It's been a crazy year, but as we've learned in the crypto space - anything is possible. A random thought that occurred to me recently when I heard that $2.5 billion is currently stored in stable coins I couldn't help but think of some possibilities of how things could go very wrong for people watching from the sidelines and maybe not paying as much attention.
Let's assume that the billionaires are entering the market, as @theycallmedan mentioned recently "when millionaires buy up a coin it pumps, when billionaires buy up coins they push the prices down". After tether we saw many new stablecoins make an appearance, most of them way too late into the bear cycle but still, they exist now, if you had any issues or distrust with tether you can rely on other stablecoins instead. Say now that you don't know where the price is heading, Bitoin could drop to 3k, it could drop to 2k, 1k or even less? Who knows, it's highly unlikely it will drop under 1k but it awas also highly unlikely it would drop under 6k for many. So over time more and more people are trading their coins over to stablecoins, maybe after a while it becomes a bigger amount you'd want to keep on an exchange so you withdraw them onto your wallets.
Many of us know that when people look at coinmarketcap and assume that's what Bitcoin is worth right now we forget that what it shows there for a short period may not always reflect on the value of something. Many bigger investors do not want to use exchanges that we use, so they may be waiting on more institutional ways to enter the market and who knows maybe these institutions have constantly been buying OTC. What we have noticed, though, is that not a lot of $ is required to move the prices up by a lot. What we don't know is if the prices really are being kept low on purpose by people with more money than we can imagine due to the finite supply of crypto and this being the one way they can accumulate more while shaking out the uncertain investors.
Imagine for a second, that this new investors, billionaires if you like, may have been accumulating all the way from $20k. Do you think they will be alright with taking profits once Bitcoin goes back to $20k? Or will they aim for higher considering the history of Bitcoin and the returns it has given investors in the other cycles? We've all seen how quick Bitcoin has been able to go to astronomical heights in the past, how will stable coins affect it this time around? If there's 2.5 billion right now waiting on the sidelines to enter the market at first glimpse of a bull run.
Now what if the stablecoins are the distraction. What if they are pressuring people to either sell for stablecoins thinking they will be able to buy back later or for fiat and go through the bothersome process of filing taxes, etc. I'm not suggesting that this is what they are doing, and please never invest anything according to my thoughts or borderline conspiracy theories. For all we know stablecoins could also be the thing we have needed all along to keep crypto investors safe from additional taxes while keeping the value they've earned in the past safe until the next cycle.
Considering crypto can always be full of surprises, it would not surprise me, though, if the next bull run will be a flash pump leaving the evergrowing holdings of stablecoins without Bitcoin and other crypto. If that's not the case and it will instead repeat itself like before, we can at least look forward to bigger swings as more and more value will be at play from experiences traders that have taken part in the last few cycles.
Although times are quite tough right now, make sure to prepare some popcorn for the future as things are gonna get wild. :)
[image source: pexels.com]
Lets say I had a few hundred million dollars that I wanted to buy crypto with. If I bought it all at once, or with a few large buys, it would drive up the price of whatever cryptos I chose to buy, or at the very least, hold them up.
But that's stupid money.
When you have that kind of money, you don't just go to an exchange, you have a group of people intelligently buy crypto for you, at the lowest price possible, and a group trade a portion of it to lower the overall price, and increase the amount you have, all the while carefully buying more and more, and increasing your amount of crypto for trading and holding. For that much money, you could have your own personal team of buyers and traders. Even if you were stuck with traditional trading platforms like Binance, you can buy hundreds of thousands of dollars of crypto at every point where it hits the lower line of the bollinger bands, and then sell portions above them to buy lower.
Any Forex trader, with a bit of practice, can trade crypto, so it's not like you couldn't get capable traders from Wallstreet.
So, yeah, if a billionaire wants to invest in crypto, they can easily buy millions in crypto, even in just a few days if they want, and not affect the market. Someone that doesn't know how to trade can spike the market, or someone that carefully makes their buys can cause the price to go up, but they don't have to. There are likely tons of people that have bought millions in crypto as it's been going down. There may have been even billionaires that have made huge investments in crypto. Technically, they could get a huge portion of the market, and they don't even necessarily need to drive it up while doing so, because they would likely sell portions back with every spike and move up, and then just get more lower.
But when you have stupid money, you can have your buyers working on Bitrex, Binance, etc, as well as Local Bitcoins, etc, and OTC, and through private sales, etc, etc, etc. This huge group of places to buy from means that it's even easier to not effect the price while you are making huge buys.
You could probably have a team buying for you and pay for them with just the profits from the buying and trading they're doing, and still end up with way more money than you started with, without doing anything yourself.
Tether and trueUSD and those coins may seem like the enemy but they are the most liquid things out there when it comes to pumping crypto. Traders definitely going to trade.
Also saw a neat article linked saying normies have to panic sell to make money for day to day expenses. "Billionaire investors and large-scale institutions, in contrast, have the luxury to hold and sustain their portfolios." So the rich are gonna HODL!
I am definitely looking forward to popcorn time.
I think stablecoins could help adoption as it could provide a great gateway for merchants to accept a variety of crypto and immediately exchange for stablecoins for their day to day fiat expenses. It could lead to wider adoption as more participants understand the concepts of blockchain and wallets as interface improves.
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Yeah, I am still a bit careful with one of them in particular.
Things are going to get wild indeed. The big boys definitely pushed it under 6k which was no surprise to engage forces selling and I am guessing a lot of banks were soaking up crypto on this latest push down IMO
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I honestly can't wait to witness the next bull run. Yes it took a long time, might still take a long time, but it will be worth the wait. Ohhhh the chocolate bars I'll be able to buy... ;-)
Whatever manipulating that is going on right now in the crypto space, am still hodling anyway.
I don't see anything sinister about stablecoins, but all your other "what if" statements I consider to be "of course" statements.
May as well hodl unless you sold the farm and invested at the markets height...............
Before join steemit.... I always goto many crypto meetup to learn. But, Now I just read and search steemit post and fellow some steemit blogger, I already know the update news , information and opinion.
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