Please let me custody bitcoin with IBKR so that I can deposit additional collateral without incurring capital gains taxes. Most of my net worth outside of IBKR is in bitcoin. Various investment banks have started providing institutional bitcoin custody. When is it going to be possible to hold & trade spot bitcoin in a brokerage account?
They don't have portfolio margin so it kinda defeats the purpose. I'm constantly pushing the envelope of IBKR's portfolio margin as it is.
forget that. as far as infrastructure goes, it probably takes another 3 years until a giant like IBKR even considers Krypto assets. The effort, technology and cost of crypto custody are nowhere near traditional levels and onboarding retail is still a nightmare. I'd much rather transfer some BTC to an exchange that lets you trade traditional products margined in BTC. Check out FTX
Give IB recent fines related to AML I doubt they want to get in crypto custody until the US police state clarifies all the rules involved in that
Maybe I can take out a USD loan against crypto, and deposit the proceeds into IB. That'd be almost the same thing except I'd be paying 4% interest on the USD and forgoing 4% interest on twice as much BTC, so the total cost would be 12% of the USD lol. It can't stay that high for long. Competition should bring the rates on these overcollateralized loans down to essentially zero or negative. They'd make all their money from interest on the collateral.
The lender in my example is basically earning 12% on their USD with lower risk than a San Francisco mortgage yielding 3% (because the collateral is so much more liquid & 2x the loan value). Very inefficient market.
No, it's a very efficient market. Have you ever tried to get hands on USD as a crypto company? Nobody will lend you any money. It's the same with you: you have BTC and want to put it down as collateral for USD...an asset that crashes and rallies 6x over a couple of months? And there still is no credit scoring in the crypto space? No dude, 12% is nothing as it barely covers the risk of the lender.
It takes a millisecond to liquidate the collateral. Who cares if it moves 6x over a couple of months. Fucking houses in San Francisco move 2x over a couple of years and take months to liquidate. Fucking uncollateralized personal loans can be found under 12%. It's just the institutional inertia of banks leaving money on the table because they don't want to rock the boat and/or don't understand crypto yet.