Low interest rates and large increases in the (US Dollar) money supply are a reason but not the only reason for Bitcoin's surge in 2017. Noticeably absent is a large increase in the (US Dollar) price of gold, oil and other commodities. Therefore a more reasonable conclusion is that Bitcoin is rising due to Bitcoin-specific factors, rather than fiat currency related reasons. .
Something's gotta give. this simply cant continue. Why not? are electricity prices going through the roof?
Eric Holthaus https://twitter dot com/EricHolthaus/status/938114707160027137 https://grist.org/article/bitcoin-could-cost-us-our-clean-energy-future/ .
Bit (no pun intended) silly. So no more new industries that use energy should be allowed since it might cost us a "clean energy future".
A couple of other points I forgot to mention: Bitfinex hired lawyers to go after critics. This is a classic move of a questionable company, as any short seller knows. Second, if you do a fraud/scam checklist (google for them, there are basic commonalities, that's how Madoff was spotted early by some people), Tether ticks a lot of the boxes. Here's my reasoning: Tether has $800m official supply, and trades 1:1 with USD and other fiat. Its main use is for people to hold it, rather than fiat currency, so they can easily trade in and out of various cryptoassets without the fees and delays (and Know Your Customer/Anti-Money-Laundering issues) of dealing with fiat each time - not to mention, many exchanges don't actually trade fiat/crypto crosses at all. So there is $800m (minimum) out there in Tether balances, lodged at exchanges, supporting customers BTC/crypto positions - in many cases, margined positions - which people think is real. If it turns out to be a scam, and the Tether is worthless or near-worthless, suddenly $800m disappears from the exchanges that trade Tether. If it's a scam, the actual Tether supply could be 2, 5, 10, 50, 100 times that amount, who knows. The likely consequences are: a) every customer using Tether is now a lot poorer, and likely to sell a good chunk of their positions b) every customer using Tether as backing for their crypto positions probably becomes a forced seller by the close of the trading day c) every exchange using Tether immediately loses the total capital balances held in Tether, which will either wipe out their capital, give them a major hit to their capital, or cause everyone to panic about their ability to stay in business d) the largest crypto exchange (by volume) in the world would be tied to a scam, and could close its doors overnight. Imagine if the CME or NYSE shuttered overnight, what would that do to the ES? And those are mature, deep, liquid markets. Bitcoin isn't (yet). If you had any serious $$$ at an exchange who just had many customers get wiped out, who may get wiped out themselves as an exchange, or in the best case are going to see a stampede of selling, customer liquidations, defaults, panic calls from their banks and possible withdrawal of lending facilities, class action lawsuits etc - what would you do? Bear in mind most of these exchanges are fairly small and young, they don't have experienced back-office teams or systems, they aren't used to a crisis/crash, their regulatory and legal teams and knowledge is dicey in many cases. Looking at the history of scams and crashes, a main trigger of crashes is frauds/scams, and what turns them into contagious crashes is the scam triggering execution problems and a crisis of confidence. It's not just the price going down, it's the fact that your funds may not be safe, or that others may sell at any price because their funds are lost and/or unsafe; or that even if they are safe, you are stuck in your positions and can't execute because of the panic of others. Also, we've seen this before in the runaway markets and then crashes in prior Bitcoin booms: 2011, 2013, 2014. One day crashes of 60% have happened before, *without* a >$1bn scam hitting numerous exchanges worldwide. Mt Gox was just 1 exchange and the hack was half a billion, and that had a bad impact. Combine this with just being listed on CBOE and CME, with lots of novice retail investors coming late to the Bitcoin party, and it's a recipe for disaster. Now maybe I'm wrong and Tether is legit and just has a bad PR team (or none at all). But the number one issue in any trade or investment is preservation of capital, and an environment like the present with a scam coming out would make that impossible due to the sudden nature of news, the uncertainty surrounding scams, and the rapid nature of crashes - especially cryptoasset crashes (just look at the daily and intraday charts for prior BTC crashes, let alone the altcoins). I therefore think it's wise to cut risk to prudent levels now, even though the trend is up and momentum/interest strong and it's probably leaving some profit on the table. It's like February 2000 - maybe you ride it to the top then sell, but probably you don't get out in time and get hosed in the crash like Druckenmiller did. And there was no fraud on this scale at the top in 2000. Bear in mind we also have some big players now like the Winklevosses with $1bn in BTC, Mike Novogratz with a big chunk and planning to launch a crypto hedge fund soon. The liquidity just isn't there to absorb that size of selling if and when the trend turns, so it is quite likely to be something like Silver Thursday 1980 with the Hunts losing 80% in Anyone who wants to maintain a diehard long position, IMO make sure it's within your pain threshold and keep it safe in off-exchange cold storage on good hardware wallets. Anyway this is just a post so people who read it have their eyes open to the risk, I have 'no view' on direction and if it was a more secure asset I may well be long some with a trailing stop, I have been bullish on cryptos before. But a stop needs liquidity and smooth trading without massive gaps to be a viable risk control measure, and I don't think those conditions are by any means assured in the coming weeks. About playing it - I would wait until the news breaks, or buy long-term deep out the money puts on listed crypto stocks, and then short them when the news comes out. If it occurs I doubt it will be an instant gap then go sideways/up, more likely those crypto plays will go down for 2-5 days or more. Waiting for the news keeps your risk minimal, this is a runaway bull market and as we learned from housing in 2005-06, commodities in 2008, dotcoms in Q1 2000, runaway markets are a bad short even if you can be 100% sure they'll eventually collapse, and we don't know that for sure here.
For a warning/catalyst, one option is to set an alert on the Tether price: if it starts to fall significantly below 1:1 with the fiat cross, that is a sign that the market is losing confidence in it. If it falls a lot below (e.g. 5-10%+), on high volume, and doesn't recover fast, that would indicate large-size liquidation, which would imply it's about to blow up. This could give you a bit of warning of a potential spillover into the other cryptoassets, although it's playing with fire to wait that long IMO. As we've seen before, not all apparent scams are scams; some scams go for years before being busted. A sensible precaution against credit risk, even for super-bulls, would be to avoid holding any meaningful cash or crypto at exchanges which list Tether for trading.
Don't want an argument. But I would say it is an argument - if someone is promoting FUD for whatever reason, then that works against the strong case for their position, ie - it's got some subjective bias. Not an absolute disproof by any means, but a grain of salt.