Sell most (or all) of your cryptocurrencies now

Discussion in 'Crypto Assets' started by Ghost of Cutten, Dec 5, 2017.

  1. Main reasons:

    1. Tether looks like a classic Ponzi/scam:

    If it is a scam, and exposed/proven as such, the likely response is the shuttering and/or bankruptcy of many exchanges, and a price crash of monumental proportions (as in 50-80% in one day or even 1 hour), followed by months/years of lawsuits, manhunts and so on. It could be even worse than Mt Gox as the market is far bigger, and it would affect exchanges worldwide.

    2. The listing of Bitcoin futures on CBOE/CME shortly, provides a classic 'buy the rumour, sell the news' catalyst, so even if Tether is legit, or not exposed for months/years longer, we are still at/very near to a decent point to book profits.

    3. Obviously, cryptos/Bitcoin have had a gargantuan runup, are hitting the most extreme overbought readings using classic indicators, and basic rebalancing theory shows that it's wise to reduce your exposure to an asset after a huge run to very overbought levels. Value metrics like the NTV ratio, and overbought measures like price to 200MA are in the danger zone now, as they were in early major tops.

    4. Sentiment is at near-euphoric levels. Non-financial media have Bitcoin's run on their front pages now. Bloomberg has a crypto article every single day.

    Factors 2, 3 and 4 would together advise some profit-taking, but the possible Tether scam makes it a 'nuclear' risk environment - you could be trapped in positions, see your exchange get closed overnight, see flash crashes to 1 cent, have multi-hour delays in order executions and so on. The moment the possible scam 'breaks' in the news and is confirmed, normal trading will probably be impossible, as it was in the 1987 crash.

    HODL bulls can still maintain long exposure, but at prudent levels. If your normal risk tolerance is for a 20% loss, cut your holdings to 20% - that way you don't get ruined in the worst case, but you will still get rich(er) if it hits $100k or $1 million in future.

    Reducing exposure has a worst-case downside of still making good money, and a best case of avoiding a horrific crash/bear market. That makes it the smart odds play for anyone with serious exposure to these markets.
    redbaron1981, d08, oddhours and 3 others like this.
  2. Full disclosure: as of now I own no cryptocurrencies or equivalent assets (GBTC, RIOT etc) of any kind.
  3. ET180


    I agree with the author that governments won't target bitcoin, but will instead target the exchanges for tax evasion. Once bitcoin loses it's tax evasion and money laundering benefits, I think the currency will be finished as it holds nothing of intrinsic value and there are new currencies coming out everyday. There's also an issue with energy consumption.
    Clubber Lang likes this.
  4. just21


    Why do you want fiat currencies that are in endless supply? Why is the dollar collapsing against crypto? Maybe this is a 100 year Gann cycle analog.
    German_Hyperinflation (1).jpg
  5. RRY16


    It will end up like the online poker sites, jam a quick amendment into a b.s. homeland security bill and its lights out for U.S. citizens.
    Clubber Lang likes this.
  6. m22au


    Thanks for your thoughts, Ghost of Cutten.
    I'm also interested in Tether (thread here:

    I agree it appears to be a scam, and I have a short position in some cryptocurrency-related stocks, so I would benefit if Bitcoin crashes.
    However I'm not sure how you came to the "likely response is the shuttering and/or bankruptcy of many exchanges, and a price crash of monumental proportions (as in 50-80% in one day or even 1 hour)" conclusion. Can you elaborate on how/why you think this is the likely result?

  7. Overnight


    Do you really think that the events that led up to the chart you keep posting will come to pass again?
  8. Pekelo


    I have to agree, a 50% correction in the next 3 months is long time due... You can always buy back at discount Wednesdays...
  9. ET180


    I know he's a gold salesman, but interesting podcast by Peter Schiff. Commentary on bitcoin starts around 20 mins. I agree with his points.

  10. just21


    There has been massive money printing that has not resulted in consumer price inflation because the way cpi is calculated has been repeatedly changed. calculate inflation the same way as 1980 and get 9.8%. There has been asset price inflation. Look at it the other way round, why is the dollar declining against assets? Everybody keeps calling the top in crypto but it moves 10% higher overnight. When will people say there is hyper inflation in asset prices?
    #10     Dec 6, 2017