Dear Crypto, You’re Being Played By Wall Street
Like many of you, reading through the hundreds of Crypto projects out there has killed my attention span for Crypto articles, so I’ll skip to the ending right here: It’s my belief, based on my decades of firsthand experience of seeing Wall Street’s games play out over and over and over, that this entire ‘China banning ICOs’ story is the last-ditch ploy by Wall Street, to get you, the newbie Crypto-trader/-holder, to sell your Crypto before a Bitcoin (and/or Ethereum) ETF is approved in a matter of months (or possibly even weeks).
Back-story of me: up until a couple years ago I was a Portfolio Manager for the largest hedge fund in Colorado. I’ve been in and around the stock world since the early-90’s and successfully traded through the 2007–2009 financial crisis. I started watching Bitcoin early, very early in fact, and I’ve made tens of thousands of Crypto trades over the past 5 years with overall much success. Enough about me though.
On March 10, the SEC denied the Winklevoss’ Bitcoin ETF. The reaction was an instant 20% haircut followed by another 10% cascade over the next week or so. Shortly after the denial though, BATS decided to file a petition to review the decision. BTCUSD bottomed shortly thereafter when it was made more public via media that BATS would appeal the decision. And then, bizarrely enough, on April 25 the SEC decides to review the decision, shocking most everyone.
Well, almost everyone… from the time that the appeal was made public to the time that the SEC decided to review it BTCUSD was already rallying right back to its March 10 highs and the very day the SEC made this decision is the day that those prior highs were surpassed. Typical headfake by Wall Street.
This is not just purely coincidental that this decision, which most analysts saw as likely failing, would see the SEC decide to review it in late April on the very day that BTCUSD rallies back to those March highs and breaks above it. This is 100% typical Wall Street. Complete misdirection of the public to believe one thing, all the while going and doing another thing (accumulate BTC) while price also goes in that direction due to accumulation by insiders in the know.
It gets better though….
Shortly thereafter in June, the WSJ gets wind of a story by someone in the know that Dalia Blass is next in line to be the Director of the agency’s Division of Investment Management. Dalia Blass, coming from Ropes & Gray, a law firm advising the Winks’ Bitcoin ETF, has instant connections with getting Bitcoin to Wall Street. BTCUSD, shortly after this story coming out, makes its June high though at around $2900. That high would stay in place for nearly 2 months.
Once again, complete misdirection of the public but in this case it was to get them hyped up about the prospect of a Bitcoin ETF again, right at a market high, right before a 40% short-term correction over nearly 2 months.
It gets better still now…
Here we are. Dalia Blass is named Director of the SEC’s Division of Investment Management on August 31 and we just saw a massive rally again. But now there’s no more hype machine to get the Crypto-sphere going, PLUS it’s time for the new SEC Director to ‘put up or shut up’ and anything other than immediate ETF approval means immediate dumping of Crypto. However, given the long Labor Day weekend there’s time for one last-ditch controlled dumping to freak Crypto out. It needs to be quick and nasty though so it must have lots of bang for the buck. And what better way than to make it a)involve China, b)involve regulations, and c)involve ICO’s.
First the initial article comes out one week ago saying that Chinese regulators are considering banning ICO’s. But then all of just one week later (today, Sept. 4), we see that China has gone ahead and banned all ICO’s.
Immediate reaction is -25% on ETHUSD and nearly -20% on BTCUSD. So here now, Wall Street has gotten their short-term, massive pullback and has also freaked out Crypto pretty thoroughly with the typical ‘China FUD’, which was always pulled on Bitcoin, and most importantly Dalia Blass’ name is long forgotten.
So what’s the next ‘play’ here? Quite simply, the new SEC IM Director approves the Winks’ Bitcoin ETF. When is the tricky part though. If it’s immediate (like, within weeks) you’ll see this Crypto decline reverse instantly and it’ll be green with massive volume for weeks until the actual start of ETF’s trading (the start of trading will be announced ahead of time so Authorized Participants will be able to load the boat full of BTC). Additionally I’d expect to see ETHUSD green(er) as speculation starts up that it’s next in line for its ETF approval. Frankly logic says there’s no reason why the approval of the Winks’ BTC ETF wouldn’t be immediate.
However, Wall Street logic says to first rally everything back up to highs and maybe get it going a bit higher beyond there before finally announcing that the ETF’s are approved. From there, the media go crazy, the public goes crazy and the prices of Cryptos would go insane for a bit before the actual ETF’s start trading.
HOWEVER, the day the actual ETF’s start trading could likely be THE top for months and possibly years. It would be a completely typical Wall Street move, reminiscent of many hyped up IPO’s which fizzled on day 1 as Wall Street sells what they’ve been accumulating for awhile to the eagerly-buying public.
We’ll see. I could be terribly wrong and Crypto could crash and burn here.
Disclaimer: I’m long ETH but not BTC.