Two Comma Pauper Outs Professional Crypto Fudders

Not everything you read on Twitter or even trusted financial publications is real. 

Two Comma Pauper (TCP) posted an eye-opening Twitter thread yesterday and joins the show to discuss how professional pumping and dumping is done in crypto.

Selling especially small-cap crypto is a game of finding liquidity and minimizing slippage for early holders to get out of their vested positions. In order to improve liquidity, TCP needed to create demand.

• TCP paid the traditional financial press writers to place a story. Yes, these writers for Bloomberg, Reuters etc. are taking payments for essentially fake news (note prices below are what TCP charged his clients):

• TCP then goes through his rolodex to use the financial press pieces as citations to trickle down news to the crypto press.
• Crypto Twitter, paid groups and various Telegram channels are also financially compensated and they in turn push out the manufactured news to their groups.
• Now the liquidity starts rising as retail FOMOs in. This is where the early investors can get out as price is rising when retail buyers enter.
• This wave of selling creates a dump that puts retail investors in a bind, essentially making them bag holders. For example, a retail investor who got in to a coin at $100 but whose price is now $50 is thinking to themselves that they will hold until it goes back up to $150. But, unfortunately for retail, that demand spike was all manufactured.

TCP reminds everyone that you need to keep risk management in the face of volatility. The antidote to excessive greed and leverage is to put more of your portfolio in spot. Also think to yourself: if someone is bullish on a stock or crypto, what would their motivations be for going on a station like CNBC and shilling it?

Is China Really Banning BTC Mining?

Bobby Lee, one of the original founders of the now defunct BTCC mining pool, joins Crypto Banter to discuss whether recent China mining bans are real.

Bobby notes that China rarely changes laws. They instead have vague laws on the books and periodically change how they enforce those existing laws. All the announcements in this past week from China reference back to documents drafted in 2017 and 2013. Previous to this year, there was no mandate to stop BTC mining.

What is different this time is the state council has gotten involved and said they want to ban mining in China. This has put more pressure on the individual provinces. The biggest domino to fall so far is the province of Inner Mongolia banning Bitcoin mining. Inner Mongolia along with Sichuan are the two provinces most favored by Chinese BTC miners because of cheap energy costs especially during the rainy season. Bobby thinks this is the start of a lot of mining equipment moving out of China.

Bobby mentions that China is mostly worried about their citizens getting rekt from leveraged crypto trading. Most China citizens access exchanges outside of China using VPNs even though crypto is banned in China. Their governments crackdown on mining is an extension of wanting to eliminate crypto trading among its citizens.

Crypto Banter Guests Michael Arrington & Natalia Karayaneva

Michael Arrington, one of the founders of TechCrunch, joins the show. 

Michael is big on the Polkadot and Terra ecosystems. Some projects he's currently investing in on the Polkadot ecosystem include:

• Acala - Defi on Polkadot.
• Moonbeam - EVM execution on Polkadot.

Michael mentions that automated market makers are on the way for Polkadot.

Luna (Terra ecosystem) started off as just a way to conduct ecommerce purchases in South Korea. They’ve since added on to it with projects like Anchor (lending protocol) and Mirror (synthetic stocks). It’s hard to buy stocks in Asia, so there’s a need for a synthetic protocol like Mirror.

Michael’s very focused on the quality of the teams. For example, he’s invested in the Alice app because its CEO is from the Luna team.

Michael believes in Solana as well even though he got in late. He’s also invested in Cardano, though he’s more bullish on the Polkadot, Terra (Luna) and Solana ecosystems.

Real Estate as NFTs - Natalia Karayaneva

Natalia Karayaneva, CEO of Propy, joins to discuss placing physical properties on the blockchain. Propy will be auctioning off an apartment in Kiev, Ukraine on June 8th as an NFT. The auction will last a total of 24 hours. Payment of the auction will be by cryptocurrency and the winner will receive a QR code. When scanned, the QR code leads them to paperwork that makes the auction winner the new owner of the property after signatures and KYC. The entire property title transfer is streamlined without the hassles of a typical property transaction:

An American LLC owns the property - the home and the LLC attached to it are traded as one. The LLC makes the legal paperwork cleaner and also helps protects the privacy of the owner. If the new owner wishes to sell using traditional real estate markets, they are not locked into the blockchain (Propy can help them burn the NFT if selling via traditional markets).

Real estate is ripe for disruption - transferring property ownership is currently a long, drawn out process. Selling properties as NFTs makes a lot of sense and is just one more example of crypto eating the world.

References:

Youtube link for today's show: https://www.youtube.com/watch?v=bW14cFtftoM