Sunday, December 11, 2022

Cardano Daily Discussion - December 12, 2022

Hello everyone,

Welcome to the Cardano Daily Discussion!

The standard sub rules apply here (see sidebar), with the exception that price discussion is allowed in this thread, though we encourage you to try not to make this the focus and talk about the project itself. Please ask questions, help others and be civil - be sure to get involved in Project Catalyst too!

If you're new, please make sure you're read through the newbies guide and share it with others (use the ?newbies comment command to reference it).

⚠️ Scam Warning ⚠️

Please read the Cybersecurity guidelines for Cardano Users.

There are ongoing giveaway scams on youtube and many scammers lurking in Cardano's social channels impersonating ambassadors/moderators/official staff contacting users via direct messages.

For example, searching 'cardano' on youtube and sorting by most recent upload date shows several giveaway scams running (all videos in screenshot are scams):

Ongoing 'giveaway' scams on Youtube

The youtube scams are automated; use stolen footage usually of Charles Hoskinson and are restreamed so to appear to be 'live'; appear to have many watchers (which are bots); use bought hacked channels and are edited to appear like official channels.

Do not be fooled!

To be clear:

⚠️ There is no such thing as a Cardano giveaway
⚠️ Never share your seed phrase with ANYONE
⚠️ Never send ADA to someone promising to send you more ADA back
⚠️ You will never be contacted by ambassadors/moderators/staff

Please report scams on the Cardano Fraud Detection Bureau.

⚠️ Scam Warning ⚠️

Crypto Black Swans discussion. What's going to be the next one in your opinion?

What Is a Black Swan?

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.

Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.

I don't even know if it's fair to call these events Black Swans anymore in crypto considering they are extremely common and predictable but I guess from the viewpoint of your average crypto investing genius they are unforeseen, so we'll stick with that term.

Recent Black Swans

Terra Luna meltdown - May 5-11, BTC price drops over 25%. Nail in the coffin for 3 Arrows Capital. 3AC failure domino effect takes out Celsius and Voyager.
Celsius bankruptcy - Rumors June 7, withdrawal freeze June 13. BTC price down over 27% in that week.
FTX bankruptcy - Starts November 6, BTC drops ~22% in a week. The dominos are still falling, more to come. All eyes on Gemini and Genesis currently.

Potential upcoming Black Swans

Greyscale Bitcoin Trust liquidation - Currently trading at under 50% the value of the underlying assets since it's managed by the parent company of Gemini/Genesis which are insolvent after FTX collapse. Greyscale BTC has current holdings of roughly $10.8 billion or around 633,000 BTC and roughly $4 billion in other crypto, the majority of which is ETH. If Greyscale were forced to liquidate it would put immense sale pressure on the market.
MTGox reimbursement - Some part of 141,686 BTC that has been off the market for almost a decade will reenter the system likely sometimes in early 2023. It is unclear how much of this will immediately be sold. Many crypto top minds say all the MTGox recipients are "old school" crypto bros unlikely to sell in a bear market but the ATH back then was about $1250, so everyone from that era is at worst looking at a 1400% gain. There's also
Tether collapse - If (or IMO when) this happens it will be the Black Swan to end all Black Swans. The entire crypto market revolves around the Tether stable coin and if the house of cards collapses everyone in the market is in huge trouble from top to bottom.
Binance collapse - By far the largest crypto exchange, the effects of insolvency would be catastrophic to the entire market. Recently rumors of insolvency have swirled around the exchange with breaking news they may have failed to pass an audit attempting to prove their solid financial backing.
Bitfinex BTC Open Longs - This one is a sleeper to a lot of people who follow this space casually and ties in closely to Tether. Many say this relationship is part of a conspiracy that has been manipulating the price of BTC for years, with shady money passing between the two firms being used to cover massive losses and Bitfinex and inflate the underlying assets used to artificially back Tether. Regardless of any of that I want you to look at this chart. https://www.tradingview.com/symbols/BTCUSDLONGS/ A lot of people will tell you that is Tether and Bitfinex "buying the dip" using highly leveraged longs to attempt to artificially prop up the falling price of BTC. Regardless of if that true or not there are around 40K of open leveraged long positions opened during the May crash at an average of around $35,000 and another 10K positions during the June crash at an average of around $25,000. Then add on top the 55K other open long positions and the fact any of them opened in the past 5 years is red and that's a lot of heavy bags. At some point those positions will have to be unwound, should that happen quickly due to market conditions the results could be rather violent.

Probably missing quite a few, lots of good choices though.

What do you think will cause the next 20% or greater drop in BTC/crypto price?

These Events Will Affect Gold and Bitcoin Price Next Week!

https://www.coinzigzag.com/these-events-will-affect-gold-and-bitcoin-price-next-week

Two Upcoming Macro Events Could Crush Bitcoin (BTC), Says Analyst Nicholas Merten

https://dailyhodl.com/2022/12/11/two-upcoming-macro-events-could-crush-bitcoin-btc-says-analyst-nicholas-merten/

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https://preview.redd.it/6uop3001x95a1.png?width=1576&format=png&auto=webp&s=3b498b41bd917e23ce83356f0ecfe6cf5836a09d

Big news trending all over the internet today

https://i.redd.it/s9acaatdp95a1.png

Personal view of seeing another bullrun after Bitcoin halving in 2024

I wanted to write down my prediction underlined with pro arguments that would make another bullrun likely for Bitcoin (altcoins excluded) if someone is interested. I want my prediction to be discussed here and want to state upfront that I am invested in Bitcoin and Ethereum since about 2017. What did I miss out. What can be considered as wrong/misperception?

- Global recession looming right now. Historically the average recession has lasted 17 months (https://www.fool.com/investing/stock-market/basics/crashes/how-long-do-recessions-last/). High inflation and high interest rates would peak before halving estimated in March, 2024. Historically other bullruns gained pace around half a year after the halving event. FED is trying to do a soft landing in their interest rate policy. If it succeeds the timing in context of the halving could be in favor of a bullrun.

- Corporate started to adapt Ethereum, naming NFTs in their accounting which is ongoing in 2021/2022. It will mature over the next years and keep gaining market share from Bitcoin. I likely see Bitcoin as a currency reserve for Ethereum which will be less volatile and more predictable in its price action. It still requires speculators to be flushed out. But with more use cases you will get less speculation.

Bitcoin Dominance Chart: https://coinmarketcap.com/charts/

- Bitcoin as one of the major POW (Proof of Work) protocols left will stay in its unique position. Computing power turned into encrypted currency (or digital gold) will have value on its own. Heavy encrypting costs money and Bitcoin holds that. My opinion gets underlined by recent investments e.g. from Apple to encrypt their cloud computing services. Encrypted data is valuable. So is encrypted currency (or digital gold). Other POWs will have to compete against the argument of energy waste more than Bitcoin because of their lack of decentralization, adaption and therefore security. I can imagine that high security protocols will be built on decentralized Bitcoin hashing power.

Bitcoin hashrate: https://www.blockchain.com/explorer/charts/hash-rate

- Google Trends does allow a historical view on Bitcoins/Ethereums search queries. While "Bitcoin" search queries peaked already in 2017 its valuation (ATH) has only peaked in 2021. That means that the USD price of Bitcoin was higher even when less people searched for it. My assumption here is that corporate has paved the way for the 2021/2022 bullrun and invested into it. Google was maybe not the platform of choice to research about Bitcoin for private investors anymore. Other platforms were involved to inform about it. Also it could be that "old" investors that already knew about Bitcoin were responsible for the price action on the last bullrun who likely won't do search queries on Bitcoin on Google. I'd takeaway here that Cryptocurrency has reached mainstream by now. My point about corporate adoption of Ethereum underlines that perspective. The next bullrun will be channeled by corporate advertising budgets with a promise of added value (e.g. digital gold praised by bank institutions, NFTs by corporate or social platforms).

Google Trends: BTC/ETH search queries, global. https://trends.google.com/trends/explore?date=2016-11-11%202022-12-11&q=bitcoin,ethereum,btc,eth