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Trolly🐴 McTrollface 🌷🥀💩

2 May, 11 tweets, 3 min read

It looks like the majority of crypto is OK now with USDTs being backed by crypto and not something tangible.
The emerging consensus is "USDTs are so well collateralised after the bull run that there's zero risk. And, if Bitcoin falls, they can always print and pump it back up."

The minority of insiders see the writing on the wall, and are playing along while frantically trying to cash out behind the scenes (example: Coinbase).
But the majority actually believe this nonsense, and are confidently displaying their utter lack of understanding of finance.

The price of crypto today isn't priced in USD, it's priced in USDT, because nobody's trying to cash out into the real world. It 's true that USDTs are overcollateralised today.
However, if more than a few people try to cash out in USD, crypto will start being priced in USD.

That's a wholly different story. There isn't an infinite USD printer that's ready to buy every dip. The only demand in USD terms is speculative - people buy crypto in hopes it will continue to go up. But the selling in USD terms is fundamental - miners need to pay their bills.

Real money buying comes and goes, while real money selling is always there. Crypto assets are priced in USDT, but crypto liabilities are priced in USD. A lot of liabilities have been extended into the future - for example, miners take out loans instead of selling their rewards.

This distorts the true state of things - liabilities pile up off balance sheet, while the assets are put on display, and the ecosystem looks well collateralised. In reality, it's insolvent. Tether pumping up prices has made things look better, while the real situation got worse.

The crypto industry is piling on USD debt, showing creditors all its crypto wealth, at prices quoted in USDT, telling them "we're so rich". In reality, it can barely pay the USD interest on its growing USD debt, scraping together the meagre sat stacking cents of clueless suckers.

When the daily inflows of real money are no longer enough to pay interest on USD debt, and crypto insiders try to cash out some of their "assets" for USD, then crypto will start being priced in USD, and it will reveal a wholly different picture. Crypto has no fundamental value.

You can't go and see Warren Buffett or Microsoft or Amazon and tell them, "look buddy, this is a great portfolio of productive assets, can you lend me some money against it, I'm going through a rough patch right now?"
Crypto "assets" are worthless. Literally worth zero dollars.

Tether is a rehypotecation scheme with the value of underlying assets being grossly inflated. It's not revolutionary. It's the oldest trick in the investment fraud book, going back centuries. The last time this happened, it was called the subprime bubble. Caveat emptor, bitches.

There are hundreds of news pieces about miners taking out loans. There are literally new businesses who specialise in lending to Bitcoin miners - to give you an idea of how mainstream a practice this has become.
coindesk.com/babel-finance-…

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More from @Tr0llyTr0llFace

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

2 May

I know Tether and Bitcoin are hard to understand for people who haven't spent 10 years looking at fraud in the face. Here's a more down-to-earth explanation.
Imagine Bitcoin is houses in the desert. The promoter advertised the spot as the New New York, where all the hedge funds

and the banks and the really important people will want to be. A lot of people bought in, but the vision never became real - hedge funds and banks stayed in New York. Nonetheless, the price of the houses rose for some reason.
As the price rose, more people bought in, ignoring the

fact that the promoter's vision didn't materialise. Surely there are other reasons for why the price is going up, other very important corporations who will want to set camp there.
Seeing prices go up, the promoter built more houses. People snapped them up as well.

Read 15 tweets

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

18 Mar

Anyone who claims that Bitcoin can be a "global settlement layer" doesn't understand Bitcoin.
As is, Bitcoin can be "hacked" by someone who controls a lot of hashpower; by "hacked" I mean that person could cancel the transactions he wants, provided that they're not too old.

This is known as a "51% attack", and the principle is that you perform a big transaction (wire 10,000 BTC to an exchange, sell them & cash out), and use your own hashpower to build an alternative string of blocks, starting with the one containing the block with your transaction.

Once you've cashed out your transaction, you start propagating the blocks you've calculated in secret. If your string of blocks is longer than the string of blocks that has been produced organically by the network in the time it took you to cash out, your "hack" was successful.

Read 11 tweets

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

15 Mar

Chainalysis is doing a tremendous job in convincing everyone crypto isn't being used by criminals.
Their "less than 1% of crypto transactions are criminal" claim has been relayed thousands of times in the crypto & mainstream media.
Of course, this claim is weapons-grade bullshit.

First, their numbers are based on "proprietary methodology". You basically need to trust a company 100% focused on crypto that crypto is legit.
Second, when they say that "x% of transfers are criminal", what they actually mean is "we managed to flag x% of transfers as criminal".

Chainalysis doesn't say what total percentage of transfers they manage to classify. So if they flag 1% as criminal but only manage to classify 2% of all transfers, that's really, really bad.
As a point of reference, in 2019 they classified $20B of transfers as "criminal" - ...

Read 4 tweets

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

10 Mar

A lot of people, some of them extremely smart and knowledgeable in fields other than finance, believe that there isn’t much difference between Bitcoin and stocks or any other financial asset as an investment because “you need someone to buy it from you” in both cases. A thread.

When you buy a stock, the reasoning goes, you do it because you expect you’ll sell it to someone else at a higher price. It’s exactly the same as for Bitcoin. Hence, it’s the same game, right?
Obviously not.
A stock is a share of ownership of a company. This company has assets.

This company has people working hard to generate profits that compound to its assets. Think of your stocks as a claim on a percentage of a bag in which the company’s employees are putting the money they earned for the company every quarter. The bag gets bigger and more valuable.

Read 11 tweets

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

9 Mar

I woke up early this morning & stumbled upon Seetee's "letter to shareholders" and oh boy is it an alphabet soup of nonsensical Bitcoin memes.
To quote Wolfgang Pauli, "it's not even wrong"
I guess Nic Carter must have had a strong influence over whoever wrote it.
Let's dive in.

TL;DR: "I've watched Bitcoin go up tenfold in a year and that gave me confidence that it's very valuable so I jumped in".
Of the 19 advisors that were consulted, only one, Mike Green, is a critic, and also the only one who understands finance and doesn't have a vested interest.

Let's start with the "Bitcoin is like the early Internet" meme. The letter references Tim Berners Lee - maybe they should have talked to him. Since Tim said 6 years ago that Bitcoin was getting ahead of itself, the number of daily transactions has barely gone up threefold.

Read 20 tweets

Trolly🐴 McTrollface 🌷🥀💩

@Tr0llyTr0llFace

8 Mar

The meme of Bitcoin as a hedge against inflation and central bank money printing is stupid and perfectly tailored to stick in the brains of financially illiterate bagholders.
First, it seems intuitive that inflation should push Bitcoin up, as everything goes up with inflation.

Except Bitcoin isn't bacon or milk, it's a financial construct. Not all assets go up with inflation. Bonds go down with inflation as interest rates rise. Stocks can go down with inflation if input costs exceed the company's pricing power.
Bitcoin's input costs would rise.

Bitcoin costs money to exist - it needs ASICs and electricity, and those will definitely go up with inflation. Of course miners are free to reduce the hash power to counter-balance that, but then the security of the network will decline, so how is that good for the price?

Read 8 tweets

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