Investment
Are crypto banks saving rates safe?
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There is a lot of interest in crypto banks like Nexo and Blockfi. Savings accounts on the high street, where interest rates are sub-1%, can offer an annual percentage yield of up to 12%. There are some important things you need to know before you start saving in crypto. You must understand what interest is being offered by these banks.
Many crypto banks do not offer customers the option to save in stablecoins, such as tether or USDC, which they trade on a one for another basis with the US dollar, aside from Nexo, which offers up to 12% interest on pounds, US dollars, and euros.
Stablecoins are where they charge high the most, such as Tether and USDC, where BlockFi pays 8.6% on USDC, 9.3% on Tether, and 5% on bitcoin and Nexo pays up to 12% on USDC and Tether but 8% on bitcoin. This means you could convert $1000 (£720) into USDC1000, hold it in a BlockFi account for one year, then withdraw $1,086.
You need to transfer your money into this form first since major crypto banks deal only in cryptocurrencies. You can do this through an exchange like Binance or Coinbase or through crypto banks that offer limited versions of this service. For example, anyone can send dollars to BlockFi, which will convert them into stablecoins known as Gemini USD, which has an 8.6% rate of interest.
A majority of crypto banks offer the option of converting your Gemini to bitcoins on their platform. Although there are no fees associated with this service, the rates aren’t the most competitive. According to BlockFi, its price may be 1% above the regular price when purchasing crypto. Investing in cryptocurrencies lowers interest rates as you hold them longer. For example, BlockFi only charges 5% on bitcoin deposits of up to 0.5 bitcoins. Once you deposit more, the rate drops to 2%, and finally to 0.5%.
Furthermore, users can boost their chances of enjoying top quality trades by embracing the right trading tools. Bit Index AI has enjoyed much popularity as a tool that can help you trade like a pro to achieve quality trades.
In addition to offering interest payments on their cryptocurrency, certain crypto banks offer the best rates. Nexo, for instance, offers 12% APR on USDC and Tether, but only for people who receive payments in Nexo tokens. Unlike stablecoins, Nexo tokens fluctuate in value. The interest rate for USDC and Tether payments is 10%. There is also no guarantee of interest rates. So, when you quote an annual rate, keep in mind that it could fluctuate anytime
Business Model
However, the rates are extremely high. So, what are the secrets of crypto banks? At a crypto bank, capital is lent out at a higher rate than the interest rate it pays its depositors. There are two ways that crypto banks protect themselves.
First, they lend out less than the amount they hold in deposits. Then, by requiring that borrowers place collateral on their loans. Calculating the required collateral needed for a loan involves calculating loan-to-value (LTV). So, when BlockFi reaches an 80% LTV, it has the right to liquidate collateral. The current rate for borrowing $5000 from BlockFi is BTC0.25at the value of $9448 at the time of writing.
If the value of bitcoin dropped to $6250, the bank would sell some of your collateral to raise the LTV.
Bottom Line
This type of business model can generate significant revenues in good times. Although regular banks could give high rates on savings, they tend to use some of those savings to make their rates more competitive.
It is not clear the direction crypto banks would take if borrowing dried up or there was either a sudden or prolonged crash in the market. A scenario such as these, however unlikely, would mean that your savings in crypto are not insured, unlike those in a high street bank.
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The Canadian Press
Gold breaking above 2000 is likely a 2023 event: CEO
VIDEO SIGN OUT
The precious metals sector could stand to benefit from renewed exploration, particularly at a time when investors are undervaluing several companies within the space, one financial expert says.
In a Thursday interview with BNN Bloomberg’s Amber Kanwar, David McAlvany, chief executive officer of McAlvany Financial Companies, said precious metals companies that specialize in mining commodities such as gold and silver are well-positioned to capture new growth through exploration, and are showing sustainable cost production.
He recommended Orla Mining Ltd. (ORLA), I-80 Gold Corp. (IAU) and MAG Silver Corp. (MAG) as his top picks in the precious metals sector.
McAlvany, his family and his firm own shares of all three companies mentioned above, however his investment banking clients do not.
Check out the full video at the top of the article to learn more.
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MONTREAL, Québec — BRAVO READY, creator of BR1: INFINITE, the world’s first pay to spawn, kill to earn shooting game, today announced a new strategic investment from Magic Eden, adding to its expanding list of investors, which includes Krafton (owners of PUBG), 6th Man Ventures, and Solana Ventures. The funding provided by this investment will be directed towards the further development and mass adoption of BR1: INFINITE.
“With the support of Magic Eden, BRAVO READY is now better positioned to provide liquidity to gamers,” said CEO and Co-Founder, Evan Ryer. “Delivering innovative and exciting gameplay experiences that leverage a risk-based model is what keeps players coming back – we are excited to keep onboarding strategic partners like Magic Eden.”
“We are excited to support BRAVO READY and their vision to bring intense competitive gameplay to Web3.” said Chris Akhavan, Chief Gaming Officer, Magic Eden. “We believe the combination of Web3 technology and skill-based player economics will create thrilling experiences for gamers.”
About BRAVO READY
BRAVO READY is a Montreal-based game publisher. In addition to producing AAA and WebGL titles like BR1:INFINITE & Mini Arena, BRAVO READY offers a range of products & services to help align games and game companies for success.
About Magic Eden
Magic Eden is the leading cross-chain NFT platform driving the next billion users to web3. Led by former crypto, tech, and hospitality leaders, Magic Eden is building a user-friendly platform powered by market-leading minting and trading solutions. Magic Eden brings dynamic cultural moments onto the blockchain, empowering users across thousands of digital communities to create, discover and collect unique NFTs. For more information, please visit www.magiceden.io
View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005710/en/
Contacts
Corey Herscu for BRAVO READY
corey@herscu.ca
+14163003030
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| For the years ended December 31 (Thousands, US dollars, except per share amounts) |
||||||||
| 2022 | 2021 | |||||||
| Investment income | ||||||||
| Dividends | $ | 1,120,641 | $ | 117,629 | ||||
| Other investment income | 6,694 | 5,361 | ||||||
| 1,127,335 | 122,990 | |||||||
| Expenses | ||||||||
| Operating expenses | (2,359 | ) | (3,249 | ) | ||||
| Financing costs | (9,789 | ) | (8,896 | ) | ||||
| Retractable preferred share dividends | (39,753 | ) | (33,628 | ) | ||||
| (51,901 | ) | (45,773 | ) | |||||
| Other items | ||||||||
| Investment valuation gains (losses) | 10,653 | (5,739 | ) | |||||
| Amortization of deferred financing costs | (3,363 | ) | (4,070 | ) | ||||
| Current tax (expense) recovery | (19,990 | ) | 7,816 | |||||
| Deferred tax recovery (expense) | 21,439 | (15,024 | ) | |||||
| Foreign currency gains (losses) | 37,272 | (28,706 | ) | |||||
| Net income | $ | 1,121,445 | $ | 31,494 | ||||
| For the years ended December 31 (Thousands, except per unit amounts) |
2022 | 2021 | |||||||||||||
| Total | Per Unit | Total | Per Unit | ||||||||||||
| Net book value, beginning of period1 | $ | 7,482,738 | $ | 92.47 | $ | 4,777,152 | $ | 54.25 | |||||||
| Net income2 | 1,114,558 | 24,606 | |||||||||||||
| Other comprehensive (loss) income2 | (3,910,893 | ) | 2,508,092 | ||||||||||||
| Adjustment for impact of warrant3 | (25,355 | ) | 2,842 | ||||||||||||
| Re-organization | — | 663,678 | |||||||||||||
| Equity LP repurchases | (4,224 | ) | (493,632 | ) | |||||||||||
| Net book value, end of period1,4 | $ | 4,656,824 | $ | 57.60 | $ | 7,482,738 | $ | 92.47 | |||||||
- Calculated on a fully diluted basis. Net book value is a non-IFRS measure used by management to measure the value of an Equity LP unit on a fully diluted basis. It is equal to total equity less General Partner equity and Preferred Limited Partners’ equity, plus the value of consideration to be received on exercising of warrants, which as at December 31, 2022 was $352 million (December 31, 2021 – $378 million). Opening net book values per unit have been re-casted to conform with the current year per unit presentation.
- Attributable to Equity Limited Partners.
- The basic weighted average number of Equity Limited Partnership (“Equity LP”) units outstanding during the year ended December 31, 2022 was 66,169,783 (December 31, 2021 – 72,953,504). The diluted weighted average number of Equity Limited Partnership (“Equity LP”) units available and outstanding during the year ended December 31, 2022 was 80,877,206 (December 31, 2021 – 87,662,153); this includes the 14,707,424 Equity LP units (December 31, 2021 – 14,708,648) issued through the exercise of all outstanding warrants.
- At the end of the year, the diluted Equity LP units outstanding were 80,844,367 (December 31, 2021 – 82,171,127).
Financial Profile
The Partnership’s principal investments are an ownership interest in approximately 132 million Class A Limited Voting Shares of the Corporation and approximately 33 million Class A Voting Shares of the Manager. These holdings represent an 8% interest as at December 31, 2022 in both entities. In addition, the Partnership owns a diversified investment portfolio of marketable securities.
The information in the following table has been extracted from the Partnership’s Consolidated Statements of Financial Position:
Consolidated Statements of Financial Position
| As at (Thousands, US dollars) |
December 31, 2022 |
December 31, 2021 |
||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 185,722 | $ | 80,704 | ||||
| Accounts receivable and other assets | 31,270 | 65,418 | ||||||
| Deferred tax asset | 1,604 | — | ||||||
| Investment in Brookfield Corporation1 | 4,149,188 | 7,869,681 | ||||||
| Investment in Brookfield Asset Management Ltd.2 | 934,183 | — | ||||||
| Other investments carried at fair value | 328,264 | 344,983 | ||||||
| $ | 5,630,231 | $ | 8,360,786 | |||||
| Liabilities and equity | ||||||||
| Accounts payable and other liabilities | $ | 36,860 | $ | 7,693 | ||||
| Corporate borrowings | 220,711 | 236,513 | ||||||
| Preferred shares3 | 905,132 | 835,019 | ||||||
| Deferred tax liability | — | 23,431 | ||||||
| 1,162,703 | 1,102,656 | |||||||
| Equity | ||||||||
| Equity Limited Partners | 4,304,516 | 7,105,075 | ||||||
| General Partner | 1 | 1 | ||||||
| Preferred Limited Partners | 153,049 | 153,054 | ||||||
| Non-controlling interests | 9,962 | — | ||||||
| 4,467,528 | 7,258,130 | |||||||
| $ | 5,630,231 | $ | 8,360,786 |
- The investment in Brookfield Corporation (formerly known as Brookfield Asset Management Inc.) consists of 132 million Corporation shares with a quoted market value of $31.46 per share as at December 31, 2022.
- The investment in Brookfield Asset Management Ltd. consists of 33 million Manager shares with a quoted market value of $28.67 per share as at December 31, 2022.
- Represents $680 million of retractable preferred shares less $13 million of unamortized issue costs as at December 31, 2022 (December 31, 2021 – $611 million less $13 million) and $152 million of three series of preferred shares (December 31, 2021 – $152 million) and $84 million of three series of preferred shares (December 31, 2021 – $84 million) of a subsidiary of the Partnership, issued in December 2021.
For further information, contact Investor Relations at ir@pvii.ca or 416-956-5141.
Note: This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of applicable Canadian securities regulations. The words “potential” and “estimated” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters, identify forward-looking information. Forward-looking information in this news release includes statements with regard to the Partnership’s potential future income taxes.
Although the Partnership believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond its control, which may cause the actual results, performance or achievements of the Partnership to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
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