The crypto president

[Gadianton]

The luster of the crypto president is fading. Ethereum, which rallied above 4k on election results last year got drilled to April '23 lows during the April tariff announcements. Granted, it's rallied back up to new highs from there, but I don't think those who bought in at 25k last November were counting on getting wiped out just so a new round of investors could feed off of their carcasses from the TACO trade.

Most on this board likely aren't aware of it, but the worst event in crypto history happened just last Friday. The biggest flash crash ever. I caught it part way through as I hold some experimental positions. I really couldn't comprehend what was going on as my price sources were all over the place. Well, what had happened is that the crypto president waited until after stock market hours to announce 100% tariffs on China, which crashed aftermarket trading, but completely wiped out ALTs. Literally wiped them out -- some established alt coins with market caps in the billions went to just above zero.

Coffeezilla reported that some "lucky" trader brought in a wallet one minute before the announcement and made between 145 and 190 million on short positions. There was other likely corruption from the top but I won't mention until I see more reporting.19B was wiped out in a minute. In one sad case, a rich crypto bro was found dead in his car. There are a lot of sad cases here. The worst ones are the young people who were doing the best they could in an era where they can't afford a house but still want to invest. Well, those of us just riding along maybe lost 20% between Friday and today, which is standard price action. What apparently happened is an epic tangle-up with heavily leverage and stop losses. Now, leverage isn't just used by traders, it's also used by investors. So this isn't *merely* a lesson to stay out of leverage. Many crypto millionaires (any millionaire /billionaire investors in general) avoid taxes by taking loans against their capital. Do you think Musk ever needs to sell a share of his stock to go shopping? So what happens when the value of your holdings momentarily drop to nothing? How are margin calls settled? I don't know -- but, I know a lot crypto bros were totally wiped out on Friday.

So who is getting blamed? They are saying this was 13x worse than the crash from FTX going under. There is more suspicion than I've ever seen pointing to the president and his family and associates. Most of the conspiratorial allegations are aimed at Binance, however. I think there was plenty of grift from the top, I absolutely do think those close to the president are benefiting from his market flash crashes. However, nobody could have predicted the disaster level of this outcome. I tried to "buy the dip" and got a little money in, but for the most part everything was simply broken and trades just weren't going through at all.

Well, this is one of those forks. If you're a crypto bro who believes that crypto is increasingly becoming a scam that benefits oligarchs such as the president you voted it in, then congrats on your life decision. If you believe that the CEO of Binance should go to jail and bla bla bla, congrats on your life decision, because a big part of this presidency is the promise of "deregulation", to allow the invisible hand to guide the market. We saw what the invisible hand can do on Friday. The promise of this presidency to financial institutions is that one day, Chase will have the same level of accountability as Binance. Good luck to all of us when that happens. It will be interesting to see how things unfold given you'd need to be insane to go back to using stop losses or leverage in crypto after this.

[canpakes]

Seen on the twitters. Related?

The background grift these days is amazing.

[Gadianton]

Yes, this is the one 'zilla reported on.

ETA: my guess is there was manipulation going on. The bros on the stock side of the house rather than crypto are trying to soften Whitehouse influence by saying that "he does this all the time now, get used to it" because it didn't affect them as much.

Well, people have largely got used to it, but, there is some additional context here. Bitcoin reached an ATH last week, and that usually correlates with with hot tech stocks peaking. Whenever there's a peak, everyone is afraid it's the end of the bull run and has an itchy trigger finger. On the stock side, there were several peaks last week with swift sell-offs that followed, then the vix spiked massively on Friday thanks to preliminary announcements, and many of these stocks got relatively crushed Friday during normal hours. I think the Dow lost 700 points. It was already a bad day for both stocks and Crypto, and so it was well understood that further bad news was going to do some damage.

[Doctor Steuss]

Seen on the twitters. Related?

The background grift these days is amazing.

The same thing happened right before Trump made his crypto reserve announcement (in March, I think?). The market had been steadily tanking, and someone made a $200 million long bet that it would rise.

The "whale" was within a few market points of losing their $200 million before Trump made his announcement which rallied the markets, and netted the person almost $7 million.

That said, I'm not sure how much of Bitcoin's climb can be attributed to Tether "minting" their fake dollars to prop up the price, or how much is because of genuine investor demand as people move away from the dollar as Trump destroys America's financial and international reputation. I'm somewhat leaning towards the latter, based on gold continuing to set all-time records.

[ajax18]

Seen on the twitters. Related?

The background grift these days is amazing.

The same thing happened right before Trump made his crypto reserve announcement (in March, I think?). The market had been steadily tanking, and someone made a $200 million long bet that it would rise.

The "whale" was within a few market points of losing their $200 million before Trump made his announcement which rallied the markets, and netted the person almost $7 million.

That said, I'm not sure how much of Bitcoin's climb can be attributed to Tether "minting" their fake dollars to prop up the price, or how much is because of genuine investor demand as people move away from the dollar as Trump destroys America's financial and international reputation. I'm somewhat leaning towards the latter, based on gold continuing to set all-time records.

My precious metals IRA is doing quite well. I was pleasantly shocked when I looked at it after 2 years to see it had more than doubled. And I don't even really have any use for it since I'll never retire. Maybe I'll get to serve a mission with my wife in my old age after all.

[Doctor Steuss]

My precious metals IRA is doing quite well. I was pleasantly shocked when I looked at it after 2 years to see it had more than doubled. And I don't even really have any use for it since I'll never retire. Maybe I'll get to serve a mission with my wife in my old age after all.

Silver was incredibly resistant, and I was starting to think sentiments had finally shifted to it being an industrial metal. In the last few weeks though, once it pushed past that prolonged resistance, it's been closing the GTS ratio pretty quickly. I'm sure that's given a nice juicy boost to the account.

Part of me wishes I had moved some money into PM ETFs in anticipation of Trump destroying the economy again, but I've always been kind of old fashioned when it comes to the shiny stuff. I hit the local coin shop a couple of times after the election, and bought what I could afford though. With how shady some ETFs have been in the past with their physical holdings, I tend to go the route of "If I don't have physical possession of it, I don't actually own it." I've always been more drawn to numismatic stuff anyway than pure bullion. I have a few art bars, and some old pours, but overall I tend to like pre-1933 (AU) and pre-1965 (AG) US mint goodies.

I remember being pretty critical of you cashing out so much to put into PMs when you did it a few years back. I never could have imagined the financial stability and international reputation of the United States could be destroyed this quickly. Well played.

[ajax18]

I hit the local coin shop a couple of times after the election, and bought what I could afford though. With how shady some ETFs have been in the past with their physical holdings, I tend to go the route of "If I don't have physical possession of it, I don't actually own it."

I totally agree. Getting silver and just hiding it yourself without being hit with storage fees seems like the way to go. I don't do it because I'd have to pay the penalty on my IRA. When do you think would be time to cash out and leave precious metals? I wish I could invest it in my own practice. Then I'd be free to apprentice my children in the profession instead of letting them watch youtube all day.

[Doctor Steuss]

I totally agree. Getting silver and just hiding it yourself without being hit with storage fees seems like the way to go. I don't do it because I'd have to pay the penalty on my IRA. When do you think would be time to cash out and leave precious metals?

I honestly have no idea, and wouldn't even be comfortable venturing a guess. You'll likely have a bit of a lead time to make that decision, with a somewhat gradual decline, unless people start shorting the paper markets. If that ends up happening, or people start making calls for physical in exchange for paper and custodians start dropping like flies, the price will probably start to fall pretty fast.

Either way, with how early you bought, I think that as long as you set yourself a "this is the price I walk away" threshold, you'll likely still net quite a bit more than you would have if you had been holding traditional stocks.

I have set myself a few such thresholds with crypto (I personally treat crypto like gambling, and never put money in there that I can't afford to lose). I've left a lot of money on the table by cashing out at certain points, but I've also always ended up with more money than I started with.

My own personal hope for my modest precious metals holdings is to pass it on to my son, and to hopefully never need to sell/barter with them. Otherwise, I kind of look at it as an emergency fund that has brought me a lot of joy acquiring over the last 30+ years, when Karl Kohls was kind enough to begin mentoring a kid that wandered into his shop, and knew absolutely nothing about precious metals or numismatics.

[Doctor Steuss]

My apologies to Gad for the further derail, but I think it's worth posting about, and I think it kind of ties into people seeking alternative investments outside of the US Dollar.

Alongside gold's record highs (now over $4,200 for the first time ever), silver has passed $50 for the first time in history. It got close when the Hunt brothers tried to corner the market, and then again on the tail of the Great Recession, but it never cleared that hurdle. Now, it has not only made it past that point of resistance, but is right on the doorstep of $53 (up over a dollar just today).

Similarly, the U.S. Dollar Index was over 107 when Trump was sworn into office. It's currently sitting at 98.80.

[Gadianton]

The circle of the Venn diagram that contains the investor apologists for this administration as well as the aloof libertarian investors is all about the inflation trade. Going all-in on gold or bitcoin is a cynical play. It reveals a lack of belief that this administration, with all its hype, will do a darn thing for the economy. Someone who believes in tariffs should go heavier into stocks, believing that real investment will outperform gold. Stocks also pick up inflation, but will they do better than the neutral hand? Those who stick with gold shout from the rooftop, "I admit the administration I voted in is a failure." Know anybody like that? hmm... Someone who bought gold out of fear of democrats but then the surge comes in anticipation of the biggest round of money printing ever undertaken, by republicans? hmmm...hmmmm

The basic inflation play assumes the size of the economic pie will stay the same. Those with money will desperately try to find assets with stable value as the value of the dollar collapses due to money printing. A lot of people will be wiped out. The savvy investor can take a portion of what is left of the share from the middle class and poor who must consume with the majority of their money rather than sock anything significant away.