Gox BTC Hypothesis, a Revision

I made a whole post about it before, so I figure the revision is also worth its own post.

I think I made a critical error in the hypothesis about alts going up while BTC goes down. This is probably going to weigh on the entire market, and here's why ...

1. The common psychology of alts going down more when BTC goes down, will cause some people to sell.

2. The price of all cryptos are somewhat tied together, because they all trade against each other. For example, when someone has gains in BTC, a portion of those people are going to want to trade that for an altcoin, and thus, the initial fiat capital that came into the market, will be loosely tied to crypto pairs. Same happens in reverse.

3. These markets are very likely over leveraged / under-capitalized. There's only so far that the Tether printing machine can go, before the dangers of depegging (or flash-crashes) become a problem. Certainly they can use Tether as a leverage mechanism to inflate the bubble ... But at some point, there has to be real fiat capitalizing the system, or the bubble will pop.

4. There will be some level of selling GOx coins and profit taking to fiat. It's inescapable. How much, we don't know for sure, but it's at least $1.7 billion. But likely more. So there will be real fiat capital exiting an already over-leveraged system.

And if Bitcoin is overleveraged, so many of these alts are significantly moreso. Real fiat capital exiting the system is going to cause the valuations of everything to drop. Perhaps a few alts will crash less than BTC, or maybe crash only equally as much, but this is a large negative for price across the board.

I think that this is the correct way of understanding this event. BTC and other prices are going to go down right now and test some supports, and there will be an opportunity for a small bounce coming up in maybe a week. It will be a false bounce, so don't get trapped. Because by the time those Gox coins are available, price will be significantly worse.