Today we've published the first 20 days of the "bank protection" game (click blow to access) where we are tracking the banks so called "protection" of its customers from the "evils" of bitcoin and other virtual currencies.
[success title="Note"]Access game status here: Bank Protection Game [/success]
Last month several banks including Bank of America, Chase, and Capitol One among others declared further war against virtual currency by telling its customers they are no longer allow to buy virtual currency with their money by using a debit card issued by their bank.
Based on this silliness we put $3000 into each of these 3 banks, using their best products to earn while at the same time investing $3000 in bitcoin. Each transaction is being recorded and is available on the game page. In one year, we'll see who wins and exactly how much money banks "protected" us from losing.
Currently, we are a little over 20 days into the experiment.
Banks Continued Ridiculous Behavior
Why are we doing this? It is because of banks continued stupidity and discrimination against virtual currency based businesses and investors. They make baseless claims with little to no actual facts or data to back a single word of their bullshit.Therefore, we plan to give them a nice big steaming pile of data to look at as we record every transaction over the next year with the appropriated funds for the investments.
Last month, right around the time of these handful of announcements were made, bitcoin was around $6300 USD down over 10,000 USD from Decembers high of over $19,000. Certainly something that necessitates nerves of steel, but no different than the DOW.
About the same time the DOW dropped a record 1,600 points in a single day and the 6th largest drop of all time point wise.
Top 10 Single Point Drops (DOW)
| # | Date | Close | Net | % |
|---|---|---|---|---|
| 1 | 2018-02-05 | $24,345.75 | −1,175.21 | −4.60 |
| 2 | 2018-02-08 | $23,860.46 | −1,032.89 | −4.15 |
| 3 | 2008-09-29 | $10,365.45 | −777.68 | −6.98 |
| 4 | 2008-10-15 | $8,577.91 | −733.08 | −7.87 |
| 5 | 2001-09-17 | $8,920.70 | −684.81 | −7.13 |
| 6 | 2008-12-01 | $8,149.09 | −679.95 | −7.70 |
| 7 | 2008-10-09 | $8,579.19 | −678.91 | −7.33 |
| 8 | 2018-02-02 | $25,520.96 | −665.75 | −2.54 |
| 9 | 2011-08-08 | $10,809.85 | −634.76 | −5.55 |
| 10 | 2000-04-14 | $10,305.78 | −617.77 | −5.66 |
| 11 | 2016-06-24 | $17,400.75 | −610.32 | −3.39 |
Did banks start restricting wires or cashiers checks to stock traders or limit their debit or credit cards in some way? No.
They claim however that due to the drop in bitcoin value, they felt it their responsibility to tell their customers how they are allowed to spend their money.
Gambling? No problem.
What about casino ATM's? Are those allowed still as well? Of course they are.Just like stocks and other commodities like gold or silver, bitcoin and other crypto-currencies are a gamble. You may win, you may lose, or you may break even.
There's no difference than if you were to go to a casino and play poker or blackjack with that same money. If you know what you are doing and do it well, you can earn money. If you don't, then you can lose money.
Stocks are just as risky, if a company makes a bonehead decision, becomes outdated, or any number of other things that can happen, the value of the stock goes down and when it does, you lose money.
Customer Protection
Despite other risky investments or outright gambling activity bank customers frequently participate in, banks have decided it's only virtual currency they want to "protect" their customers from.
So how's that going anyway? Bitcoin was around $6,300 or less when the wave of announcements came out regarding this.
It's since hit over $11,000.
Had a customer invested in 1 bitcoin, they'd have been "protected" out of nearly $5,000.
Bank Protection Game
Today we announce the Bank Protection Game to track how much banks are "protecting" us. The rules are simple, we have three banks each with $1000, and $3000 invested in virtual currency.
We'll start with a buy on February 6th, right around the time these announcements came out. Bitcoin hit a low of $5947.40, a perfect time to buy.
Here's how bitcoin performed the last 20 days.
We purchased $3000 worth of bitcoin with a 0.25% fee which leaves us with 0.504221 bitcoin worth about $2992.50.
We put the Bank of America in a certificate of deposit (CD) at an APR of 0.55% on a 36 month term and opened a Capital One money market account (MMA) at one of the highest rates in the country at 0.85 APR since we are not investing $10,000 or more we are not eligible for the 1.5% APR (the highest in the country).
Since we already have two bank products we buy gold with the Chase money. This investment kind of sucks right off the bat since we'll have to wire the funds.
We put the Bank of America in a certificate of deposit (CD) at an APR of 0.55% on a 36 month term and opened a Capital One money market account (MMA) at one of the highest rates in the country at 0.85 APR since we are not investing $10,000 or more we are not eligible for the 1.5% APR (the highest in the country).
Since we already have two bank products we buy gold with the Chase money. This investment kind of sucks right off the bat since we'll have to wire the funds.
| Method | Price | Turn |
|---|---|---|
| Bank Wire | $905.42 | 1 Day |
| Check | $905.42 | 6 Days |
| Bitcoin | $914.88 | 1 Day |
| Credit Card | $943.12 | 1 Day |
| Paypal | $943.12 | 1 Day |
Since the banks have banned our ability to purchase bitcoin, we can't use bitcoin to buy this gold and our money is in the Chase account. We don't want to wait 6 days to be spotted the price and using Paypal or a Credit Card will cost more than a bank wire, so the bank wire makes the most sense.
The bank wire will cost us $30 for a domestic wire via Chase whereas the price difference quoted is $37.7. We save $7.70 by using a bank wire. For this game we certainly will give everything a fair chance and use the best possible methods, interest rates, and digital asset investments that we can.
All of our transactions for February 6th, 2018 went as follows:
We must admit, day 1 went to Banks.
| Account | Balance | Earnings |
|---|---|---|
| Chase | $63.84 | ($30) |
| Gold | $854.06 | ($52.10) |
| Bank of America | $1000 | $0 |
| Capital One | $1000 | $0 |
| Bitcoin | $2992.50 | ($7.50) |
As you can see, Bank of America and Capital One led the way on day one with Gold coming in a distant last place. That was 20 days ago of course. Since then we conducted a few bitcoin trades. Gold needs to earn about 15% before we can do anything with it to cover the fees, thus no movement. Neither account, CD or MMA, has reached the 30 day mark to earn. Bitcoin however has gone up and down enough to make it worth buying and selling a couple times.
In 20 days with only $3000.00 we've doubled our money with earnings of approximately $3100.31 USD with our bitcoin investment.
Thus far banks would have "protected" us right out of over $3000.
We'll be updating the game page several times a month as we trade and we'll keep this going for one year or longer.
On February 6th, 2019 we'll total everything up and see what great protection these banks would have provided us.
Fortunately these three banks aren't the only three banks on earth, other banks allow bitcoin purchases.
At the end of the day, none of these bank actions have anything to do with protecting it's customers, it has everything to do with .... self-preservation.
[accordion] [item title="Author and Credits"] Article by dinbits
Image Credits: Banner Image by dinbits.com staff
Image Credits: Banner Image by dinbits.com staff
[/item] [item title="Disclaimer"]The opinions expressed by authors of articles linked, referenced, or published on dinbits.com do not necessarily express, nor are endorsed by, the opinions the of dinbits.com or its affiliates. Please review the Terms of Use for more information.[/item] [/accordion]
Post a Comment