Big Bank Musical Chairs: Examining Bitcoin Through A Lens Of Price Manipulation

Part One: But This Is How We’ve Always Done Things …

There is simply a large communicative floating astir the web astir a joined mates and a ham (full story). In brief, the woman is preparing a ham for meal and successful doing so, cuts astir 1 inch disconnected of 2 sides of the ham and throws them away. The husband, visibly upset, proclaims, “That’s a discarded of bully ham!” When asked what the rationale was, the woman didn’t know, simply stating that this was the mode that her parent had done it.

Later, the woman called her parent and asked her wherefore she chopped the ends off, to which she replied, “That’s the mode my ma prepared the ham.” The wife’s grandma had passed, but her gramps was inactive live and erstwhile helium was asked wherefore his precocious woman chopped the ends of the ham disconnected helium replied, “So the ham could acceptable successful the baking pan.”

The communicative revolves astir taste grooming astatine its heart, but the communicative is truly thing galore of america tin subordinate to and the conception of: this is however we’ve ever done things. With ETFs, derivatives, futures contracts and long/short positions connected bitcoin each coming into the abstraction wrong the past fewer years, accepted fiscal whitethorn beryllium successful for a rude awakening erstwhile what they utilized to do, nary longer works.

Big banks person been accused of terms manipulation successful the metallic and golden markets for years; however, a statement exists successful respect to if this manipulation is arsenic pervasive arsenic conspiracy theorists suggest, oregon if possibly adjacent worse (InvestingNews, 2022). Between 2008 – 2016 J.P. Morgan admitted to wrongdoing and agreed to wage a $920 cardinal punishment (Reuters, 2020); 1 whitethorn see however the statement has evolved since the quality broke and whether conspiracy theorists were really whistleblowers, with “scarlet-letter Ws” which needed to beryllium removed.

The insubstantial precious metals markets are a unsocial carnal successful respect to not lone derivatives, futures and long/short positions; they are peculiar successful that instances of carnal transportation are fewer and acold between. Often, settlements are conducted done the aforesaid insubstantial markets and nary carnal metallic is ever exchanged, nor verified, moved and stored successful different determination (Journal of Financial Services, 1990). Bitcoin tin beryllium settled much rapidly of course. There is nary 3rd enactment precious metallic audit, nary monolithic freight trucks, nary equipped guards and nary shipping containers to determination cargo overseas. In the slow, cumbersome process of precious metals validation, large banks person seized an accidental to correctly telephone the bluffs of insubstantial traders and settee positions, with further insubstantial versus the load and inconvenience of carnal delivery. Bitcoin removes this load and, successful an instant, liquidated positions could beryllium required for delivery, adjacent successful insubstantial marketplace scenarios. The mode that large banks person manipulated the precious metals markets whitethorn backfire erstwhile attempting to usage the aforesaid playbook connected an plus that tin beryllium verified and delivered successful minutes.

Part Two: Back Up The Bus

I emotion the phrase, “I missed the bus.” The ocular of a mediate schoolhouse kid sprinting to a autobus stop, lunchbox firmly grasped successful manus and backpack violently bouncing down them, lone to get and spot the tailpipes of a giant, yellow, Twinkie-shaped conveyance vanish successful a plume of diesel smoke, makes maine privation to beryllium a kid each implicit again (okay, possibly not truthful much). The adjacent country is usually the aforesaid kid, caput hung low, backpack dilatory shifting from side-to-side, lunchbox hardly being held connected with a digit oregon two, feet dragging 1 painful, breached and defeated measurement aft different arsenic the kid drags themselves done the last mile to school.

I suggest that immoderate folks spot themselves arsenic those kids erstwhile they look backmost astatine bitcoin’s terms beneath $1, $100, $1,000 oregon $10,000. They wonderment if they missed the bus. For regular investors, going backmost successful clip is not an option, however, for large banks successful my scenario, they tin effort to bring the autobus backmost and get on. Nevermind that everyone who was connected clip present has to hold portion the kid who slept successful steps onto the now-retreated autobus and proceeds to marque everyone other late.

I suggest that large banks, erstwhile they yet get their ineligible counsels connected board, erstwhile regulators capitulate and authorities that they personally ain bitcoin and are present allowing this entity oregon that entity to ain it arsenic good connected their equilibrium sheets — oregon erstwhile firm treasuries person accrued vulnerability to bitcoin — volition effort to backmost up the bus, get connected committee and unreal similar the terms manipulation ne'er occurred. Big wealth who missed the autobus volition enactment to little bitcoin’s terms via antagonistic media, fearfulness and the emblematic playbook antics of the past, successful bid to maximize symptom connected retail investors, HODLers and institutions which already person bitcoin connected their equilibrium sheets.

The cruel world for whales — aboriginal and contiguous — is that the aforesaid instruments utilized to manipulate prices successful the precious metals markets are being created successful the Bitcoin universe, but not to their advantage. As such, regular, hard-working people, from astir the world, tin acceptable bounds orders and dollar outgo mean into positions. When whales merchantability disconnected successful an effort to manipulate the terms and bargain backmost successful astatine little valuations, regular investors instrumentality a small portion present and there. With astir 19 cardinal of the full 21 cardinal Bitcoins already mined and galore successful acold retention (or lost), each “pump and dump” script is simply a rotation of the dice for ample positions to perchance not retrieve their erstwhile holdings. Moreover, with centralized exchanges and confiscation issues taking halfway stage, cue Canadian governmental theft of protestors’ and supporters’ idiosyncratic property, acold retention options are becoming the norm for regular people.

Yes, terms volatility is scary successful the abbreviated term, and it volition get worse earlier it gets better. Remember who you’re dealing with. Big wealth does not attraction astir you, your presumption oregon your well-being. They attraction astir maximizing profits; and those profits are maximized erstwhile retail sells. So don’t sell, and enactment to play the crippled amended than they can. They person quarterly reports, concern targets, objectives and stakeholders; retail investors person the luxury of clip if they play their cards close and that is simply a almighty limb if wielded correctly.

As a result, successful the agelong term, HODLers volition person much than capable opportunities to get connected the autobus arsenic whales effort to upwind backmost the hands of clip with their “tried and true” tactics of manipulation. The situation that large wealth volition look is thing they person ne'er faced earlier - constricted supply, halvings and a monolithic worldwide demand. Whales and others volition beryllium competing for coins and fractions of coins with a compartment telephone owned by a kid astatine a autobus halt successful a antithetic country; and they’ll beryllium competing with you, and millions (or billions) similar you.

Part Three: Whales And Minnows

Global request for bitcoin volition not spot an end. The fiat currency feline is officially retired of the bag. At a edifice a fewer weeks agone I asked the waiter however they divided their tips astatine the extremity of the night, wondering if it was equitable; they stated successful nary uncertain terms, “It’s great. Everyone gets a piece, from the beforehand unit to the backmost of the house. We number the full tips and past alternatively of breaking it up and getting insubstantial wealth oregon coins, the proprietor deposits bitcoin into each of our integer wallets each wage period.” This floored me. After speaking to the manager (I’m old, we bash things similar that) helium stated, “I attraction astir my squad and with inflation, I can’t spend to wage them much and much each month, but I tin beryllium originative and person a depreciating currency into thing that they’ll privation successful 20 years; this helps maine clasp endowment and rewards them with an security argumentation for the future.”

The full concern was mind-blowing, but the “insurance policy” rationale is what I privation to absorption on. Each year, millions of radical walk wealth connected insurance, successful hopes that they ne'er request to usage it. This restaurateur was attempting to supply a aboriginal fiscal information nett to his employees by taking the clip to person fiat U.S. dollars to a imaginable aboriginal planetary store of value, bitcoin.

These edifice employees, greeters, cooks, unit and dishwashers are the ones who are incrementally shaving distant pieces of the aboriginal 21 cardinal fixed proviso of Bitcoin. This should terrify large banks, whales and planetary elites. Each clip the terms dips, regular radical tin accumulate more, not less. The daily, play oregon monthly purchases of bitcoin dilatory and methodically devour the disposable supply. Yes, whales person the quality to determination ample quantities of bitcoin astatine 1 clip oregon different and a monolithic merchantability tin temporarily little the price. There are different whales, however, waiting to scoop up proviso and an ever-increasing planetary service of minnows, taking custody of fractions each 2nd of the day.

Part Four: Slow Down To Speed Up

When bitcoin was nearing $70,000 successful 2021, euphoria seemed to overtake the airwaves and erstwhile a dump brought the terms down beneath $30,000 a fewer months later, the bubble had burst, right? It wasn’t that agelong agone that bitcoin’s terms was $300, past the terms “dumped” and each BTC was worthy little than $100. Were immoderate of these prices “bad” purchases if the presumption was held? No, astatine each terms level, accumulators of bitcoin added to their position. At adjacent to $70,000 per BTC, 1 purchased little of the asset, astatine $30,000 they could acquisition much with the aforesaid magnitude of fiat dollars. This is the mode to deliberation astir your position. Price dips are income of the astir precious, globally-known plus connected earth. Remember that we person lone had 3 of 64 scheduled halving events successful Bitcoin’s history: Yes, you’re inactive early.

How volition you consciousness if bitcoin’s terms dips beneath $30,000 tomorrow? How astir $20,000 oregon $10,000? Is this a clip to panic oregon is this the autobus backing up truthful that you tin get on? If you already person a position, yes, your dollar-denominated perceived value, connected paper, is down, but your BTC holdings person not changed. That’s the crippled you’re in: 1BTC = 1BTC.

Big wealth volition enactment to dispersed fear, uncertainty and uncertainty (FUD) successful an effort to person you merchandise your grasp connected your security argumentation for the future. Don’t autumn for it; your BTC holdings are your aboriginal spot astatine the table. Continue to adhd to your position, proceed to hold, and proceed to punctual yourself that arsenic the prices dip, your presumption grows with each acquisition made, nary substance however small. This doesn’t substance if you’re a whale, a minnow, oregon thing successful between. Holding and accumulating a presumption lone reduces the aboriginal disposable proviso and that is simply a bully happening for you and your security policy. Whales volition proceed to effort to play philharmonic chairs; however, they are going to beryllium playing with a radical of radical who might, conscionable might, garbage to basal up someday and springiness up their seat. When a whale gives up a ample presumption (seat) successful the future, they whitethorn ne'er get that spot back.

This is simply a impermanent station by Dr. Riste Simnjanovski. Opinions expressed are wholly their ain and bash not needfully bespeak those of BTC Inc oregon Bitcoin Magazine.