Invest Wisely: Understanding T-Bills • Letter 105

Hedgehog Admin -

Hello there, it's Colton Dillion, co-founder of Hedgehog, the crypto robo-adviser that manages your money wherever it is: Cefi or Defi.

If you haven’t heard already, the Hedgehog app is available on Google Play and the App Store. The current list of Stacks to choose from, supporting currencies representing more than 85% of the crypto market cap, include:

  • Total Crypto
  • Layer One
  • ETH Network
  • DeFi
  • Yield Farming
  • Satoshi

Treasury Bills

This week, we will be exploring Treasury Bills (T-Bills), a widely recognized and trusted investment instrument issued by the government. Known for their safety, liquidity, and reliable returns, T-Bills are a common allocation of many investors' portfolios. So here we go, let's dive into the universe of T-Bills and answer why they are considered a safe haven investment.

Treasury Bills, or T-Bills, are short-term debt securities issued by governments to finance their operations or meet short-term funding needs. In the United States, T-Bills are issued by the U.S. Department of the Treasury. These securities are typically sold at a discount from their face value and mature in less than one year.

T-Bills are widely regarded as one of the safest investments available. They are backed by the full faith and credit of the government, making them virtually risk-free, or at least risk-free in the sense that if the U.S. government isn't paying you back, you have much bigger risks to worry about. The U.S. government has a long-standing history of meeting its debt obligations, providing investors with a high level of confidence in the repayment of T-Bills.

Although the interest rates on T-Bills may vary depending on market conditions, they are generally considered low-risk, low-yield investments. The yield on T-Bills is determined through competitive bidding at Treasury auctions, with investors willing to accept the lowest yields being awarded the securities.

T-Bills are highly liquid investments. They can be easily bought and sold in the secondary market, providing investors with the flexibility to access their funds when needed. This liquidity makes T-Bills an attractive option for investors who require short-term cash management or have specific financial obligations to meet.

One of the key features of T-Bills is their short maturity period. They are typically issued in three-month, six-month, and one-year terms, allowing investors to choose the maturity that aligns with their investment horizon. The short duration of T-Bills helps mitigate interest rate risk, as their prices are less sensitive to changes in interest rates compared to longer-term bonds. This short duration could have helped out Silicon Valley Bank, Silvergate, and Signature when their longer-term bonds lost value as the government hiked rates on new issues. We did an in-depth explanation of how these banks collapsed on our YouTube channel.

As with any investment decision, it's important to carefully assess your financial goals, risk tolerance, and consult with a financial advisor. Treasury Bills can be a useful addition to your investment portfolio, providing a solid foundation of security and liquidity.

Quick Hits

Logan Paul’s promise to Crypto Zoo NFT holders still unfulfilled six months later. The refund to his investors was made under pressure from Coffeezilla’s damaging report.

In a similar NFT faux pa, The Azuki Elements community starts a Dao to take legal action against its founder. The newer Elements collection sold out in 15 minutes but on the reveal the art looked too similar to the previous collection tanking the value.

IRS orders Kraken crypto exchange to turn over data relating to users who held 20k or more on their platform. The dates of use for this round of investigation include 2016 to 2020.

r/Cryptocurrency celebrates the nine year anniversary of the United States government auction to sell 30,000 BTC to a Venture Capitalist, Tim Draper. At the time it was valued at $18 million which now stands at a cool $920 million.

Giveaway

Answer the question of the week for a chance to win three of these prizes:

  • insulated stainless steel water bottle with Hedgehog logo
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  • snazzy Hedgehog socks
  • cozy Hedgehog hoodie
  • comfy Hedgehog baseball tee

Before this week’s newsletter how familiar with T-Bills were you? Reply to this email with your story and you'll be entered in the giveaway.

Keep hedging,
Colton