Bitcoin is not an investment tool. It’s a savings tool
"Celsius lied to investors by presenting itself as a safe investment opportunity and a chance to gain financial freedom, but, behind the scenes, the company operated a failed business model and took significant risks with investors' crypto assets."
— Gurbir S. Grewal, Director, Division of Enforcement, SEC
Bitcoin is not an investment tool. It's a savings tool
This week the Securities and Exchange Commission (SEC) charged Celsius and its founder Alex Mashinsky with the unregistered offer and sale of crypto asset securities through Celsius’s lending program, making false and misleading statements, and engaging in market manipulation
If you invested your money there, that money is gone and I'm sorry for you.
If you’re new to Bitcoin and you are considering buying Bitcoin, you’re probably wondering:
How do I avoid the next Celsius?
How do I make sure that I’m working with a company that won’t pull the rug out from under me?
There is no such thing as 100% certainty, but based on my experience, the companies that meet the following criteria are unlikely to rug pull you:
- Bitcoin only.
- Does not offer yield.
- Encourages you to self-custody.
Bitcoin only
There is Bitcoin, and then there is everything else.
The SEC itself classifies Bitcoin as a commodity and all other crypto currency tokens as securities (and most of them operating as unregistered securities).
Companies that focus exclusively on Bitcoin are driven by their desire to expand the adoption of Bitcoin.
These companies won’t try to sell you other tokens (shitcoins) and promise you that you’re going to catch the next wave, the next token to go to the moon, just to take your money.
Does not offer yield
Bitcoin is like digital gold. Bitcoin on its own does not produce anything and therefore it offers no yield.
A company that offers you certain return on your Bitcoin deposits can only do so by giving your deposits to speculators and hoping that they will deliver a return equal or higher than what this company offered you.
They also really hope that the speculators don’t lose your money because that’s when they start doing the funny accounting to hide the loses.
You want to avoid that. Don’t chase yield.
Just save with Bitcoin and be happy that your savings are stored in the soundest money in the world.
Encourages you to self-custody
Bitcoin was built so that no one can rug pull you. If you self-custody your Bitcoin, as opposed to letting others custody it for you, It has no counter party risk.
When you self-custody your Bitcoin, nobody can take it away from you. There is no rug to pull.
You want to self-custody and therefore you want to work with companies that encourage you and make it easy for you to move your Bitcoin from their custody to yours.
My recommendations
These are the companies that I feel comfortable recommending.
Swan
I buy Bitcoin with Swan. Their CEO is extremely vocal in calling out crypto companies that he believes are doing the wrong thing: he called out FTX and Celsius way before they collapsed and he has also called out Binance (which hasn’t collapsed, so far).
Just watch the latest episode of their Swan Signal episode to get an idea of how they operate:
Unchained
Unchained offers storage, inheritance and retirement Bitcoin products. I have not worked with them but I have heard very good feedback from people I trust.
Notable notes
Recommendations
Cory Klippsten
Cory is on a mission to onboard 10 million people to Bitcoin and help them self-custody.
Follow him on Twitter if you want to stay clear of unethical operators in the industry. He has no qualms calling them out.
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— Alejandro
This newsletter is for educational purposes. It does not represent financial advice. Do your own research before buying Bitcoin.