Jaguars Are Loose

My strange pattern recognition

Jaguar Attacks

AKA: Context

Example from real life given by a friend explaining my lateral thinking

Someone explains solid plan to rob a bank

I respond with: What about a jaguar getting loose from the zoo and attacking during your get away

Given my history of calling the oddball scenarios… it’s got 6040 odds of happening if I call it out.

So What?

I have a knack for finding edge cases and picking the one that’s most likely to happen.

I smell a ‘jaguar attack’ in the crypto markets.

Foreshadowing

@Bitfinexed popped up on my radar recently. They are a Twitter user who’s posting a lot of great material regarding Bitfinex and Tether. They are also posting a ton of great info on the shady situation that Tether has become.

I’m also tracking @Silver_Watchdog on Twitter. They are more of a general watchdog with posts about all of the markets.

Post One

While reading through Twitter one day I see this post (link) that calls out a bunch of Exchanges for shutting down registrations/verifications/etc. You’ll notice each of these Exchanges is heavy on Tether as a peg of value. They use Tether to value tokens on their exchanges.

Post Two

And then this post (link) pointing out a Bitfinex exec has dropped their warrant canaries. Now you could be that exec and hand wave some but at the same time… dropping a warrant canary is serious business.

Silver Watchdog

To add icing on the cake I’ve been paying special attention to Silver Watchdog. They paint a lovely picture that all markets are well overdue for a correction. I’ve been sitting back and looking at the stock markets, commodity markets and crypto markets wondering how long extreme growth can be sustained.

Seems I’m not alone in my thinking that we’re past the point of sustainability.

OK…

I’m posting this because I keep having WTF moments.

What I See

  • The crypto market patterns are shifting (again) and this time they make no sense on the surface
  • People are rushing into XRP which is a centralized token
  • BTC dominance is jittery and after the next correction unlikely to break 50%
  • The BTC community remains quite toxic and is working hard on undoing years of good will.
  • There are ‘seas of red’ in the crypto markets with increasing frequency
  • The market cap is >500 BILLION and tons of money has flowed this year
  • The exchanges are heavy on book entries and lean on enforcement
  • Wash trades, spoof trades, tape painting, pump/dump is very common across the board still
  • Exchanges are trading tokens that can’t be traded outside of book entries (ARDR from 2017/12/28 - 2017/12/31 comes to mind)

The Jaguar Attack

The Trigger

Right now all I can see in the market is a MASSIVE correction. I expect to see 100-300 billion lopped off the overall market cap. It’ll happen quick and it’ll be triggered by Bitfinex/Tether crashing hard and causing a ton of collateral damage. Bitfinex/Tether will be the next Mt. Gox clusterfuck and it’ll be far more epic and further reaching than the Mt. Gox failure.

Bitfinex/Tether can easily be regarded as ‘too big to fail’. Especially given how many of the largest Exchanges peg to Tether as a value proposition.

People are waking up and nobody I know with big holdings will go near Tether. I doubt they’d go near it even if they had some kind of shady deal in place. It’s too dangerous at this point. It will fail. It’s a matter of time.

The Obvious

When the meltdown happens I think any shit coin is going to be flushed. All of those crap ERC20 tokens will instantly be worthless.

On top of that ICO mania will be dead. Any ICO without a MVP will be flushed. Projects that ICO’d and have MVPs but minimal utility will also be flushed. Very few ICO projects will be left standing.

Forks of Bitcoin (Gold, et all) will also get flushed. There can only be 1 or 2 ‘Bitcoins’ and only the original and cash have any kind of market power. Those will remain but their combined dominance will be 25-50% of the market. Tops. We have better options with non-toxic communities.

Old coins that never ‘did much’ will die. Dash, Doge come to mind. These may stick around but I expect quite a few to fail and be abandoned. If they haven’t already proven utility (aka: are usable) then they’ll be flushed.

The reckoning will be massive. Few will be left standing.

The Jaguars

Proof of Work will be nearly dead. It’ll be present but twitching. There has already been a massive shift away from proof of work to proof of stake. The reckoning on the horizon will gut proof of work. Nobody is talking about this and it’s the Jaguar Attack I’m calling. The [near] death of Proof of Work.

We’ve set ourselves up for proof of stake style tokens ruling the day. Buying into the markets with fiat will be the new normal. Same as the current markets. No more will you be able to re-purpose a computer for mining to build a stake over time. We will be back to square negative one. Unless you got ‘lucky’ and bought a million XEM (or equivalent) for a tenth of a cent you’re fucked.

Aftermath

I think at the end of the day we’ll be left holding XEM, LTC, XMR, PIVX, ETH as the main players with utility and value. NXT, DENT, TRX, EOS, BTS, STEEM, will all stick around but will be cheap. Penny stock cheap relative to their current market prices. [Editors note: this was written 2018/01/01]

Those left standing will be the coins that have fast networks, strong support and ‘just work’ day to day. We’ll have proof of work outliers like XMR in the mix but I expect only a couple to survive. The proof of work tokens DO NOT have day to day utility. The proof of stake tokens have beat them at their own game.

Poopy Parades

Now that I’ve successfully pooped all over the crypto parade

Bear Markets

The market is going to flip from bull to bear (as are the traditional markets). The writing is on the wall all over the place. We cannot, as a globally connected race, sustain this much growth for this long. It’s unsustainable. The markets (ALL) will correct at some point. I feel it’s due much sooner than the general population believes.

I’m Not Leaving

I don’t care. I will NOT be getting out of the crypto market. I realized my gains recently but I left about 25% of my value in the market.

Why?

Because I do believe in this long-term. I’m a long position person. I just setup a computer for day trading and easier day to day management of my positions.

I’m going to slowly buy some more proof of stake tokens.

Here To Stay

Crypto tokens/currencies are here to stay and are going to be a major part of our future.

I welcome the bear market and corrections. We’ll have sane valuations again. The bubble burst will equalize and level the playing field.

When the reckoning happens, more people will have the ability to work with crypto currencies. That is a good thing.