The stable coin USDC is the most versatile investment on the market today. Yes, it is a cryptocurrency; however, there is more than meets the eye.
As I wrote in “CryptoCurrency 105: The Stability of Stable Coins,” USDC is a fiat-collateralized stablecoin. This means that for every US dollar people invest into USDC, they mint a USDC coin. It’s truly a one-for-one swap.
The two advantages of USDC. USDC has two advantages over other investments. The first advantage is that your cash is now in the world of crypto.
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Crypto moves at the speed of light. Having a pile of USDC ready to maneuver gives you a massive advantage over someone trying to convert US cash into crypto. Also, if you made a significant profit on some coins, USDC is an excellent place to park your earnings.
This brings me to the second advantage of USDC, the HUGE 9% interest that Voyager (affiliate link) pays you to park USDC. I’ll say that again. Voyager will pay you 9% interest to keep your USDC with them.
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Let’s dissect this interest rate. A 9% interest rate is a living wage and a life changer. In “Living Overseas Passively: Cryptocurrencies,” I wrote that I could live my entire life overseas off of USDC interest.
Think about it, if you had $800,000 in USDC, earning you $6,000/mo in interest. As long as you can live off of $4,000/mo, you would never run out of money. In fact, your cash pile would continue to grow. I still can’t imagine the efficiency of living this life.
A stable 9% interest rate is a huge game-changer. Even better, Voyager is offering a Crypto Debit Card that links directly to your USDC holdings. Again, if you are earning $1,000/mo in interest and using your debit card for $600/mo in expenses, you’ll never run out of money.
An advertisement. If this sounds like an advertisement for Voyager and USDC—it is!! I just started digging into USDC since they announced the Debit Card. That’s when everything clicked for me.
Currently, I have roughly $1,500 in USDC, which pays me over $10/mo in interest. I am trying to add $300/mo to my USDC holding. Remember, I am here for the long run and in no rush to overstack.
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I like to diversify my income across savings, bonds, dividends, real estate (Fundrise), and crypto. However, I envision adding more to USDC as time progress—it is just too good of a deal.
USDC’s greatest risk. The most significant risk you face with USDC is Voyager changing the interest rates. If this happens, you may just need to look at other options. You can evaluate the other coins that offer interest (and capital gains) or just leave your cash there.
You have more direct options to earn interest on USDC. In “Passive Income from DeFi 102: Borrowing and Lending,” I wrote that you could lend money via decentralized finance portals.
You don’t lend your money directly to another person; you put your USDC (or Bitcoin, Ethereum, etc.) into a protocol. The smart contract pays you an interest rate based on supply and demand.
Guess what? USDC is the most versatile coin out there. So, the lending rates are roughly 9% in the open market. The borrowing rates are 11% and higher.
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These facts are why I don’t believe Voyagers’ USDC interest rates are going down any time soon. I think that Voyager pays us 9% and lends to someone else for 11%, turning a small but steady profit. Not a bad deal for anyone.
Do people borrow USDC? Yes, they borrow a lot of USDC. They call this leverage, and everyone is leveraged up to their eyeballs. Investors can sit back and watch the movie while eating popcorn and collecting our 9% interest. Traders will go for USDC loans.
You have to understand the crypto markets to see why USDC lending is a good investment. People don’t borrow USDC at 11% because they want to earn 13% somewhere else. They wish to 5X or 10X their cash in a short amount of time.
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Knowing this, USDC is the perfect medium for us to feed the traders and quick money people while building wealth slowly with 9% compound interest.
Other uses for USDC. You can also use USDC on Voyager as part of your emergency fund. I like to tier my fund between regular saving, high yield savings, Series “I” bonds, and USDC.
Once you have enough in the other accounts, start stacking in USDC like crazy. You are earning 9% interest, and pretty safely at that. I think this is the best investment out there.
I don’t go all-in on USDC because Voyager publishes interest rates on coins every month. If they guaranteed 9% USDC for at least a year, I would put $2,000/mo in there instantly.
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The bottom line. Crypto and DeFi is the wave of the future. We know that the Metaverse is also coming, and it will rely on crypto heavily. You are not doing yourself a favor by hanging on the outside of the crypto-verse.
USDC is an excellent way to invest in crypto, learn the ropes, grow confidence in the system, and prepare for the future. All this while earning 9% interest. Sign me up (out wait, I signed up)!
If you sign up using my link, we will both earn $25 in Bitcoin once you invest $100 on the Voyager platform. I have roughly $9,000 invested in Voyager across six coins. However, I am digging much deeper into USDC this year.
I believe USDC and it’s 9% can change lives. You can earn a safe, livable wage and start your passive income journey without too much fuss. If you want to learn more about cryptocurrencies, read my free book “The Magic of Cryptocurrencies(pdf).” Good Luck, and I’ll see you on Voyager!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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