Cartels Don't Need Bitcoin to 'Moon'. They're Already Rich.
It is a classic phrase: if you want to get rich during a gold rush, sell shovels. Misattributed to many, including Mark Twain. The original coiner of the phrase is not important here, though. Rather, it's the concept.
The idea is that the real money is not winning the race against others in search for vast wealth and hidden gold. Realm money is in the structure, utilities, supply chains and selling commodities that enable other sellers to try and win.
A pizza restaurant will try and compete against all other pizza restaurants. But those restaurants likely have to purchase their supplies and constant capital (machines, refrigerators, ovens) from supply chains. Being the guy that sells to all those restaurants is the guy selling shovels during a gold rush. If those restaurants go out of business, others will come and take their place (assuming we aren’t in a horrible capitalist market crash, which honestly could very well be on the horizon). You aren’t directly competing with small fry, but making profit off their competition. This example, of course, exclude the obvious competition between shovel salesmen.
That, in essence, is what the exchange cartels are doing in the crypto market. Instead of purchasing bitcoin in the hopes that it can one day gain in value and be sold at a much high prices (which, in essence, is simply Greater Fool Theory), the bitcoin exchange cartels are selling shovels.
The most lucrative of those is the short/long contract game. Buying and selling on margin. Why? Well, let’s look at the latest news.
Over $275 million worth of bitcoin longs were liquidated on Bitmex in the latest run up of bitcoin over the halving-hype. I’ve written about Bitmex in the past, and how it could have completely and totally liquidated bitcoin into the ground if they had wanted to.
These actors, wielding such vast sums of capital that they effectively dominate the crypto space a cartels, controlling the price through artificial pumps and dumps, do not need Bitcoin to reach vast sums in order to make their riches. In fact, they already have their riches, and their continued accumulation of capital, during a bear or bull market, continues unabated.
In any ‘legit’ market, a sudden drop of 12% within minutes would have raised red flags and prompted government investigation. But here in the wild west of crypto, this is taken for granted. The cartels can send a shock wave through the market, further triggering other automated bot sell-offs, creating a spiral effect that sends the price of bitcoin down into the abyss. This in turn liquidates all the margin-longs on the books, guaranteeing vast sums for the cartels. In this case, $275 million worth. They simply liquidate that sum into other currencies, USDT or USD, and the game continues.
This is the reality for bitcoin. The cartels don’t need it to moon in order to make money off gamblers. Only the poor, or relatively poor (unless you have tens of millions, you are small fry) need bitcoin to ‘moon’ against a new halving. They are out there dying in search for gold, while the cartels are comfy inside, ready to sell the next idiot an expensive shovel.
