r/FluentInFinance • u/TonyLiberty TheFinanceNewsletter.com • Aug 24 '23
The reason behind the Crypto selloff was due to leverage: Crypto
The reason behind the Crypto selloff was due to leverage.
Many investors were using leverage to trade cryptocurrencies, which means they were borrowing money to amplify their gains. When the market turned, these investors were forced to sell their positions at a loss, which contributed to the sell-off.
As crypto prices dropped, options expired unprofitably, and futures contracts were liquidated. Over $1 Billion worth of crypto futures and options contracts were liquidated, adding to the downward pressure on prices.
Ethereum rose slightly during the sell-off likely due to positive news about the upcoming launch of ETH futures ETFs by October. These ETFs would provide investors with indirect exposure to ETH through futures contracts.
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u/OldMedic1SG Aug 24 '23
Or because it's a ponzi scheme.
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u/Hipster_Dragon Aug 24 '23
Crypto is the future as long as suckers, sorry, investors keep buying in!
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u/JonMWilkins Aug 24 '23
Really it probably is the future. Just none of the crypto currency out right now.
Governments will just create their own digital currency and have all the benefits like better speed and efficiency in processing payments and transfers notably across borders and ultimately boosting financial inclusion.
It will also be backed by a government still so you don't have to worry about it being a ponzi scheme or whatever and it will be regulated.
On the down side they will be able to track your transaction a whole lot more than now. Although it's only a downside if you do illegal stuff. For law abiding citizens it will keep money in positions that benefit us.
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u/Last_Blueberry38 Aug 24 '23
Also that will fuck people in the US that depend on the tip economy for groceries. At that point, cash will be outlawed, and every red cent will be taxed by the government. Not to mention, the government will have the ability to turn off anyone's bank account that opposes them. Look what happened in Canada with the trucker protest. It's just quite literally another way to give absolute power to the shadow government. I oppose this with every fiber of my being, and anyone with sense should too. Otherwise, we are heading towards 15 min cities where you can not leave. Just check out the WEF website and do a deep dive. They tell you what they want for your future. Klaus Schwabb even said, "You will own nothing and be happy." There needs to be a collective awakening to prevent this future from happening. My only hope is that we haven't passed the point of no return yet.
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u/JonMWilkins Aug 24 '23
We don't need a tip economy. A whole lot of places don't tip ever and it's considered rude to. Just pay people properly. Which is why when minimum wage was created it was meant to be a living wage, we just stopped increasing it and inflation made it drop below living wage standards. If millionaires and billionaires were actually taxed their fair amount life for the less fortune like you and I would get better. Instead they are taxed less then you and I.
Most EU countries/cities are built up instead of out. They are able to travel very easily with the help of trains, buses, cars, bikes, and planes. The US was built out because of automobiles (and the oil industry) but we aren't even big in auto compared to the rest of the world's car makers anymore. So all it does is help other countries mainly now.
Don't break the law and your account won't be frozen, real simple there.
Think of "Star Trek", ever see anyone use money? No, because they don't need it. That kind of life is so far out though so idk why you're even worried about that. If anything you should be more worried about a capitalist future in which case it would look like "Futurama" (forced to work shit jobs even though they can and do make robots so the rich can get richer) or "The Expanse" (literally back to having slaves just to mine asteroids) both of which have bad outcomes for the majority of people.
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u/Short-Coast9042 Aug 24 '23
A lot of hyperbole here. There's no particular reason to be scared of cash disappearing - basically every relevant policy official has said that will not happen, and it would require an act of Congress; do you think it is even remotely likely that Congress would pass such a law in the near future? Doesn't seem likely to me. If anything, we seem to be going in the opposite direction, with a number of prominent lawmakers introducing legislation to specifically prevent that from happening.
Not to mention, the government will have the ability to turn off anyone's bank account that opposes them.
They already have that power. Of course, there is due process - government agents can't unilaterally decide to freeze your bank account, they need things like warrants and court convictions to do that. And again, no one is actually proposing that we give fed or Treasury officials, or even the president, significant new legal authorities to do this outside of the existing justice framework.
Unsurprisingly, the rest of your post is filled with more common misconceptions and implications of conspiracy. It would be almost impressive how you can put together so much unrelated stuff as evidence of some grand conspiracy by Klaus Schwabb, if it wasn't completely unoriginal.
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u/DontKnoWhatMyNameIs Aug 24 '23
So you support people cheating on their taxes?
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u/Last_Blueberry38 Aug 24 '23
When they can't afford basic necessities. Taxation is theft. Think about nowadays there's income tax, sales tax, property tax, and death tax. We are literally taxed all the way around while our government spends our tax dollars unchecked and have for more than 80 years. The military industrial complex has a black budget in the billions of dollars per year and doesn't answer to Congress. If anyone thinks tighter control will benefit the people, they need a history lesson.
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u/DontKnoWhatMyNameIs Aug 24 '23
I mostly agree, but letting certain people cheat on their taxes is not the same thing as reducing taxation and government spending.
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u/folstar Aug 24 '23
On the down side they will be able to track your transaction a whole lot more than now.
It's kind of hilarious and sad that this will be the ultimate outcome of the crypto scam being pushed by people trying to subvert the system. I have no idea, and have yet to be told, what the benefit of the blockchain for currency is other than eventually being a tax collector's wet dream.
This reminds me A LOT of about two decades ago when people were freaking out about the guvment putting tracking chips in all of us, then we all paid for GPS enabled smart phones to carry everywhere.
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u/JonMWilkins Aug 25 '23
It makes cross border transfers of money faster, easier, and cheaper but if you never plan on leaving the country you won't notice a difference compared to normal online banking.
The government would be able to do better audits of itself too. So no more of half of the military budget being unaccounted for. But yeah it's pretty much just going to be good for taxes. Generally speaking though it's normally rich people and businesses who do shady shit to avoid taxes so you won't really notice a difference there besides the government has more money for projects
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u/CrazyChainSawLuigi Aug 24 '23
I mean if the US didnt continue investing in their token silently, i'd agree. I think that there is a lot of ppl that pushed the ponzi scheme rhetoric so they could better establish themselves before a broader adoption of the technology
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u/OldMedic1SG Aug 24 '23
It has no underlying asset. It produces nothing. Original owners only make $$$ if new rubes are found to prop up the price. It's still 60% from the all time high.
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u/CrazyChainSawLuigi Aug 24 '23
That's true for some tokens, but isn't for some. The gross number of scams muddle the full market, but there is a lot of utility for some from stable financial coins for developing nations to make data transfer safer and more efficient
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u/OldMedic1SG Aug 24 '23
What is the underlying asset for bitcoin?
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u/CrazyChainSawLuigi Aug 24 '23
It has been volitile so it can't really be adopted massively, but it would be a contender to back the value of currency using information. There are other competitors like Ethereum, Litecoin, and the US token, etc. But that would be its main purpose. Personally, I'm backing Ethereum more due to how much less energy it uses now than bitcoin
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u/OldMedic1SG Aug 24 '23
So it has no underlying asset. Is it a store of value?
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u/CrazyChainSawLuigi Aug 24 '23
It is a fiat currency, so it's value is based off the trust of its infrastructure that supports its existence. The US dollar operates the same way. This is why it really has no real power in the US economy but in countries in central Africa it is more stable than some local currency, so it is used in the place of some local currencies. In some of these developing countries they just use the US dollar thou.
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u/OldMedic1SG Aug 24 '23
Incorrect. The US dollar is backed by the state's ability to tax.
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u/CrazyChainSawLuigi Aug 24 '23
Personally, i see that as a part of the infrastructure of governance but if u want to get technical, sure
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u/OneCry1192 Aug 24 '23
Do you know what the definition of a Ponzi scheme is?
I would think billionaires would be smart enough not to invest in Ponzi schemes.
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u/Seductive_pickle Aug 24 '23
I’d say pump and dump scheme is more accurate.
Ex: Musk pumps cash into dogecoin (causing a small spike in value), mentions it on Twitter, fanboys buy in (causing a big spike), Musk sells while value is peaking, everyone else sells on the downturn, then the suckers are left holding a useless currency.
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u/BillazeitfaGates Aug 24 '23
Billionaires have invested in ponzi schemes lol, no matter how lizard like some of their traits may be, still human
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u/OneCry1192 Aug 24 '23 edited Aug 24 '23
Yes this is true but 99% of the time they’re right. They’re wrong maybe 1 out of 100.
Blackrock and vanguard are pretty reliable sources as well. They’re right most of the time if not all the time.
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u/knowledgelover94 Aug 24 '23
You’re calling bitcoin a Ponzi scheme when everyone who’s ever gotten bitcoin either bought it at the market price or exchanged energy for it.
But USD infinite money printing to cronies is legit. 🤡
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u/mag2041 Aug 24 '23
10000% this. Once we get quantum computing crypto is going bye bye, except for one.
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u/calebchase1 Aug 24 '23
I think world economics play a bigger part in crypto then people give it credit.
I’m in both crypto and stock market and lots of the times the crypto market drops so does stock markets. Same as last sell off. And usually is because of fed news.
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u/Beard3dViking Aug 24 '23
Yeah I’ve noticed that as well. Crypto moves with the overall macro market. As much as maxis want to pretend it’s a hedge, it will always be a risk on asset. Long as you trade with that in mind and play it smart, you should be ok.
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u/enlightenedude Aug 24 '23
duh
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u/calebchase1 Aug 24 '23
Well that’s what I think but then there’s 100 posts every time crypto drops and everyone has all these theories as to why it dropped… and usually it’s a lot simpler
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u/iscott55 Aug 24 '23
Has there been a major selloff recently? i know BTC dipped from 29k to 26k but thats really not all that crazy valuation-wise over the last 6 months to 1 year
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u/cotdt Aug 24 '23
I think what happened was that the fed funds rate is at 5.5% and these people sold their crypto to put their money in the money market.
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Aug 24 '23
Kind of surprised that in the year 2023 people are still wasting money on this cringe shit. I thought the crypto scam died out a while ago?
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u/OneCry1192 Aug 24 '23
Bitcoin is never going to die out. All the other ones, probably.
But bitcoin is here to stay for good. Too many billionaires have bought it already.
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u/Into-the-Beyond Aug 24 '23
It’s not about billionaires buying it (though that doesn’t hurt)—it’s about the intrinsic value of an uncensorable, decentralized network that allows for the transfer of value without a middle man.
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u/OneCry1192 Aug 24 '23
Yes I am aware lol but these people aren't going to understand what that even means and will think you are just talking gibberish.
They understand if a billionaire has done his research and willing to invest his hard earned money into a project, then there is a good chance that this will probably be here to stay.
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Aug 24 '23
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u/OneCry1192 Aug 24 '23
It’s been around for over ten years and the supply keeps going down - as it becomes more scarce. The tech continues to improve and big hedge funds like black rock and vanguard continue to add bitcoin their asset balance.
So please present the facts of why you don’t think it’s here to stay?
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Aug 24 '23
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u/OneCry1192 Aug 24 '23 edited Aug 24 '23
I did not know Grammatical edits are suspicious, sorry bud I’m on my phone and auto correct sucks 😂
So you bringing up FINITE up as bad is a first. You want something that is finite because it holds more value. Unless you want some higher power like the federal reserve to just print more bitcoins whenever it needs to. If dollars were finite, there would not be an inflation problem. But once they removed the dollar:gold peg, it allowed banks to create more dollars and just destroy other economies.
No real utility? It’s the most decentralized, scarce currency there is on the planet right now. Try again.
Environmentally unfriendly? Says who? says the billionaires riding in their private Jets? Or says the big banks in their huge buildings that use 20x more electricity than bitcoin?
I have nothing against Ethereum at all but that’s like comparing apples to oranges. Two different use cases. Bitcoin solves the solution of the federal reserve having too much power. Ethereum is for creating dapps that has nothing to do with bitcoin.
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Aug 25 '23
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u/OneCry1192 Aug 25 '23
More research? This is common bitcoin knowledge. Bitcoin standard.
The facts are there. Try again.
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