Crypto Macro Trends for 2022

[johnarb]

*** Post is for entertainment purposes only ***

Crypto companies and projects that are contributing to the current downtrend, in addition to the overall Fed macro stuff. Contagion amongst the crypto firms

Liquidations can feed on itself so we do not know how low btc will go during this crypto winter. I'm waiting for $10K/btc to start buying if btc goes that low

I'm not selling as have enough cash for living expenses. Ymmv. Good luck to all cryptos hodlers

• LUNA/UST (already failed)
• stEth/Eth staking
• Celsius (insolvent? - still ongoing)
• 3AC (insolvent? - not responding to margin calls - still ongoing)
• BlockFi (exposure to 3AC, raising cash - still ongoing)
• Voyager (exposure to 3AC, raising cash - still ongoing)
• Babel (insolvent? - still ongoing)

https://twitter.com/x/status/1539268631095152642

https://twitter.com/x/status/1539645629772664832

https://twitter.com/x/status/1539624367898116097

 

[The_Krakenite]

Bro, you should see the leverage the banks did on toxic securities back in my days...

By the way, LehMan Bros went over 40-to-1 when 20-to-1 was pushing it. No sympathy for me when they went under. Public tax-payer should no that have to get stuck footing the bill when risk-managers don't do their job because everyone wants to push the bonuses.

 

[NoahA]

Bro, you should see the leverage the banks did on toxic securities back in my days...

By the way, LehMan Bros went over 40-to-1 when 20-to-1 was pushing it. No sympathy for me when they went under. Public tax-payer should no that have to get stuck footing the bill when risk-managers don't do their job because everyone wants to push the bonuses.

Exactly right. Everyone is beating up on crypto but doesn't anyone consider how insolvent the government is? And how long it has been so?

Imagine if you could have put a floor under the BTC price of 30k with an unlimited buyer scooping up every satoshi that was offered at a lower price. It would have never dropped lower. With all of these crypto firms having to liquidate, if everyone knew BTC could never drop below 30k, their reserves would have looked healthy and there probably would not have even been this drop and forced selling.

Its how it works with US treasuries and every single bond the government is buying. The insolvent US government is that unlimited buyer. So if you ask me, the financials of fiat are way more corrupt than crypto. What we are seeing in crypto is exactly what would have happened to US treasuries and corporate bonds if Powell wasn't able to go brrrrrrrrrr. You'd have easily a 90% drop in many asset classes. And this is what should have happened. Crypto is just following natural market dynamics, and the US dollar is following fairytale dynamics.

 

[savoir]

*** Post is for entertainment purposes only ***

Crypto companies and projects that are contributing to the current downtrend, in addition to the overall Fed macro stuff. Contagion amongst the crypto firms

Liquidations can feed on itself so we do not know how low btc will go during this crypto winter. I'm waiting for $10K/btc to start buying if btc goes that low

I'm not selling as have enough cash for living expenses. Ymmv. Good luck to all cryptos hodlers***

I think you have a lot of company, johnarb. A friend told me her 401k is down 50% but it always comes back. So hodling is not exclusive to Bitcoin believers.

 

[deaddog]

Imagine if you could have put a floor under the BTC price of 30k with an unlimited buyer scooping up every satoshi that was offered at a lower price. It would have never dropped lower. With all of these crypto firms having to liquidate, if everyone knew BTC could never drop below 30k, their reserves would have looked healthy and there probably would not have even been this drop and forced selling.

So why didn't that happen? With all the hype going on you'd think that there would be a whole herd of greater fools waiting in line to pick up a few satochis at such a bargain price. It will be over 70K in less than a couple years. Fortune favors the brave!!!

Could it be that people trust the dollar. After all, although it might not buy as much in a year you can pretty well be guaranteed it will be worth a dollar.

 

[NoahA]

So why didn't that happen? With all the hype going on you'd think that there would be a whole herd of greater fools waiting in line to pick up a few satochis at such a bargain price. It will be over 70K in less than a couple years. Fortune favors the brave!!!

Could it be that people trust the dollar. After all, although it might not buy as much in a year you can pretty well be guaranteed it will be worth a dollar.

You totally missed what I was saying. There isn't an unlimited buyer for bitcoin, hence the price has to drop to a level at which any buying is sufficient to cover all the selling. The buying is only from regular retail or institutions.

US treasuries and bonds on the other hand has a buyer with an unlimited pocketbook. Imagine if the FED didn't step in and start buying bonds and US treasuries like crazy? How high would the yields have to go? The government just printed the money in order to buy how ever much they needed. In fact, if you look up who the buyers of US debt are, you see that over the years, the FED is responsible for more and more of this buying since foreign governments aren't buying as much.

https://wolfstreet.com/2022/05/19/w...ebt-now-30-4-trillion-in-treasury-securities/

So my point is that its not fair to say look at how low bitcoin is going since it doesn't have the magical power to create a limitless buyer like the US government can do with their toxic treasuries. You can say a dollar will be worth around a dollar, but only because the cost to print up the money to maintain this peg was not very much. Now as the central banks are claiming to do some quantitative tightening, lets so who will willing to buy toxic sludge for low rates. Think about it. If inflation is running 8%, wouldn't you want at least 10% to lend your dollars out?

 

[johnarb]

Exactly right. Everyone is beating up on crypto but doesn't anyone consider how insolvent the government is? And how long it has been so?

Imagine if you could have put a floor under the BTC price of 30k with an unlimited buyer scooping up every satoshi that was offered at a lower price. It would have never dropped lower. With all of these crypto firms having to liquidate, if everyone knew BTC could never drop below 30k, their reserves would have looked healthy and there probably would not have even been this drop and forced selling.

Its how it works with US treasuries and every single bond the government is buying. The insolvent US government is that unlimited buyer. So if you ask me, the financials of fiat are way more corrupt than crypto. What we are seeing in crypto is exactly what would have happened to US treasuries and corporate bonds if Powell wasn't able to go brrrrrrrrrr. You'd have easily a 90% drop in many asset classes. And this is what should have happened. Crypto is just following natural market dynamics, and the US dollar is following fairytale dynamics.

There's a silver lining to all of these crypto firms that are getting liquidated or going bankrupt... The very thing pushing them to bankruptcy is that the hodlers are withdrawing the crypto assets to self custody

Once this is over, the crypto assets will be in stronger hands and less vulnerable to market risks such as the ones coming from TradFi or leveraged traders and projects

 

[NoahA]

There's a silver lining to all of these crypto firms that are getting liquidated or going bankrupt... The very thing pushing them to bankruptcy is that the hodlers are withdrawing the crypto assets to self custody

Once this is over, the crypto assets will be in stronger hands and less vulnerable to market risks such as the ones coming from TradFi or leveraged traders and projects

I agree that out of this, a stronger crypto market will be born, but I'm not sure I understand your rationale.

An exchange shouldn't lose anything just because a person decides to take their coins into cold storage. Perhaps you mean the defi projects where people are earning yield? If this, then for sure that is the case. At the same time though, if the only reason to hold crypto was for the yield, then I can see more selling as the only use case for these people was the yield.

Bitcoin of course doesn't really offer any yield, its just an asset, but other coins that you can either get yield on, or staking benefits, then this of course qualifies.

But I fully agree that once the flush out happens, the crypto will be in stronger hands.

 

[johnarb]

I think you have a lot of company, johnarb. A friend told me her 401k is down 50% but it always comes back. So hodling is not exclusive to Bitcoin believers.

Thanks savoir. This is the first bear market that is shared between stocks and cryptos other than a short period around March 2020. The most difficult thing about a bear market for me is the feeling of helplessness

I'm sorry about the loss of your friend, Sandy... Life is too short. I ran into a Twitter thread about an odd subject of quantifying life's moments and I saved it. I collect odd things because I am odd at times

Anecdotally, the math made sense to me. In college, used to go out of town with a large group of friends, fishing and hiking at least once a year, and with small number of high school friends, we had a tradition to watch, drink and smoke out for Superbowl

The former I haven't done in over 10 years, while the latter only twice in the last 10 years and before Covid

Just sharing the Twitter thread if it's of interest

https://twitter.com/x/status/1507787390114488322

 

[deaddog]

You totally missed what I was saying. There isn't an unlimited buyer for bitcoin, hence the price has to drop to a level at which any buying is sufficient to cover all the selling. The buying is only from regular retail or institutions.

OK; Lets see if there is anything we can agree upon.
Will we need a fiat currency in the future? If we don't have a fiat how will you assign a value to bitcoin?