like I was thinking of doing. The reason I didn't was that it goes against my risk management protocol.
Will I get my funds back? Who knows. Looks unlikely
Genesis Global appears to be insolvent. Would have been nice to have see a warning about his as I put money into the Earn program literally a week ago. Literally just pissed away 4K, about the same as lighting it on fire.
I still like Gemini, I still like their credit card. The credit card combined with Brave rewards nets me about $20 a month in Bitcoin. But from now on, I'll never lend out anything again.
This is a good reminder of that old adage in the Bitcoin community:
Not your keys, not your coins.