Gentlemen: I have news
Years back I was a bit naïve in thinking that hedge fund managers, bankers, and CEOs were reasonable adults who don't take risks like the rest of us crypto degens. I thought that institutions entering the crypto arena might actually chill out the space a bit. Lower highs and higher lows, creating a little bit more stability for the realm. If enough users buy low and sell high in theory we could create the mythical "super-cycle" where the price basically just goes up slowly over time.
Boy was I wrong
First of all, day traders don't want stability. That's the very last thing they want. Doesn't matter what direction the price is going they can bet on it with leverage to make a quick buck in any situation. If they smell blood in the water they are going to strike, and they have the liquidity to hit hard and bust up stops in their way.
And while it is true that traditional investors (that don't do a lot of trading) would like number to go up slowly over time... the value of that type of utility becomes a paradox. Because if you know that an asset isn't going to dip even 1% well then you can x100 long it risk free knowing full well you won't get margin called. Moves like that aren't conducive to low volatility assets.
Career Wall Street guys are lunatics.
I guess I should have known this from watching movies like Wolf of Wall Street. When you can drink whiskey on the job and have strippers on the trading floor you know these guys are "living their best life". High risk behavior begets high risk behavior. Volatility begets volatility. And this isn't just a sensationalist thing they show on the big screen. This type of degeneracy is confirmed time and time again by people who have actually lived it and in dryer more documentary-style renditions like The Big Short which portrays how this type of unsustainable overleverage led to the 2008 housing crisis. These are the people coming to crypto this cycle.
Most notably I've been going into random spaces lately of the Bitcoiners that have deeper links to tradfi; the guys who have actually worked for the industry. They've been reminding me that yes, finance bros are way worse than anything we've seen thus far. At least with crypto you have the grassroots guys who believe in crypto as a freedom tool or the users who "came for the money and stayed for the community".
Meanwhile, finance bros only care about one thing, and that's making money. They don't care what it takes to get there or who's going to get trampled along the way. This is pure unadulterated greed, and it's coming to a blockchain near you. The gambling floor is just about to be opened up to some of the most ruthless and cutthroat capital there is.
They're going to fumble the bag just like everyone else
The interesting thing about crypto is that even though it can be similar to stocks there are significant key differences. These similarities give no-coiners a false sense of security as to how the market works. As many of us who have been around for a couple cycles know: looking at a chart and living a chart a two completely different things.
For example, remember in 2023 how I had to keep constantly reminding everyone that the bear market was already over? This lasted like the entire year. The entire year of 2023 was only up. Anyone can see on the chart that the entire year of 2023 was only up, and yet every single person on social media is talking about how bad the bear market is and how down bad they are. The chart quite simply does not reflect this.
This time is different
No matter how obvious the four year cycle makes itself the hype has a way of turning everyone into a delusional crazy person. Again, a newbie can read about these things and they can see it on the chart, but they quite simply have not lived it. They do not know what it's like to live the history of these blockchains. It's NOTHING like a stock. There isn't a Facebook community group of shareholders that gets together every year in a different country to bond over the network and the asset. In fact most people that use Facebook don't even have stock in Facebook. Completely different animals. A person holding Amazon stonk isn't posting memes on social media that say things like, "laser eyes until fiat dies" and "gm".
It's pretty clear there's a deep communal aspect of crypto that goes completely unnoticed to outsiders like Wall Street. Anyone that was actively paying attention to crypto Twitter could see UST collapsing in real time. "Steady lads, deploying more capital." Same with the FTX collapse. Anyone following Binance or CZ had an opportunity to withdraw from FTX right before it exploded into a million pieces. Are the finance bros going to be able to tap into these communities right from the start and hit the ground running? Somehow I doubt that. This isn't a fake it till you make it type of experience.
Conclusion
The biggest degenerates in financial history are being welcomed into the shitcoin casino with open arms. Surely we'll have to open the floodgates in 2025 as an endless amount of liquidity pours into the arena. Of course that same liquidity is more akin to toxic sludge than actual drinkable water, so I guess we'll see how good the crypto filtration system really is.
There's really no need to celebrate or lament any of this, as this was always exactly how it was going to play out. Mainstream adoption wasn't going to happen any other way. Of course Wall Street wants to wet their beak on this action. That's what they do; this is their job; they are professional degenerates. Luckily we've still got a home field advantage on this one.
Posted Using InLeo Alpha