I fu*king hate winter in general and New Years in particular. Every single year some sh*t starts going down mid-November. It always does. All of sudden life just gets complicated. It’s dark, it’s wet, it’s cold, there’s not enough time to do anything, literally, everyone is in a rush to get something done before the new year comes along.
October is always simple and totally predictable. Seasonal depression, red wine instead of white, anxiety, no willpower to do things. You just generally stay in bed or sit in an office chair drilling the clock with your eyes and waiting for an acceptable time to go to bed. And then mid-November comes along and everyone goes mad.
You’ve probably already guessed what I’m getting at, right? The cryptocurrency market crash of 2018. The #cryptocarnage. You know, frankly, I don’t really care. I have a small portfolio the value of which halved since the weekend, but I’ve always followed that ‘number one rule of investing’. I’ve never put in more money than I could afford to lose. So whatever will happen next I’m not panicking, I don’t even care at this point.
Of course, there are a lot of people who do care. People are losing money left and right, and some might be about to lose something arguably more valuable than money. There’s this guy called Ilya Boev, a rather well known Russian trader who said that bitcoin will never fall below $5,000. He bet his little finger on it. He literally promised to chop it off it bitcoin ever goes below that number. He even started a poll asking whether he should stream it on Facebook or YouTube. The chopping is set to happen on the 20th of December, on the “international day of people’s solidarity’. Save that date to your calendars I guess. Also, that’s definitely not the first time someone lost their little finger because of money and a stupid bet.
I want to tell you about something else that people are losing in this crash. It’s jobs. Anthony Pompliano, the founder of Morgan Creek believes that if a reversal doesn’t occur before the end of the year, a lot of crypto hedge funds will be forced to shut down. Their only other option will be to double the funds in assets they hold.
“We have seen 50-80% decreases in asset values in some funds. This means these fund managers will not receive a performance fee in 2019, which drastically reduces the income of the individual manager.”
This also goes far beyond cryptocurrency hedge funds. These past couple of months, the notorious financial regulator SEC went on a full-out offensive. They’ve improved hefty fines in the region of $250,000 on Airfox and Paragon Coin Inc. for not registering their ICOs as securities offerings. They’ve also ordered both startups to fully reimburse their investors, which means that the $15 and $12 million raised in their respective ICOs are now gone and the startups will most likely die.
SEC have quietly laid the groundwork for this back in their 2017 report where they officially recognized all ERC-20 tokens as securities and formed a cyber-division in their enforcement unit to target cryptocurrency companies. Their 2018 report mentions ‘dozens’ of ongoing investigations. While they don’t have an authority to do anything beyond fines and orders to effectively reverse ICOs right now, a lot of people think they will be able to do that at some point soon. David Silver, securities fraud and investment loss attorney, said:
“There’s a global crackdown coming. The government wasn’t going to be intimidated by a bunch of libertarians and anarchists – in the next year or two, we’ll see more than just enforcement actions.”
If this actually happens, it could potentially be a death sentence for ethereum, all of its ERC-20 tokens and, obviously, the entire ICO market. The intense sell-off that’s going on right now definitely has a lot to do with the impending crackdown.
The cryptocurrency industry employs a lot of people. It’s not just technicians, developers and startup members. It’s also people like me – writers, authors and copywriters, employed and being paid by an ever-growing number of news sites and startups.
I’ve been doing this for almost two years and most of the time it was smooth sailing. This summer I was negotiating terms with a big news source, I was about to come on board as a full-time writer. It was everything I wanted: good stable pay and I could work from home, or a remote island somewhere in Indonesia for that matter. Most importantly, I would finally be able to quit the office job I hated.
And then a crash happened. In comparison to what’s going on right now it was minor, but still, one thing led to another and that job offer fell through, as they just couldn’t afford to hire full-time writers at that time. All because of a volatile cryptocurrency market being volatile. I had to stay at the job I hated because, well, I needed to eat and buy clothes and all other things that are needed for survival.
Fast forward to mid-November, the time of the year when shit starts going down and, surprise-surprise, we have another crash on our hands. This time, two resources that I am close to are on verge of being shut down. Again, all because of the crash. I don’t really know the exact reasons, but I know for a fact that projects shut down when investors start losing money. This got me thinking – do cryptocurrency related projects and their investors have all of their assets in crypto?
I research and write about cryptocurrencies almost every day, which is why I know better than having all my savings and assets in crypto. It’s not a store of value, you can go from riches to rags in the blink of an eye. This really begs a question – do these rich people who invest in crypto media outlets not understand how the market works and what are the risks? Do they not know about things like diversification? Honestly, it’s peak FUD time right now, everyone on the market is flocking to all the crypto-media outlets they can find, this is peak traffic time and they can’t capitalize on that?
Also, I hope that everyone on the market understands that things just don’t magically happen like that. SEC, BCHABC vs. BCHSV, Bakkt being delayed yet another time, all happening almost within a week, while whales have clearly been accumulating, mostly OTC, for the past couple of months. The prices are plummeting, but the volumes keep growing. And keep in mind, it’s the end of the year.
Whales are just fat cats and big companies who desperately need new capital for their new projects planned for the year 2019. So why not get together with as many insiders as you can drag down the price, shave off all the hamsters and book your profits once the market inevitable goes back up again?
And trust me, it will, maybe not the same way as last year but it will. Too many important and influential people have a stake in it for the whole thing to just sink into oblivion. For them the cryptocurrency market is nothing but a money making machine, so why ever switch it off?
This also goes out to the smaller, less clever fish that invests into crypto projects and bail every time the market gets a bit turbulent. You’re getting played right now. They are f*cking us over, so calm it down, just like Mcafee said!
HODL brothers and sisters, I hodl too.