The blockchain-based cryptocurrency business is certainly a wild roller-coaster ride for anyone who has participated at any point since its inception and infiltration into the mainstream consumer’s digital consciousness. My views on the cryptophant community are not defamation or advisement to avoid crypto since I have no qualms with speculative investing among the multitude of financial opportunities that are available to well-informed investors and seasoned traders.
The Biggest Fraud in History… “Bitcoin (BTC) still has no use case except for gambling by speculators or the conduct of transactions by terrorists, tax evaders, scam artists and other denizens of the dark web… The infrastructure has been plagued with hacking, fraud, bankruptcy, and coin theft measured in the billions of dollars. Bitcoin may go higher from here; it is entirely possible. But it will then come crashing down again.” – Jim Rickards, May 2019
Unfortunately, the initial reasoning for buying into crypto was marketed with grandiose promises of a decentralized, non-fiat, anonymous currency that was reimagined money restricted to a limited number of bytes or “coins” (tokens) to hungry souls seeking yield and a safe haven. Crypto was and is still compared to precious metal possession, which has no counterparty risk, but with images of fictitious gold- and silver-colored coins embossed with the latest cryptocurrency name and logo. All of the above inevitably attracted misinformed get-rich-quick wannabes, fiat cryptocurrencies that multiplied like rabbits, hyped FOMO sales pitches masked as investor conventions, hordes of naïve investors that were encouraged to be HODLers, and inexperienced folks without a basic knowledge of how to trade. Automated, autonomous, algorithm-driven trading platforms dominate the flow of capital within all market sectors that can wipe you out.
Here’s a video I provided on numerous occasions within my Bitcoin technical analysis series (archive). That project ended in 1Q21 after Bitcoin’s price action printed an overbought spike above $60k. I suggested then to take any profit and run before a plunge. There’s always another opportunity out there if you look.
High-Speed Trading (HFT) Platforms Dominate Bitcoin – Bloomberg, Jun. 2017
Crypto is not decentralized.
“In our view, BTC is currently a darling for tech-oriented get rich quick speculators, led by some savvy players who know how to manipulate a market. That doesn’t invalidate it, just some of the memes used to promote it. Less than 2% of BTC accounts hold more than 95% of all BTC. We hear that BTC ownership is becoming increasingly concentrated on the way up. That sounds likely. At some point, it will go from accumulation to distribution and then we will see how real the BTC market really is.” – Seabridge Gold, Jan. 2021
Crypto isn’t decentralized… “Flick points to a glaring disconnect. One of the key tenets of crypto is that it’s ‘decentralized,’ as in no single person, company, or government is in control. But that may just be a ruse, as ‘we’ve seen the recentralization of so much of the theoretically decentralized stuff,’ she said. For example, Yuga Labs, the team behind Bored Ape Yacht Club, acquired the wildly popular NFT collection CryptoPunks as well as Meebits from Larva Labs. That means the group now owns two of the most valuable NFT projects on the market… ‘The people who win are the people who got in early, which is probably not going to be you. And the people who lose are going to be the people who are left holding the bag.’” – Markets Insider, Mar. 2022
Crypto is not anonymous.
Inside the Bitcoin Bust That Took Down the Web’s Biggest Child Abuse Site… “They thought their payments were untraceable. They couldn’t have been more wrong. The untold story of the case that shredded the myth of Bitcoin’s anonymity.” – Wired, Apr. 2022
Crypto Is Not Private Or Anonymous: Here Are The IRS Weapons To Track Crypto Holdings And Activity… “Anonymity is one of the reasons many crypto enthusiasts say they favor digital assets but it turns out crypto is not private or anonymous — just ask the Internal Revenue Service. The tax agency is tracking your crypto holdings and activities. Most federal law enforcement agencies employ experts adept at tracing cryptocurrency, and they’re using sophisticated software to harness big data and link transactions to people.” – The Moguldom Nation, May 2022
SEC charges eight celebrities including Lindsay Lohan and Jake Paul with ‘illegally touting’ crypto currency and failing to disclose what they were paid… “With the exception of Soulja Boy and Mahone, the celebrities agreed to pay a total of more than $400,000 to settle the charges, without admitting or denying the SEC’s findings. The eight were charged alongside Chinese crypto baron Justin Sun who, as well as paying the stars, allegedly artificially inflated the price of the coins they were touting through a fraudulent practice known as ‘trade washing.’” – UK Daily Mail, Mar. 2023
The Crypto Detectives Are Cleaning Up… “To early advocates, crypto was appealing because it promised the secrecy and anonymity of cash… That secrecy was an illusion. Crypto transactions are inscribed on a publicly viewable ledger called a blockchain… A growing industry is dedicated to deciphering them… At the center is the New York analytics start-up Chainalysis — a team of blockchain analysts that helps the government track crypto transactions… After the FTX exchange imploded, its bankruptcy lawyers hired Chainalysis to disentangle the web of entities at the center of Sam Bankman-Fried’s empire and track the $400 million in crypto that a hacker stole from FTX’s accounts… The government’s access to such tools has alarmed old-school crypto advocates. ‘Bitcoin could be the worst surveillance nightmare that we’ve ever imagined — a world where everyone uses Bitcoin, but everybody’s transaction history is totally public and everyone knows how much money everyone has,’ said Max Hillebrand, the chief executive of zkSNACKs, the company behind Wasabi Wallet. ‘That’s not a world I’d be comfortable living in.’” – DNYUZ, Apr. 2023
How Investigators Cracked a $3.4 Billion Crypto Heist and Bitcoin’s Anonymity… “Federal authorities are making arrests and seizing funds with the help of new tools to identify criminals through cryptocurrency transactions.” – WSJ Audio Interview, Apr. 12
Crypto is not a safe haven and is wrought with counterparty risk.
Bitcoin, Crypto Billionaires Lost $110 Billion In Past Year… “Some of the biggest losers of all, these billionaires lost over 75% of their wealth in just 12 months. Why it could get even worse as U.S. regulators and prosecutors take aim… Crypto market contagion, which began last summer with the blowup of hedge fund Three Arrows Capital and culminated in FTX’s implosion in November, sparked a sprawling U.S. regulatory crackdown, led by SEC Commissioner Gary Gensler and U.S. prosecutors, that has spooked investors and left no crypto billionaire unscathed.” – Forbes, Apr. 2023
‘Crypto Is Dead In America’—Early Bitcoin Investor Issues Stark Coinbase Warning Amid Price Chaos… “The bitcoin price, despite seeing a 2023 rally that some think could be just getting started, is still down by around 60% from its late-2021 all-time highs while Coinbase, the major U.S.-listed crypto exchange, has been hard hit by violent bitcoin and crypto price swings… Venture capitalist Chamath Palihapitiya, an early bitcoin investor who claims to have first bought bitcoin in 2010, has declared ‘crypto is dead in America’ — warning regulators are coming for crypto companies like Coinbase.” – Forbes, Apr. 24
Crypto’s Anti-Establishment Zeal Runs Headfirst Into Bankruptcy Bureaucracy… “Angry retail investors are speaking up in complex legal brawls over the remains of Voyager, Celsius and BlockFi… A certain breed of retail investors piled their money into crypto for its anti-establishment qualities. Avoiding big banks or hidebound regulators sweetened the taste of uncanny returns. Crypto firms stoked that sentiment, pulling in investor money by promising a world of ‘unparalleled economic freedom,’… But now millions of crypto fans—and their money—find themselves trapped in a different kind of reality. Companies they trusted with their cryptocurrency have failed, and their assets are stuck in bankruptcy court… Many crypto investors didn’t realize the money and digital coins on digital lending platforms are often treated like traditional bank deposits. Instead of holding depositor dollars for safekeeping, the bank takes the money, pools it with everybody else’s cash and then lends it out or invests it in some other way. There’s one big difference: If a bank fails and there isn’t enough money to repay everybody’s deposits, customers are protected up to limits set by the Federal Deposit Insurance Corp. Crypto deposits aren’t protected.” – Bloomberg, Apr. 25
Welcome to big brother cashless tyranny (1996 NSA Whitepaper) within Central Bank Digital Currencies (CBDCs). All cryptophants who invested or traded in crypto funded the initial blockchain technology, crypto brokerage firms and banks, and infrastructure build-out tweaks that freely provided the legwork for a government “CBDC Panopticon Prison Via the Fugazzi Crypto Bust,” published in Nov. 2022.
Biden administration is quietly planning for a future where you don’t own money… “In Biden’s future, you will not own CBDC money, and you’ll have no privacy either… The White House and the Federal Reserve have started to lay the groundwork for a programmable, trackable, easily manipulated digital currency. It might sound like something from a dystopian science-fiction novel, but it’s all too real, and it could soon change life in America forever… A CBDC would be digital and programmable, rules could be imposed that limit spending on approved activities. So, if the federal government or Federal Reserve were to determine that Americans are buying too much gasoline, for example, it could stop people from using CBDCs at gas stations with a few clicks on a computer… There’s no scenario in which you would be able to store your digital money in a local hard drive or private storage account. All of your money would be kept by a bank or the Federal Reserve directly, which means they would own all of your CBDC money.” – Fox News, Apr. 2023
The gold and silver bullion coin at my desk will not disappear, is a store of value against fiat currency debasement, can be used for barter transactions, anonymous, will pay for necessities, is not connected to the Internet, does not require electricity, and retains my capital without aggravation. What’s in your wallet?
Takabisha Roller Coaster, Japan
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