Research Summary
The report explores the feasibility of receiving salary in Bitcoin in Singapore, considering the failing banking system and inflation. It presents three options: Long Bitcoin, Short SGD; Long Bitcoin, Neutral SGD; and Neutral Bitcoin, Long SGD. Each option involves different strategies for managing expenses and savings, with varying levels of exposure to Bitcoin’s price volatility. The report concludes that living on a Bitcoin standard is possible in Singapore, with transaction fees being the main challenge.
Key Takeaways
Exploring Bitcoin as a Salary Option
- Long Bitcoin, Short SGD: This strategy involves using credit to cover daily expenses, betting on Bitcoin’s value to increase against the Singapore Dollar (SGD). As Bitcoin’s value rises, credit card bills become cheaper. Services like ipaymy.com can be used to make bank transfers using Bitcoin, charging a 0.8% transaction fee.
- Long Bitcoin, Neutral SGD: This approach involves holding the salary in Bitcoin and using services that auto-convert from Bitcoin to SGD. The bet here is that Bitcoin’s value will increase more than the fees incurred. Bitcoin-backed debit cards can be used, but they come with custodian risk and potential monthly fees.
- Neutral Bitcoin, Long SGD: This strategy involves holding Bitcoin while budgeting fiat expenses and hedging at the start of the month. This can be done by selling Bitcoin on a spot exchange or taking a short position on BitMEX.com. This strategy minimizes exposure to Bitcoin’s price volatility.
Actionable Insights
- Consider the Bitcoin Standard: Given the current economic climate, individuals in Singapore might consider receiving their salary in Bitcoin. This requires a shift in mindset, as prices tend to trend downwards over time on a Bitcoin standard.
- Assess Personal Financial Situation: The feasibility of living on a Bitcoin standard depends on one’s financial situation. If monthly expenses are less than the salary and there’s a desire to escape the fiat system, a Bitcoin standard might be suitable.
- Monitor Market Developments: As more competition enters the market, transaction fees associated with Bitcoin transactions are expected to decrease. Keeping an eye on these developments can help in making informed decisions.
