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DK

3 Jul, 9 tweets, 5 min read

Thoughts on $BTC (and basically all of #crypto)

There are clear signs we will rally & bottom is in:
- negative news being absorbed, price no longer crashes
- difficulty low, mining profitable, less centralized & greener than in May
- Leverage premium negative for $ETH & $BTC

- #tether premium is negative
- funding has been consistently negative
- Futures are flat/small contango

Basically there is little enthusiasm about #bitcoin price and sellers are exhausted. The market is without direction but squeezing up is easier than squeezing down.

Unfortunately there is a second side to this:
- it’s obvious global regulators are finally (slowly) aligning on bringing down #binance & #tether. This could take time and may not end in an extinction of both, but it very well could. That is the mother of all black swans.

- regulators will increase AML/KYC burden on CEX & DEX w/ known team members. That’s a positive to me (I do not care for money launderers much), but it will no doubt provide negative headlines.
- high #YieldFarming APYs have moved up the risk curve
- The Fed will reduce liquidity

Overall, I’d argue we are in the fundamentally most promising situation for a long time & the utility of protocols like #solana, the advent of decentralized equity (governance token), as well the #ethereum #Defi ecosystem will truly shine & bring a lot more $ into #crypto…

… Even #bitcoin looks like it might gain some #DeFI utility.

At the same time, the disruption risk to be discounted for $USDT implosion & regulatory crackdowns has never been higher. There is truly a huge “wall of worry” for markets to climb it they wish to.

Personally I position for this market by being long spot, holding larger short term levered long positions on numerous #altcoins & #bitcoin, while retaining c 35% in cash.

Additionally I hedge using OTM put options on $BTC & $USDT shorts in the size of my $BTC holdings.

It’s not perfect and actively trading the levered positions is very time consuming but it reflects my view that #crypto markets are attractive but carry the highest black swan risk of all time.

This is not advice. You’re in charge of your own decisions.

I should add that, because of the regulatory risk associated with anything #binance I have moved any funds I had on #bsc off that chain as well. I have no interest in being there when there is an issue.

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More from @dkcrypto13

DK

@dkcrypto13

18 Jun

I couldn’t sleep before I researched this further.

Let’s put to rest the assertion that $USDC is just the new $USDT and just as sketchy at #tether because the monthly attestations by a Top auditor aren’t full audits. This can all be wrong, but think for yourselves:

@circlepay

For every month, without fail, Grant Thornton attests that the USD held by @circlepay for $USDC match the token in circulation. This report is not, as with #tether, an irregular, unclear document. It is very clear.

Check the screenshots.

You got an auditor saying “we attest that we have seen the cash or approved investments” in the value of outstanding token every month (!).

Note that auditor liability increases with value, so yes the 2021 reports have been later in general than in 2020, but that is to be…

Read 11 tweets

DK

@dkcrypto13

5 Jun

So a word to the #crypto skeptics and #tether truthers around:

I think it is good to be skeptical and there is literally no person with a brain in the entire industry who truly thinks that $USDT was not used to manipulate prices in 2017 or that it is backed with cash.

Everyone knows it is the biggest tail risk in this space and most people would probably rather it disappears.

However, recently more than before, I notice you guys are taking the high moral ground but you use the exact same “scam” tactics for your own arguments. You repost

articles without fact checking because they fit your bias, then ignore corrections, you don’t care about any use of #crypto because it seems you cannot stand the thought of it not all going to zero. Everything is a scam & everyone a scammer. You may not feel that way,

Read 17 tweets

DK

@dkcrypto13

23 May

#Tether is an unregistered, unsecured debt security.

What does that mean?

"Unregistered debt security": 1 $USDT is a promise by Tether Inc to pay you back $1 should you request it back without interest. It is, funnily enough, not unlike commerical paper.

The way that it was sold (ie promising audits that never came, pretending the assets that "back" it sit in a bank account and playing as if you had any legal claims to those assets) make it a debt security in my view and it should have had a proper prospectus.

"Unsecured": There are no assets that legally back up 1 $USDT. ZERO. You have a company that has no contract with you. They say "we will always 'peg' it to 1 $". They do not explain what this peg means. It is just an internal accounting procedure and you have to take their word.

Read 11 tweets

DK

@dkcrypto13

20 May

Just wanted to make sure you are all aware of the things that could happen to #bitcoin, so you do not need to panic dump on every headline re $BTC:
- #tether could turn out to be an unregistered security, backed by unregistered securities
- tax authorities might add a carbon tax

- more and more countries will outlaw #crypto mining
- the blockchain is a fully tansparent ledger, so as crystal, chainalysis and other ramp up their tools, #dex will block addresses that involved mixing and tax authorities will know absolutely every one of your moves & tax you

- China and India will ban #bitcoin at least 8 more times
- large exchanges like Coinbase or binance will be hacked, maybe even disappear because of regulatory action in some cases
- AWS will go down and #BSC will not be reachable
- Stablecoins will be regulated

Read 4 tweets

DK

@dkcrypto13

20 May

@circlepay

Look guys, everything can always be a scam. But the allegations hurled @circlepay from the #tether skeptics (of which I am one) are a bit too aggressive & too early.

Ever since assets climbed above $3bn, attestations have been later and later. That is reasonable ->

Why? Because an auditor (and this is not an audit, but an auditor attesting to it) has a liability, so while it may be easy for them to attest to $400m, the current $16bn might be might more of a risk. Also $USDC is cross-chain; the larger it gets the more difficult to count ->

And yet, we are STILL within the timing of their last release (its still 8 days before it exceeds that and I'd assume it is natural that it will).

So yes - it could be another #crypto scam. It's possible. But saying a Goldman & Coinbased backed venture
->

Read 4 tweets

DK

@dkcrypto13

15 May

A thought on #bitcoin $BTC

Wanted to put out an article but no time. So I’ll try like this. Within my trading methodology we have left Bull market territory and are now in between. I called that consolidation in my trading article (bit.ly/3yg5bkQ).

What does that mean?

It means that consolidations have started to drift downwards instead of up and while a return to new highs is definitely possible, it is now 50/50 that we enter a full Bear market first. We have established an early pattern of a lower high and a lower low as well.

There are strong fundamental headwinds for $BTC to consider now:

1) Inflation is showing up everywhere and the labor market seems okay in the US. New debt issuance will exceed Fed purchases for the first time in a while soon and the Fed is likely to begin looking at a taper.

Read 17 tweets

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