Meanwhile the dollar down leg is getting pretty long in the tooth. Gold should correct this week if I’m right, and circumstances don’t change in some fundamental way. I am looking to buy the miners on the next good dip.
If you’re talking about Tether for BTC, they print the Tether. It’s a stablecoin, not a regular crypto. Stablecoins are supposed to be a dollar proxy for traders to use. The idea is to escrow money dollar-for-dollar and hold it as collateral. In reality, the Chinese miners who print Tether don’t have to do that, and they don’t. They can pay themselves back instead after BTC runs up and they sell all theirs.
Counterparty risk carries the most risk in any transaction and the first risk one should determine. A highly regulated exchange would eliminate that risk. In the article he talks about his friend who would use a VPN to give himself a Bolivian IP address so he could use a foreign exchange to get high leverage. To me that is the height of folly. Might as well make your stock trades with strangers in an alley behind the bus station. His friend deserves to lose his money for sheer stupidity.
“There is a lot of genuine potential in crypto — the startup ecosystem got this part right! — but that potential won’t be realized if the industry is riddled with frauds. And while over-regulation is a real concern, the fact that this racket has gone on for so long and at such a scale is a clear sign that we need a mechanism to validate the reserves of stablecoin issuers.”
For me that was the principal takeaway. There is a good chance that there is something in cryptos but only by being on regulated exchanges will their potential be realized. I can wait until then.
Interesting article, I see it was published on 14 January, can’t tell which January though, assume it was this year. I’m surprised it hasn’t been more widely published so I wonder why.
True, let the buyer beware. In the first case you haven’t actually bought Gold so is it the case that Gold had counterparty risk? A moot point perhaps. The second point might be harder to prove unless it had some sort of serial number on it but I take your point.
njbr
2 years ago
You might as well project “support levels” for roulette wheels.
Speculative “investing” is gambling.
Get long on NFT’s–it’s the new wheel.
Eddie_T
2 years ago
I think I’d rather wait for the dollar to top on its next up leg then and then buy the miners again.
Nothing wrong with taking a small gamble on bitcoin or some other crypto, but it just should be understood that it is gambling and not investing or even trading. My position is that I don’t have cash I can afford to gamble with. I need it for real investments.
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Money laundering. I don’t know how that might work or even if it does. The article posted by @WendyBG might throw some light on it.