YieldNodes Review: ‘Crypto Winter’ Forces an Immediate Pivot

YieldNodes was going so well... but this crypto market is tough.

I deposited around €30,000 (approximately £25,000) into my YieldNodes account. It ended up as a little more than that as the Bitcoin price rose slightly as I was transferring it across.

There's a 7 day holding period while servers are rented, so I received a return of €821 at the end of November 2021 which covered a few days.

From December 2021, my full balance went to work and I compounded 100% of my monthly profits. After six months of compounding, I withdrew my initial €30,131.

I'd originally deposited 0.570377 Bitcoin but I received 1.2697 Bitcoin back because the price had dropped since November. That was an unexpected bonus of 0.699323 Bitcoin!

I left the balance of €21,013 which was now completely risk-free!

Also, I reduced the compounding percentage to 50% which gave me a monthly income, while still growing my overall balance.

Here's my monthly progress:

What Happened to the Market?

As we all know, nothing in crypto is zero risk. If that were the case, I'd invest 100% of my net worth and never work another day of my life!

I wrote previously, "crypto is risky so don't deposit more than you could afford to lose if, for some reason, everything went wrong".

Central banks have taken action to combat global inflation and they do this by increasing interest rates. With the cheap money gone, riskier assets are not being bought up and selling pressure is reducing their value.

At some point, the market will reach the bottom. When it does, smart investors with cash will buy assets cheaply and make a fortune.

We've seen this happen a number of times in the housing market. Higher interest rates force more repossessions, property prices fall because there's more supply than demand, then those with cash buy up all the bargains.

What Happened to YieldNodes?

While there was plenty of cheap money around, the YieldNodes business model worked perfectly. They were able to sell all the masternoded coins and pay everyone out.

However, there are not nearly as many buyers in the crypto market right now and liquidity for smaller coins has dried up.

In addition, a couple of exchanges have frozen YieldNodes' assets. If you've ever had an issue with Binance, you'll know how long it takes them to fix it.

Rather than go into hiding or disappear with everyone's money, CEO Stefan Hoermann has addressed all the issues in a video interview.

He said that "we do not want to leave anyone with a loss" and that "no-one needs to fear that we are going anywhere".

Here's the full interview...

What Happens Now?

The plan is switch to 'YieldNodes Pro' which includes physical assets. This has always been in the works, it's just being pulled forward out of necessity.

While the team work on the switch, we will receive a 5% return quarterly. This is obviously less than the monthly returns that were regularly achieved, but still very good.

My savings account at Lloyds Bank only pays 0.4% annually!

The first 5% payout occurred at the end of December 2022. I received €1,562.07 though, of course, there's not a lot that I can do with it at the moment.

I could put some (or all) of my account balance up for sale at 40% of the total value, but that seems a bit drastic.

If the YieldNodes team can make the switch successfully, we'll all have the option to withdraw, continue earning or a bit of both.

Considering all the other crypto projects and companies that have hit the wall recently and left investors with nothing, this sounds much more hopeful.

Good luck to Stefan and his team.