Bubble burst shenanigans
Disclaimer:
This blog post is not financial advice, past events are not indicators of future performance. Don’t trust me or any of the so-called “experts”. You can think about it as a thought experiment. If you decide to follow the steps anyway, do it at your own risk.
People’s memory is short-term and to me it seems many are doing irrational things with their crypto as the bubble progresses. But then, what is rational behaviour in bubble times?
Well, if this bubble is anything like the previous one, here is what we can expect.
Bitcoin
BTC price will move along a similar path as in the previous cycle and within the spectrum defined by the Rainbow chart (see blow). Which probably means it will move to the orange and then to the red area before the end of 2021 or in early 2022. Which means hitting $100k if it happens in spring, but could be much more if it happens later. The bubble will burst soon after that — not longer than a few weeks later. In this short period BTC might go even higher. However, after it arrives in the red area, you can expect things will happen fast.
Ethereum
It responds with a delay so Ether will reach its all-time-high a few weeks later. After that ETH will start picking down. There is no reasonable past indicator to tell us what the ETH price might be at that time. But an interesting thing to note is that Ether price went almost 2x after Bitcoin reached ATH on the last bubble. Assuming that ether gets at least 2x from now (not less than Bitcoin, right?), we can expect around $5k, but could be a lot more.
Exchanges
Centralised exchanges will stop working for a few days around the all time highs on both currencies. If one expects that exchanges made progress since the last bubble, I’d like to remind you that Coinbase stopped working recently for a day or so after Bitcoin reached 40k. This is far from the craze we can expect when the price approaches the magical 100k. And we are talking about a market leader that is preparing for an IPO.
Ethereum gas prices
As prices and traffic on Ethereum goes to ATH, we can expect the same will happen to gas prices. We can expect gas prices to go as high as 1000 gwei, as the previous pick was just above 500.
Which means that:
A simple Unswap transaction will cost at least mid hundreds of dollars. With ETH price hitting $10k and gas price 1000gwei, we are talking about close to $1000 transaction fee.
With these assumptions we asked ourselves with @barrutko what the most beautiful shenanigans would be. The end game one could play for this bubble, if you will. And we came up with a following strategy:
Bubble burst shenanigans
- If you want to keep Bitcoin, convert your BTC to a synthetic asset on Ethereum like Wrapped BTC or renBTC
- Soon after bitcoin hits 100k exchange (gradually?) to ether.
- When Eth starts nearing twice its price when bitcoin was worth $100k, exchange to stable coins (btw expect stable coins to be out of wack too, pick the right ones wisely)
Important notes:
- Don’t assume centralised exchanges will work, so do everything in Uniswap or other distributed exchanges
- Plan upfront for super high fees (e.g. prepare a script as MetaMask might not work — currently maximum gas price is 500 gwei)
I would love to see if that strategy will pan out :) Use it at your own risk, but let me know how it goes if you do.
