Conservative Investment Strategy
About This Strategy
The conservative investment strategy is for anyone who wants to “fire and forget”. Who doesn’t want to worry about manually rebalancing investment portfolios or optimizing yield targets. Who just wants a simple solution that provides a reasonably low risk for a relatively high yield savings account.
This strategy was last updated in November 2021.
Table Of Contents
TL;DR
For a conservative strategy, BlockFi offers the best risk/reward ratio. Closely following it is Ledn.
Asset Allocations
Bitcoin Balance
Below 2 BTC
If you have less than 2 BTC, simply store the entire balance in Ledn. You’ll get 6.10% interest on the full amount.
Above 2 BTC
If you have more than 2 BTC, the allocation becomes more complicated.
- The first 2 BTC should still go to Ledn, to maximize the Tier 1 earnings at 6.10%.
- The next 0.1 BTC should go to BlockFi, to maximize the Tier 1 earnings there at 4.5%.
- The remaining BTC should all be held with Ledn, since the Tier 2 rates there (2.25%) are higher than both Tier 2 (1.0%) and Tier 3 (0.1%) at BlockFi.
Stablecoin Balance
Below $40,000 USD
If you have less than $40,000 USD (whether in fiat, or various stablecoins like USDC or GUSD), simply store the entire balance in BlockFi. The risk is very low (withdrawals typically require identity verification), and you’ll be earning 9.0% on the entire balance, which compares favorably with Ledn at 9.5%.
Above $40,000 USD
If you have more than $40,000 USD, it’s worthwhile maximizing the Tier 1 rates at BlockFi before overflowing to Ledn for the remainder.
- The first $40,000 USD should go to BlockFi, to maximize the Tier 1 earnings at 9.0%
- The next $60,000 USD should go to Ledn
- All balances above this should be split between the two services (to minimize the counterparty risk, and potential withdrawal delays for large balances)
The rates at BlockFi in Tier 2 (8.0%) are significantly lower than Ledn (9.5%), so we recommend a 40%/60% distribution of assets across the two services to provide a good balance of risk and reward.
Note: BlockFi tiers are per asset. This means that you can max out $40,000 USD in each different stablecoin (USDC, GUSD, DAI, USDP) and still receive the Tier 1 interest rate of 9.0% for the entire amount. Tether (USDT) is even higher at 9.5% interest rate, but we consider it higher risk and recommend storing assets in the other stablecoins instead.
Special Offers
If you would like to try any of the services mentioned in this strategy, you can find links below to receive a bonus when you register as a new user. Using these links also helps us, so it’s a win-win.
Note: This strategy is provided for informative purposes only, and does not represent financial advice. Please consult a financial advisor before making any decisions about your investments.