Monitoring the Crypto Bubble

Where do you think we are in the crypto bubble?

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No one talks about Tether enough... It is the backbone of liquidity for the crypto industry, if that goes belly up the whole thing will implode on itself. It would go down as the largest financial fraud in the history of the world, larger than Madoff and all the rest. USDC is a better alternative as it has been apparently regulated within the United States, and from what I've heard actually audited.

Let's all just hope that Tether will be able to withstand the next bear market, which I just don't think they will be able to - there's too many ETFs and larger players at stake now. Personally wouldn't ever INVEST in the asset just for this reason... Until Tether has been audited I would steer clear far away from it.
 
IPDA said:
Asset class, sorry. The whole thing. At least until Tether can show an actual audit, otherwise it is far too risky for me.
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You're in the best position to judge appropriate risk for yourself.

As far as the market goes, IMO Tether risk as a whole is overblown. While concerns over its auditing process are justified and the impact on liquidity from a USDT collapse are real, USDT is not the sole means available to anyone wanting to transfer assets or trade value. The crypto market is far more flexible than the legacy financial market so any concerns around liquidity should USDT collapse wouldn't have the same impact as say should credit collapse in the used car or RE market.

I would say that most investors in the crypto market are not too concerned over the issue. Since USDT was first brought to market in 2014, BTC has risen about 16500% and survived a number of bear markets, exchange collapses, repeated Tether FUD and numerous other scares.

What a potential investor really needs to weigh up is the opportunity cost of staying on the sidelines in fear of an event that may never transpire, or one that should it transpire not morph into a Minsky Moment.
 
mmm....shiney! said:
You're in the best position to judge appropriate risk for yourself.

As far as the market goes, IMO Tether risk as a whole is overblown. While concerns over its auditing process are justified and the impact on liquidity from a USDT collapse are real, USDT is not the sole means available to anyone wanting to transfer assets or trade value. The crypto market is far more flexible than the legacy financial market so any concerns around liquidity should USDT collapse wouldn't have the same impact as say should credit collapse in the used car or RE market.

I would say that most investors in the crypto market are not too concerned over the issue. Since USDT was first brought to market in 2014, BTC has risen about 16500% and survived a number of bear markets, exchange collapses, repeated Tether FUD and numerous other scares.

What a potential investor really needs to weigh up is the opportunity cost of staying on the sidelines in fear of an event that may never transpire, or one that should it transpire not morph into a Minsky Moment.
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It's not FUD, it's in their own ToS. Really dislike when the crypto crowd dismisses genuine critism, what isn't FUD?? :rolleyes::D Everything needs to be sunshine and rainbows in crypto land all the time I guess.

This is their own words from their site: "Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether".

This should concern anyone in crypto, because if there is ever an event of a liquidity crunch or a run on the exchanges, Tether is not obliged to actually provide redemption. Again, that's their words. And I would actually argue the crypto world is far LESS flexible than the traditional, as the traditional financial markets actually have some regulations and adherence the crypto is the wild west. No opportunity cost lost, you can still trade the market without being one of the silly HODLers that invest. It's a traders market, not really an investors IMO.
 
IPDA said:
It's not FUD, it's in their own ToS. Really dislike when the crypto crowd dismisses genuine critism, what isn't FUD??
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I acknowledged the concerns around the auditing of USDT, they're genuine.

IPDA said:
Everything needs to be sunshine and rainbows in crypto land all the time I guess.
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No, it's immaterial to us because we understand that crypto's value is not determined by any perceived threat to liquidity that a collapse of USDT could possibly have on the market. If it happens and does have a negative effect the market will correct because we invest in BTC because we assign value to it, not to the functional apparatus which has emerged in association with it.

Mt Gox, the government will shut it down, it is too volatile, it wastes energy, it is used by criminals, it's a bubble, it's not a currency, FTX, it can be hacked, it's a CIA scam, it's a Chinese scam...

IPDA said:
This should concern anyone in crypto, because if there is ever an event of a liquidity crunch or a run on the exchanges, Tether is not obliged to actually provide redemption.
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Apart from the fact that there have been numerous runs on exchanges yet BTC is still posting ATHs, on what planet would anyone store their wealth in USDT and therefore be in fear of not having their funds redeemed?

IPDA said:
No opportunity cost lost, you can still trade the market without being one of the silly HODLers that invest. It's a traders market, not really an investors IMO.
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Yep, silly silly HODLers:

BTCUSD_2024-12-13_20-22-03.png
 
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Germane anecdote:
Cryptocurrency exchanges in Europe are preparing to delist locally noncompliant stablecoins as European crypto regulations near an enforcement deadline.

Coinbase Europe, Coinbase Germany and Coinbase Custody International will delist Tether’s USDt (USDT) and five other stablecoins on Dec. 13, Coinbase told Cointelegraph on Thursday.

“Based on the latest information, we currently expect we will have to restrict services for the following assets: USDT, PAX, PYUSD, GUSD, GYEN, and DAI,” Coinbase said, referring to the coins as assets restricted by Europe’s Markets in Crypto-Assets Regulation (MiCA).

Coinbase will continue supporting USD Coin (USDC) and the euro-pegged EURC (EURC) stablecoin, jointly operated by Coinbase and the US crypto company Circle.
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https://www.msn.com/en-us/money/mar...ether-s-usdt-stablecoin-in-europe/ar-AA1vKdP8
 
Ripple is launching a new RLUSD stablecoin.

Ripple CEO Brad Garlinghouse announced on Tuesday that the RLUSD stablecoin, a cryptocurrency designed to maintain a steady value in line with the U.S. dollar, has been approved by the New York Department of Financial Services. While stablecoins can operate without this approval, Ripple sought to be added to New York’s “greenlist” to gain credibility as a compliance-first company and access the New York market, ensuring that the coin complies with the state’s regulatory standards.
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Ripple has promised that the stablecoin will be 100% backed by U.S. dollar deposits, short-term U.S. treasuries and other cash equivalents. Bautista says Ripple holds large monetary reserves, including 80 billion XRP allocated to the company in 2012, that will make it easier for the company to deliver on this promise.
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https://www.msn.com/en-us/money/oth...usd-stablecoin-prepares-to-launch/ar-AA1vGZby

So if this is well regulated, I'm guessing they won't be able to claim their XRP holdings as a cash equivalent backing for RLUSD? Will they be forced to dump/sell XRP to raise cash for RLUSD? I will laugh (on the inside) at the XRP pumpers on X if Ripple dumps XRP on them.

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I believe that Bitcoin is vulnerable to an existential risk in the security model.
What to know:
  • Crypto miners are embracing MicroStrategy's bitcoin acquisition strategy, due to pressure on profitability, the bank said.
  • Miners are increasingly financing their businesses via debt and equity offerings rather than selling their crypto reserves.
  • JPMorgan noted that the introduction of spot bitcoin ETFs in the U.S. has given institutional investors a more direct way of gaining bitcoin exposure than owning shares of mining companies.
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https://www.coindesk.com/markets/20...uisition-strategy-as-micro-strategy-jp-morgan

Miners sustaining their cash flow with debt predicated upon the USD price of BTC. If BTC price goes down (sustained bear market action - not flash crash that quickly corrects), miners could implode and the network could be at risk. There could also be a liquidity issue if all the miners are forced to sell all at once (more or less).
 
pmbug said:
I believe that Bitcoin is vulnerable to an existential risk in the security model.

Miners sustaining their cash flow with debt predicated upon the USD price of BTC. If BTC price goes down (sustained bear market action - not flash crash that quickly corrects), miners could implode and the network could be at risk. There could also be a liquidity issue if all the miners are forced to sell all at once (more or less).
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Nah.

Publicly traded BTC mining companies currently own 0.4%* of the total BTC of 21 million tokens that will eventually be mined (about 94% has been mined). The market would easily be able to absorb those BTC that are forced sales without causing any significant downward pressure on the price should any company need to liquidate its holdings.

* https://treasuries.bitbo.io/miners/

There are plenty of alternatives to these publicly listed companies that mine more BTC than any of those companies so the collapse of one, two or all would not put the network at risk, and in fact would make mining easier and therefore more profitable as there would be less competition for rewards.
 
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Which is a bit of a surprise coz "the word" was that it wasn't likely to happen. So short term who knows? Could be a sell the news event. Long term it's bullish as it's inclusion in ETFs will attract buying .

It's still well below the ATH.
 
And just like a B Grade movie crashing in on itself...

A London judge has sentenced an Australian man who claims to have invented Bitcoin to 12 months in prison, suspended for two years, over his decision to launch a US$1.2 trillion ($1.92 trillion) lawsuit.

Computer scientist Craig Wright claimed to have been the author of a 2008 paper considered to be the foundational text of Bitcoin, published under the pseudonym "Satoshi Nakamoto."

In a judgement on Thursday, Judge James Mellor said Wright had committed "a clear breach" of a court order in March that barred him from launching or threatening further legal action related to Bitcoin.

Judge Mellor ruled Wright was not the mysterious creator of the digital currency, nor the author of the initial versions of the Bitcoin software.
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https://www.abc.net.au/news/2024-12...nder-claim-contempt-trillion-dollar/104749084
 
mmm....shiney! said:
And just like a B Grade movie crashing in on itself...



https://www.abc.net.au/news/2024-12...nder-claim-contempt-trillion-dollar/104749084
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Sooo...who was it Willy wonka or Peter pan or is a masked pied piper leading unaware followers to the edge of a cliff or to neverland? :confused:Or a land of chocolate streams where tiny slaves sing while they toil? Is it a CIA experiment? :eek: An Oasis in a desert or a concealed trap that drops onto a pit on punji spikes covered in excretement? o_O For holders on not really long time in scale of things been very productive and price in lotta ways has been to the moon with potential to go further, but timing key imo like anything less the rocket loses fuel scared rabbits run and falls like a meteor back to Earth, as they say diamond hands and strong conviction is needed
 
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