"What I did not understand was how highly concentrated bitcoin ownership is by its nature, and why the 'bitcoin' market is becoming increasingly fragmented with different groups with their own architecture creating their own non-interchangeable types of bitcoins and crypto-currencies.
The key to this is obviously going to be the middlemen, the exchanges. And I do not believe that they are particularly well founded or regulated. The technocrats are essentially making it up as they go along, and they do not necessarily agree, or have to agree, with each other.
I cannot believe that the regulators have allowed the CME to bring out futures for these things, which apparently they are going to do over the weekend. The Bitcoin market seems much more like the very early over-the-counter stock market under the buttonwood tree. Or perhaps even tulipmania.
I am not saying that everyone involved with this is acting in bad faith. Not at all. And something like a cryptocurrency *could* become real money some day. It needs someone with a lot of financial clout to stand behind it with sufficient full faith and credit at a stable value of exchange for some particular flavor of crypto-coin. This is just my own, certainly fallible, judgement. But based on everything I know this is nuts. And it is going to end very badly."
Jesse, One Thousand People Own 40% of Bitcoin Market, 8 December 2017
"Turns out that the fundamental principal in Decentralized Finance (DeFi) is that every firm must be deeply interconnected with other firms, each holding the other’s token, and lending to the other, and bidding up each other’s tokens, so that if one firm goes to heaven, they all go to heaven together – which they did – and when one firm goes to heck, they all go to heck together – which they’re now doing. Makes for very smooth and efficient contagion.
They all hold each other’s tokens, and they all bid up each other’s tokens to mind-boggling levels amid gobbledygook theories of the new financial world, called DeFi, but now they want to sell each other these tokens, and prices collapse and exchanges, trading firms, and lenders go to heck?"
Wolf Richter, Cryptos Plunge, Contagion Sweeps Across DeFi, 9 November 2022
"Most people who say they are using bitcoins for transactions are really just trading obligations held in trust by some third party. If you have made money on it great. But in my own estimation, and I could be wrong, the hyping involved in bitcoin is all too reminiscent of the dot com bubble. And there is no talking to people who are seized by the desire to be rich, and those who seek power.
Like the dot com bubble, I suspect that the rewards from this digital gold rush will be taken primarily by those who sell the picks and shovels and storage and assaying services to the miners, and a few insiders and lucky early adopters. And the average person is going to get skinned."
Jesse, Bitcoin, the Mania, 26 December 2017
A softer than expected CPI number this morning ignited the unexploited red wave rally.
Bear market rallies are impressive, because the bias in the market participants tends to be defensive and shaded to the short side.
The Dollar dropped, precipitously.
Gold and silver rocketed higher.
The major stock indices did moonshots.
Let's see how it goes. PPI tomorrow.
Pivot city.
Have a pleasant evening.
