Bitcoin for CC Churn?
Sep 11, 2017, 6:53 pm
#17
Join Date: Jan 2015
Programs: Marriott Titanium and LTP, Hilton Gold, United Silver
Posts: 786
As long the price of bitcoin eventually goes above 4% over the purchase price, there will be no loss. Of course, it could take days, weeks, months, or years for the price of a bitcoin to go above the purchase price by 4%. During that time, the money is completely illiquid except at a loss.
Sep 14, 2017, 12:56 pm
#19
Join Date: Jan 2013
Location: USA
Posts: 78
I cycle $2K per week using digital currencies.
I buy bitcoin/ethereum on coinbase. Coinbase charges 3.99% to use credit card (most exchanges don't allow credit card and those few do charge even more) and only allows you to place market order (please look up difference between market vs limit order if you don't know). I then transfer what I bought to GDAX, coinbase's sister site where you can set limit order and set a limit sell order at 4% above what I bought it for so I can forget about it and don't have to keep watching the price. Once sold, I withdrawal the cash back to my bank account.
To prevent fraud, coinbase has a credit card spending limit of $500/week for new users, they will move it up to $2K/week once you use them for a couple months. Like other people already mentioned, digital currencies are highly volatile. They can move 20% up or down a day. There are a lot of risks so I wouldn't recommend keeping a large position longer than you have to.
I buy bitcoin/ethereum on coinbase. Coinbase charges 3.99% to use credit card (most exchanges don't allow credit card and those few do charge even more) and only allows you to place market order (please look up difference between market vs limit order if you don't know). I then transfer what I bought to GDAX, coinbase's sister site where you can set limit order and set a limit sell order at 4% above what I bought it for so I can forget about it and don't have to keep watching the price. Once sold, I withdrawal the cash back to my bank account.
To prevent fraud, coinbase has a credit card spending limit of $500/week for new users, they will move it up to $2K/week once you use them for a couple months. Like other people already mentioned, digital currencies are highly volatile. They can move 20% up or down a day. There are a lot of risks so I wouldn't recommend keeping a large position longer than you have to.
Sep 14, 2017, 1:58 pm
#21
Join Date: Jan 2013
Location: USA
Posts: 78
Sep 14, 2017, 2:39 pm
#22
Join Date: Mar 2016
Posts: 67
You edited your response, which shows you have more sense than sense of humor.
As to your original response, I'm not bitter. My cryptocurrency holdings equal your ability to take a joke. But someone lost money, as you recognize from the sympathetic edit to your bitter initial response--though it still seems mean to ask hw711 how much he lost, since his prior post and bitcoin price history make plain that s/he likely is down $400-800.
Anyhow, I appreciated hw711's post. It got the wheels turning in my head as to whether GDAX issues a 1099, whether a limit order to sell 4% above purchase actually creates a net zero purchase, whether price trends would support setting the limit orders higher than breakeven, whether OP could eliminate some of the volatility risk by also setting limit orders 8% below purchase to cap downside risk.
I'm not adopting the "strategy" but am learning from it. Thanks, hw711.
Anyhow, I appreciated hw711's post. It got the wheels turning in my head as to whether GDAX issues a 1099, whether a limit order to sell 4% above purchase actually creates a net zero purchase, whether price trends would support setting the limit orders higher than breakeven, whether OP could eliminate some of the volatility risk by also setting limit orders 8% below purchase to cap downside risk.
I'm not adopting the "strategy" but am learning from it. Thanks, hw711.
Sep 14, 2017, 5:09 pm
#23
Join Date: Oct 2009
Posts: 152
This is a manufactured spending with 4% cost. Put a 4% gain limit order does not decrease your 4% cost. Gain from trading the bitcoin is not relevant to your manufactured spending cost.
4% cost is a very expensive method that I won't touch.
4% cost is a very expensive method that I won't touch.
Sep 24, 2017, 4:22 pm
#25
Join Date: Nov 2014
Posts: 37
Agreed although the price has recovered nicely since 9/15/17. So many other avenues you can take for MS. The transaction fee and Coinbase's 1.49% fee is not worth it even if you plan on buying the dip and holding Bitcoin long term. Just set up an account on Gemini and link your bank account to it. The fee there is 0.25% (6X less than Coinbase) with a $500 max per day ACH.
Sep 26, 2017, 6:43 am
#26
Join Date: Aug 2016
Programs: AAdvantage, UR
Posts: 18
Agreed although the price has recovered nicely since 9/15/17. So many other avenues you can take for MS. The transaction fee and Coinbase's 1.49% fee is not worth it even if you plan on buying the dip and holding Bitcoin long term. Just set up an account on Gemini and link your bank account to it. The fee there is 0.25% (6X less than Coinbase) with a $500 max per day ACH.
Oct 17, 2017, 6:36 am
#27
Join Date: Nov 2016
Posts: 5
Agreed although the price has recovered nicely since 9/15/17. So many other avenues you can take for MS. The transaction fee and Coinbase's 1.49% fee is not worth it even if you plan on buying the dip and holding Bitcoin long term. Just set up an account on Gemini and link your bank account to it. The fee there is 0.25% (6X less than Coinbase) with a $500 max per day ACH.
Oct 20, 2017, 3:39 pm
#30
Join Date: Jun 2017
Posts: 86
Exactly. I'm interested to know what cards people are using that they value the "points" greater than 0.04.