Have you guys been thinking about the current state and levels of manipulation?
Are we (as a crypto community) aware that the BTC (and all other cryptos) supply is probably not really 21m?
There have been a few red flags that indicate that exchanges can easily use fractional reserve for the actual on-chain Bitcoins that are on their wallets, print BTC internally (of course, they can't modify it on the blockchain, but those Bitcoins live in their SQL databases) and dump it in their users (also triggering stop losses precisely if needed)?
Monitoring the on-off ratio (Coindesk posted a chart a week ago) which measures the ratio between transactions that are supposedly organic vs transactions that are going on exchanges, and it turns out the majority of the transactions are between users and exchanges, but (this is directly from a source) exchanges dont need more than 5% of their holdings in order to satisfy the withdrawals. Another red flag was HitBTC disabling withdrawals for the Proof of Keys event (the reason -> they probably have pretty low BTC coverage).
Exchanges could easily pump the price, unload fake BTC until the price dumps (in this case 80%+) and then buy back and try to get the coverage back to 1:1 ratio. Even if they dont, the fractional reserve system proved that it can live with fairly low coverage without any issues for a very long time.
Speaking from history, most unregulated territories in finance always ended up with scandals and people going to prison, but so far there have not been any dramatic events yet in crypto and we have so many shady exchanges and washtraded volume -> I am definitely sure that this is coming.. this is not only unregulated but shady (due to the possibility to stay anonymous easier than in the traditional financial world). Also, this is not only for BTC but literally for all the cryptos (its even easier for non-BTC coins because most of them have bigger % inflation to BTC).
From one side, if there are events like this (which the red flags and the logic makes me believe in this completely), it means that the “actual” BTC price is higher, but on the other side, people that are invested are literally exposed to a possible ponzi, because if its fractional reserve in crypto, its probably fractional reserve in FIAT, so those dollars/euros that we see on the exchanges are not really there (at least not all of them).
Conclusion: Exchanges are (or can easily be) shady central banks in this case and there is no chance that all of the exchanges are legit.
IF and when this industry gets regulated and all the scandals get exposed and cleaned, I will be back. For now, I would like to stay on the sidelines (after being BTC maximalist for many years) because this is really scary. Not to mention that if this is the case, we have the exact structure as synthetic CDOs in 2008 -> you buy ETH/BTC pair with fake BTC -> create at least 3x market cap increase in ETH (that's why it always pumps more) -> buy ETH/RANDOM_ERC20 here -> create 20x value (you can actually pump some coin 900% with 5k$). I honestly think that the actual amount of money put is probably a fraction of the total market cap -> 10% (12b$ atm).
Please give me counter-opinions since maybe I am not seeing something here
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