That's how business is done at the top.
Not this pathetic sky-is-falling panic FUD.
People are already running around saying Michael Saylor's position is going to get liquidated. Yeah, that's not how his loan is set up. He's already stated that Bitcoin could go all the way down to $4k and he'd still hold. This is a ten year+ long position, not some swing trade that people get to comment on like they know what they are talking about. At the end of the day people are just angry at themselves and they take zero responsibility and try to blame it on a billionaire. Classic people.
Has a nice ring to it, yeah?
A MILLION!
Frame it as 0.01 BTC and all of a sudden people get sad and think it's not a lot of Bitcoin. Those two numbers are the exact same amount. The unit-bias is real.
I went extremely long yesterday at the $30.5k price point and I have thus-far not been disappointed. Of course it does not matter what the price is today or tomorrow or the next; what matters is what the price is on the day that I close the position. Ask again in three weeks and we'll find out if I made a smart move.
As far as longs go, I've never been more confident about such an extreme gamble as the one I just made. If you told me a couple years ago that I'd be borrowing tens of thousands of dollars to buy Bitcoin at $30k? LOL, absurd. Don't forget that it wasn't that long ago that Bitcoin was $10k, and 7 months before that $4k. Still, the doubling curve is strong, and the $30k support line is strong on top of it. The panic yesterday was a thing of beauty. I've been waiting for two years for a day like that to go long. Glad I finally waited it out until now.
The LUNA network got destroyed yesterday with a 50% flash crash. That's what happens when your stable coin has a higher market cap than the thing you collateralized it with. UST is pegged to LUNA in a similar way that HBD is pegged to Hive. However, Hive's ratio to HBD is less than 10:1, while UST's ratio is worse than 1:1 at the moment.
Also, UST's haircut is completely different than Hive's. Hive will issue less HBD if the ratio is too high (10% to be increased to 30%). UST's haircut is just a daily limit on how many can be minted, which is good for stable-coin holders but not great for maintaining the price of LUNA. Yesterday after LUNA crashed 50% within hours UST crashed 30% to 70 cents. Not a good look for a stable coin.
Also there was over a billion dollars in BTC collateralizing UST. That BTC was transferred to the exchanges and was probably the reason why we dipped all the way to $30k and slightly below. The market is scrambling. When it rains it pours.
And now people are talking about USDT again as if the same thing could happen here as happened to UST. This shows a fundamental lack of understanding as to how this actually works. I am constantly flabbergasted that speculators continue to conflate the issue and have provably no idea what the hell they are talking about.
In what magical fairytale land is it possible that Bitfinex can print Tether and then dump it on the market to get free Bitcoin without crashing the price of Tether? In what fantasy realm is this not the exact thing that crashed UST in the first place? Constantly people show time and time again that they don't understand how basic liquidity works.
And at this point it doesn't even matter. Bitfinex has been accused of longing Bitcoin. They've been accused of holding Bitcoin as collateral for USDT instead of USD. Do these not people not realize that they accused Bitfinex of longing Bitcoin at $4k and $6k and $10k? Even if they are right, they are wrong. If Bitfinex longed Bitcoin at $4k then obviously they have more than enough collateral to maintain the USDT peg.
The easiest way to peg a stable coin to USD is to hold USD... obviously. But that's also not the only way to do it. If you long Bitcoin at $4k and then Bitcoin goes 10x then you only have to sell 10% of your long to get all the USD back and go back to maintaining the peg.
UST and the Luna ecosystem were holding zero USD and zero stable coins. Crypto is already volatile. By using a volatile asset to peg a stable token... well that just makes it more volatile (in both directions). If you don't have the stones to hold a volatile asset: then get out of crypto. It's as simple as that. What goes up must come down. Stop thinking all these exponential gains are locked in and that a crash is unthinkable. That's childish thinking. Don't trade these markets like a child. It's like taking candy from a baby.
Which is exactly why I went long yesterday, and then doubled down on the long. I didn't double down until I saw that literally every single person thought that me going long was a bad idea. LOL, best long signal ever.
Michael Saylor is doing just fine. El Salvador bought 500 more BTC. Countries in Africa are moving in as well. To think that Bitcoin will continue crashing even though we are at the foothills of mainstream adoption? Absurd. Sure, a looming recession is terrifying. Not financial advice. Blah blah blah.
At the end of the day we need to come up with a better idea for pegging stability than relying on dumping at the bottom to maintain these stable coins. I've already come up with several ideas on that front, but truly I'm tired of talking about them and perhaps even a bit depressed that I haven't built them yet. But you know what they say: bear markets are for building.
