Market Watch: I Have Returned!

After a brutal 2700 mile move across the country,

I've come back to continue the grind.

Looks like it took me pretty much a full week to move, as my last post was 8 days ago. Crazy stuff.

A lot has happened since then.

While I was on the road CUB transitioned from Version 1 to Version 2; a huge upgrade. However, this was a difficult transition, as the process of farming CUB is competitive. As soon as V2 pools were generating yield the V1 pools needed to be deactivated. This put me in a very awkward situation because I was on the road while this happened, and my LP tokens just sat there in V1 generating zero yield.

Regardless of all that, I was still able to farm 2600 CUB when I reached my destination and transition to V2. I was also taught an important lesson.

Don't put all the eggs in one basket.

I realized too late that I had put some of my crypto security 100% in the trailer I was towing across the country, including CUB. Instead of taking my Trezor with me on the trip, I packed it, and I realized that if the trailer had been stolen I'd of basically have lost the fifty thousands dollars I have invested in CUB at the moment. This made me a bit nervous at times, but lesson learned... the hard easy way. I only lost a couple hundred dollars in yield by making this mistake.

However, this brings up another important question: is this a sustainable practice as we scale up? Is it really reasonable to expect millions of dollars of liquidity to transfer from one version to another with less than 24 hours notice? I would say this isn't really a solution that would work if CUB had billions of dollars in market cap rather than millions, but I guess we won't have to worry about for a while, or if we do that would be a great problem to have.

Those who noticed that V1 was no longer generating yield got a huge bonus for transferring early. I personally know someone who got an extra 1000 CUB just for moving over early, and any bots that sniped the swap got way more than that during the initial opening yields that were massive because no one had joined them yet. Value was siphoned from investors that didn't move instantly to those that did. It's not really fair, but this is the Wild West after all.

Silver Lining

One really great thing about moving during this time was the dip on September 21st. Need I remind everyone of the prediction I made for September 21st 8 days ago during the last post I wrote before moving:

Bitcoin to Break $50k on September 21st.

Once again I prove that it's very easy to predict when there will be volatility in the market, but not so easy to predict which direction that volatility will flow. I predicted a big spike and we got a big dump. It's crazy how often that happens to me. Take note, as even though it looks like I got it exactly wrong, I would actually be more wrong if the market had traded flat and we got a huge nothing burger.

Of course, many attribute this dip to the China Ban on crypto, but I think that would be a foolish assumption. This exact same thing happened in September 2017, and look what happened then. September is always a poor performing month, as I have mentioned a dozen times by now.

Even worse than China banning crypto transactions, it seems that Binance is bending the knee to regulators more and more as of late.

Fellow Binancians,

Binance reviews its products and services on an ongoing basis to determine changes and improvements in light of evolving global compliance standards. To enhance user protections and provide a safe crypto environment for everyone, Binance is making the following changes:

I love how they say complying with regulations protects the users when it is blatantly obvious that they are only doing it to cover their own asses legally. Nice try, CZ.

Effective immediately, all new users are required to complete Intermediate Verification to access Binance products and service offerings, including cryptocurrency deposits, trades and withdrawals.

Shit.

Existing users who have not yet completed Intermediate Verification will have their account permissions temporarily changed to “Withdraw Only”, with services limited to withdrawal, order cancellation, position close, and redemption. This will be carried out in phases to minimise user-experience disruption, from now through 2021-10-19 00:00 AM (UTC). Existing users will be informed directly with more details. Once users complete the Intermediate Verification, they will be able to resume full access to Binance products and services.

This part is a little weird because I've been using my account and I'm getting no actual warnings that my account will be disabled even though this claims I will be cut off on October 19th at the absolute latest. This puts me in the denial phase and I wonder if they are actually going to limit my account. Why aren't they letting me know when I log in that I need to KYC? Very strange.

Binance strongly advises users to complete their Intermediate Verification promptly to avoid delays in the verification process and restrictions on their access.

Uh huh, yeah I'll bet you do, CZ.

Binance is announcing these measures to help support its efforts in Know Your Customer (KYC) and Anti-Money Laundering (AML). This will further enhance user protection and combat financial crime. To learn more about KYC, please click here.

Again, lies. This is just as much about "user protection" as Bitcoin is only used by criminals and drug dealers. The powers that shouldn't be are threatened by Bitcoin, and they make the rules; plain and simple.

Thanks for your support!
Binance Team
2021-08-20

Eat my ass. KK thanks.

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Looks like I may be in the market for another exchange!

What the regulators don't get is that they can't stop new exchanges from popping up and providing pseudo-anonymous services. Where supply meets demand, markets are made. There will ALWAYS be a demand for privacy in the cryptosphere, and if the centralized legacy companies can't provide the supply to that demand, DEXes and peer to peer trading will take over even faster. It's only a matter of time.

Honestly I'm seeing this situation as a golden opportunity. Q4 is still perfectly on track for a mega-bubble. Price action in September is irrelevant. We still have plenty of time to hit all time Highs in October and $100k in November. These are the targets we need to smash to have any hope of hitting a $250k+ mega-bubble in December/January.

In fact, this dip is so good that I've learned how to margin trade on Binance for the first time ever. My VPN was set to Sweden but I was being told I was IP blocked by Binance. This was confusing until I found out that the server in "Sweden" was actually based in Germany, which is absolutely banned from margin trading on Binance.

Once I switched my VPN to Mexico it worked fine, but I did make one more mistake along the way. I borrowed Bitcoin thinking this was the correct play. That's actually the exactly opposite of what I needed to do.

If you borrow Bitcoin, you have to pay Bitcoin back. Meaning the asset you borrow is the asset you are shorting. Therefore I needed to short USDT by borrowing it and dumping it for Bitcoin. After a few moments of stumbling I got the hang of the multi-account margin trading and borrowed $2400 with only $1200 worth of collateral.

Unfortunately the interest rates for margin trading on Binance are absurd. I'm being charged 25% APR. That's worse than a credit card. It would be way smarter to just get a credit card and buy Bitcoin with it. This strategy is superior in almost every way, as not only can you easily get a better APR than 25% with a credit card, but also a credit card has zero risk of liquidating collateral because your collateral is your credit score (usury). Meanwhile, if Bitcoin crashes again I'll lose my $1200 in collateral.

The only advantage of margin trading on Binance is that it is a permissionless loan. It is automatically approved no matter what my credit score is. Considering I recently applied for a credit card and got rejected, this is actually a pretty big advantage. On top of that, if I'm right about this mega-bubble Bitcoin is going to increase over 500% in the next three months, so the 7.5% interest I pay for longing the market is largely meaningless. It is also possible to buy Bitcoin with a credit card and then use that debt to margin trade with... which is obviously even more risky but worth noting.

It's also noteworthy to mention that margin trading on Binance is interesting because there is an option to pool all your collateral together, giving users the option to borrow and dump any asset that they desire with x3 leverage. The non-linked margin trading pairs allow x10 leverage, but I haven't figured those out quite yet and perhaps never will. Being able to pool collateral is a big advantage.

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Figuring out how to margin trade on Binance also made me realize why Coinbase often shut down service during big dumps in the market. Back when they allowed margin trading they needed liquidity to liquidate the bad debt of margin trades in the red. If they allowed other users to dump in front of them they'd lose money, so they denied service to others in order to dump in front of them. I'm kind of surprised that's even legal... maybe it's not. Maybe I'm way off base but it makes sense to me if that what was going on all those times that they shut down during high volume dumps.

Conclusion

It's good to be back and a lot of developments have happened while I was gone. I still busy settling in so I'm gonna kill it here. However, I should have enough time to get back to writing one post a day. The grind continues.

Posted Using LeoFinance ^Beta