Get On Zero (fiat): The Strike Update

 

 

 

 

 

Introduction:

 

Since adopting a "Getting on Zero" lifestyle nearly two years ago, I’ve experimented with various strategies and services to maximize efficiency while minimizing my exposure to fiat currency.

 

In the original version of this article, I shared how I was using Fold as part of my financial workflow. While Fold continues to offer an excellent product, the release of Strike’s Bill Pay feature prompted me to transition all my fiat accounts to their service. This update reflects my reasoning for making the switch and why I’m so excited about Strike’s new offering.

 

Most of the original content remains unchanged, but I’ve revised this article to reflect my current approach. For comparison, you can still view the original version here.

 

 

Theory:


The #GetOnZero movement advocates transitioning entirely to Bitcoin, abandoning holding fiat currency in daily life. The goal is to maintain maximal exposure to Bitcoin while minimizing exposure to traditional fiat currencies. Proponents of #GetOnZero believe that by converting all their money into Bitcoin, they not only commit fully to the Bitcoin ecosystem but also protect themselves against inflation and other potential issues with fiat money.

 

While I wouldn't say there is much debate on exactly what qualifies as being "OnZero", there are definitely a number of different interpretations. Some may argue that truly being "OnZero" requires completely opting out of fiat rails, and finding ways to directly pay in bitcoin for all expenses. Personally, I take a slightly more relaxed view, simply pushing for the avoidance of fiat currencies and instruments as savings and investment vehicles, and keeping all our stored value in bitcoin.

 

While the value of being completely "OnZero" is apparent during periods of significant price appreciation against the dollar, I will be the first to acknowledge the potential losses that could result from holding to this strategy during periods of significant negative price action. To this end, I have created a 3-tiered system of strategies, with each strategy tailored to specific market conditions. I understand that the most zealous lazer-eyed #GetOnZero proponents, the strategies below may not align with their personal philosophy on what the strategy is supposed to represent.

 

Take what you will from the strategies laid out below, it is my intent to provide a systematic list of actions to be taken in different market conditions, in an attempt to make things more approachable to the average reader.
 


#GetOnZero Strategies:

 

Bull Strategy: Expenses on credit, income to Sats, sell once monthly to pay Fiat bills

 

Description: This approach involves using credit cards or lines of credit for all expenses throughout the month. Meanwhile, income is converted immediately into bitcoin (sats). At the end of the month, a portion of Bitcoin is sold to cover the credit card bill and any other fiat-denominated obligations.

 

  • Pros:
    • Maximizes bitcoin holdings throughout the month, allowing for potential price appreciation.
    • Credit cards can offer rewards that can further offset expenses or even be converted into sats.
  • Cons:
    • Requires a disciplined approach to avoid accumulating debt.
    • May expose you to volatility risk if bitcoin's value drops before the end-of-month payment.

 

 

Crab Strategy: Expenses on credit, reserve Fiat until EOM, pay bills, stack difference

 

Description: In this method, income is initially held in fiat. Expenses are paid using credit, but instead of immediately converting fiat to bitcoin, it is done at the end of the month, once all bills are paid. The remaining balance (after paying bills) is then converted to bitcoin.

 

  • Pros:
    • Provides a safety net against bitcoin price volatility during the month.
    • Ensures that all fiat obligations are covered before committing to bitcoin.

  • Cons:

    • May reduce bitcoin exposure if the price appreciates during the month.
    • Requires discipline to consistently allocate remaining fiat to bitcoin.

 

 

Bear Strategy: Fiat Buffer (aka: NotOnZero...)


Description: This approach involves maintaining a fiat buffer to handle any unexpected expenses or market volatility. While income is mostly converted to bitcoin, a portion remains in fiat to provide liquidity and flexibility.

 

  • When to use: This strategy may be appropriate in times of severe market uncertainty or for those transitioning gradually to the #GetOnZero lifestyle.
  • Pros:
    • Offers a cushion for unexpected fiat expenses, reducing the need to sell bitcoin unexpectedly.
    • Can be adjusted based on individual risk tolerance and liquidity needs.

  • Cons:

    • Reduces total exposure to bitcoin, potentially missing out on gains.
    • May require active management to maintain the buffer and adjust it according to changing circumstances.

 

 

Liquidity Considerations:

 

Bitcoin’s high correlation with global liquidity makes it a reliable barometer for macroeconomic conditions. According to recent analysis by Lyn Alden and Sam Callahan, bitcoin's price aligns with global liquidity trends in 83% of 12-month periods, demonstrating its sensitivity to central bank policies and money supply changes.​ (Bitcoin: A Global Liquidity Barometer)

 

Given bitcoin’s responsiveness, different #GetOnZero strategies may be effective depending on liquidity environments:

 

 

  • The Bull Strategy is ideal in increasing liquidity environments, where bitcoin's value is more likely to rise, and the individual can benefit from holding sats longer before converting.

  • The Crab Strategy is suitable for flat or slightly decreasing liquidity environments, as it provides a way to manage fiat expenses and avoid forced bitcoin sales during short-term downturns.

  • The Bear Strategy is a possible strategy for periods of sharp reductions in liquidity which have historically accompanied bear markets in bitcoin. It is specifically not being "On Zero", but that doesn't mean there might not be times where that itself is a good strategy.

 

The paper emphasizes that while bitcoin’s long-term price direction generally follows liquidity changes, short-term deviations can occur due to idiosyncratic events or internal market dynamics. Savers could monitor bitcoin-specific metrics like the Market Value to Realized Value (MVRV) Z-score to gauge potential overvaluation or undervaluation periods. This, combined with global liquidity trends, allows for more informed strategy adjustments​.

 

 

Hello Strike!

 

 

As I mentioned in the introduction, I recently transitioned to using Strike’s Bill Pay feature for my Bitcoin-to-fiat transactions. Let’s explore the reasons behind this change.

 

The standout feature of Strike’s Bill Pay is its ability to auto-convert bitcoin to fiat at the exact moment an ACH payment request posts.

 

Previously, with Fold and other services, I had to manually manage my fiat balance to ensure sufficient funds were available when my bills were due. This process was complicated by the unpredictability of when payments would clear—curse fiat for not operating 24/7 or on weekends! To avoid issues, I often had to sell bitcoin in advance, ensuring the fiat was ready in time. This introduced an unnecessary layer of stress and timing risks.

 

Here’s where Strike’s innovation really shines. With Strike, I can fund ACH payments directly from my bitcoin balance. The system automatically converts just the required amount of bitcoin to fiat precisely when the payment is processed.

 

This provides me with peace of mind. I no longer need to set reminders to convert bitcoin to fiat or worry about keeping a fiat buffer in my account for bills. Even better, I’m no longer stuck selling bitcoin days in advance for a bill, only to watch its dollar value surge 10% before the ACH pull—leaving me kicking myself for missing out on gains.

 

 

Pup's #GetOnZero Workflow:

 

As outlined in the original version of this article, I use credit cards for all my spending throughout the month, strategically matching expenses to cards that offer the best rewards. My paychecks are direct-deposited into Strike, where they are automatically converted to bitcoin.

 

When my bills come due, creditors initiate an ACH payment request from my Cross River Bank account, which is linked to Strike. bitcoin is then automatically sold to cover these payments.

 

 

I understand that some may have concerns about holding sats with a custodian. Personally, I limit my exposure by keeping only about a month’s worth of expenses there. While I strongly advocate for storing bitcoin in cold storage, I’ve chosen to accept the risk on this small portion of my sats for the convenience it brings to my financial workflow. Between holding one month of expenses with a custodian in fiat or bitcoin, I’ll gladly choose bitcoin. That said, these are tradeoffs I’ve made after careful consideration, and I encourage you to do your own research and weigh the risks before making similar decisions.

 

To wrap things up, I hope you’ve found this article informative—or at the very least, entertaining! If you have any questions about what I’ve discussed here, don’t hesitate to reach out.

 

 

Block 874767 - MSK 989

 

 

Digging Deeper:

 

Hey there, I hope you enjoyed this read! If you did, and would like to read more of my barks, follow the links below!

 

External Resources:

 

 

...Woof!