How to Profit from Bitcoin Bubble
danielwilczynski.com
danielwilczynski.com
Tether is supposedly tied directly to USD. Their website says as much and claims transparency through audits. There hasn't been a single audit that has been independently verified.
Right now there have been nearly [800m tethers minted](http://omnichest.info/lookupsp.aspx?sp=31). They are minting them at an alarming rate as seen [here](http://omnichest.info/lookupadd.aspx?address=3MbYQMMmSkC3AgW...).
This is of course circumstantial. I just thought I'd share as I'm stepping back from the markets as a result. @bitfinexed on Twitter seems to be the loudest voice on this topic.
There is likely very little USD in any of the major exchanges, they are all almost certainly running a fractional reserve given recent price hikes.
When the Tether nonsense implodes there'll be a bank run on all exchanges and major liquidity crunch.
There's basically no wait to safely profit from this other than being out of the market.
Agreed that a lot of exchanges are non-transparent, can't tell if they're stealing or losing customer funds.
But this is unrelated to "recent price hikes". A higher exchange rate doesn't cause fractional reserve.
I'm founder of https://bitbank.nz which provides high frequency forecasts for lots of cryptocurrency markets, because its only forecasting 2 hours ahead it can be more accurate by using other more denser sources of data such as computing the orderbook imbalance and weighted best fit lines through the trades weighted by trade amount. Check it out :) we have an API/bulk data developers can use.
The best way to profit from a bubble is to stay away as much as possible imho. Value investors had several tough years of FOMO angst during the dot-com bubble before everything (except value) came crashing down.
If you want to risk maybe 1% of your personal net worth in something like crypto I say go for it. Just don't bet the bank on something that very few pundits were discussing 1-2 years ago.
> The best way to profit from a bubble is to stay away as much as possible imho.
Well. Obviously you're wrong. Some of the richest people got there by speculating.
Speculation is one of the best way to profit... Just not on average. On average it's rather bad. It always shifts wealth from larger group of people to lower.
It's very good for very few, and rather bad for rather large amount of people.
Many people got rich on BTC it will be paid by those who will hold BTC when it crashes.
The problem with bubbles is that it's human nature to believe that you have an edge over others on the timing of events. So yes, for most people speculating on Bitcoin this way is objectively destructive.
If someone has an edge (superior technical knowledge, information on applications nobody has considered, or a time machine) I say go for it.
But it's very hard for people like the writer to acknowledge that they are no better advantaged/informed than 6 billion others.