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First Mover: Day in the Life of a Yield Farmer Means Part-Time Gig, Full-Time Risk
Yield farming steals crypto traders' obsession as bitcoin's volatility falls to 180-day low; Coinbase employees take severance.
One is a Grammy Award-winning musician with lots of spare time. Another is a software engineer with nowhere to go during the pandemic. There’s also an editor for a data site and a fund manager who invests in digital assets.
STORY CONTINUES BELOW
What these people have in common is an obscure side gig known as “yield farming,” a type of cryptocurrency trading and investing that didn’t really even exist until 2020. Yield farming is producing fixed income-like returns that can, at least for brief stretches, provide annualized interest rates equivalent to percentages investors cannot find anywhere else.
As documented in First Mover over the past few months, the yield farming boom, itself a subsector within the fast-evolving realm of decentralized finance, or DeFi, started in June when the projects Compound and Aave launched. They were soon followed by Kyber, Balancer and Yearn.Finance. More creative names like Spaghetti, Tendies and SushiSwap followed.
CoinDesk's Daniel Cawrey spoke to four yield farmers to get their stories. Here's a link to his highly recommended piece, along with a video interview he conducted with André Allen Anjos, also known as RAC, who finds time for yield farming in his spare time, when he's not producing and recording music.
Read More: Meet the Yield Farmers Plowing Cryptocurrency’s Riskiest Trend
Bitcoin Watch
Bitcoin's low volatility consolidation continues as the dust settles on the BitMEX controversy.
On Thursday, the U.S. authorities charged the crypto derivatives exchange for facilitating illegal transactions.
Initially, bitcoin fell from $10,900 to $10,450 but recovered to $10,500 on the following day. The cryptocurrency held ground even though the regulator probe triggered massive outflow of bitcoins from BitMEX and the drop in the futures open interest, a sign of panic among traders.
However, while the cryptocurrency has jumped to $10,700 over the weekend, it remains trapped in a contracting triangle, as seen on the daily chart.
A breakout would confirm an end of the pullback from the August high of $12,476 and a reversal higher. That would expose resistance lined up at $11,183 (Sept. 19 high).
Alternatively, a range breakdown may invite a stronger chart driven selling pressure.
- Omkar Godbole
Read More: Open Interest in CME Bitcoin Futures Slides as Market Sapped by Surging DeFi
Token Watch
Bitcoin (BTC): 180-day volatility falls to lowest mark since November 2018 as market mostly unfazed by President Donald Trump's positive coronavirus test and U.S. charges against BitMEX cryptocurrency exchange.
Ripple (XRP): Job listing indicates XRP-affiliated blockchain sponsor is preparing to launch a next-generation trading platform.
What's Hot
SEC Chair Jay Clayton says U.S. regulator is open to the idea of a tokenized ETF (Decrypt)
Bitcoin use rises in Egype amid economic recession (Cointelegraph)
Analogs
The latest on the economy and traditional finance
Pandemic could accelerate depletion of U.S. Social Security trust fund reserves (Brookings)
Movie-theater chain Cineworld closing U.S. and U.K. locations, including Regal chan (FT)
U.S. Treasuries lose their edge as hedge against stock-market plunge (WSJ)
Negative-yielding bonds could profit from deflation, currency swings (WSJ)
Tweet of the Day
Longest #Bitcoin streak ending the day above $10,000 still going strong despite this last week.
— Danny Scott ⚡ (@CoinCornerDanny) October 4, 2020
Today will be day 69...
Daniel Cawrey
Daniel Cawrey has been a contributor to CoinDesk since 2013. He has written two books on the crypto space, including 2020’s “Mastering Blockchain” from O'Reilly Media. His new book, “Understanding Crypto,” arrives in 2023.
Omkar Godbole
Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.
Bradley Keoun
Bradley Keoun is CoinDesk's managing editor of tech & protocols, where he oversees a team of reporters covering blockchain technology, and previously ran the global crypto markets team. A two-time Loeb Awards finalist, he previously was chief global finance and economic correspondent for TheStreet and before that worked as an editor and reporter for Bloomberg News in New York and Mexico City, reporting on Wall Street, emerging markets and the energy industry. He started out as a police-beat reporter for the Gainesville Sun in Florida and later worked as a general-assignment reporter for the Chicago Tribune. Originally from Fort Wayne, Indiana, he double-majored in electrical engineering and classical studies as an undergraduate at Duke University and later obtained a master's in journalism from the University of Florida. He is currently based in Austin, Texas, and in his spare time plays guitar, sings in a choir and hikes in the Texas Hill Country. He owns less than $1,000 each of several cryptocurrencies.
