Crypto Twitter Commentary Series #1 - 16/12/2022
There’s a lot happening on crypto twitter everyday and as part of my job I try to keep track of all of this activity. In this series I want to provide my feedback on the most interesting or controversial comments of the day on crypto twitter.
Let’s get started:
Interesting idea about turning 4 figures into 7 figures but I like to keep it real. Doing that on a consistent basis is hard and only can be achieved with massive amounts of leverage thus increasing your exposure. Increasing your exposure means that you will increase your risk and be at risk of blowing up your account. It’s a risk that you can be willing to take but once you move up the ladder to a high 5 figures to 6 figures it will be hard to risk as hard as you did before psychologically. Also you must know exactly when to exit the market otherwise you will be caught holding bags with extreme amounts of risk.
So it might have been done in the past and I don’t want to deny it but extreme gains come at a cost. The cost of exposure. If you can deal with that and maintain a disciplined approach to your trading, you might get there.
Yes I do agree fully with his statement not because I believe it will happen but because I know that any outcome is in the universe of possibilities. Many people thought that LUNA was too big to fail, FTX was too big to fail, and all of these other companies. You have to always think from a probabilistic mindset, yes there’s unlikely scenarios but they are possible. You have to guard yourself and carefully consider your risk on every decision you make, especially financial decisions.
Be careful and don’t hold bags just because the project is good or because the devs are doing something. Always be on the look out for triggers that invalidate your initial thesis and don’t be afraid to leave your position. It’s better to preserve capital than to hold loyalty to people that literally don’t care about you. Focus on your own growth.
The narrative that CZ is at fault for FTX failure is complete non-sense. Consider this, FTX was already misusing customers funds for their own activities, then CZ tweets about reducing exposure to them, and when they get caught with their schemes because they can’t cover withdrawals, somehow it’s CZ’s fault? I can’t see the logic here, FTX was already a house of cards ready to be destroyed. If it weren’t Binance it would have been the market eventually.
I definitely questioned the reason why would CZ publically share that they would be selling FTT position, knowing that saying that would cause a crash in FTT token making their selling of the tokens at considerably lower prices. If they wanted to reduce exposure carefully , they would have done secretly over months and would have gotten better prices.
The point is that FTX was already in deep problems with their misuse of companies funds and CZ at most just accelerated that process. Not the fault of CZ that FTX misused customers funds.
TreeofAlpha has a point here and Peter also has a point. No the FTX failure was not priced in the charts obviously. Market participants react to news whenever there’s the news. The point of Peter is that you could have gotten a sell triggers as soon as prices started to crash. This is a fundamental point about being a price action trader. You react to price action and not predict it. Once you got a breakdown you could have shorted the move in theory. I know that tree is making a joke about Peter’s comments, but I tend to agree with both and it can be proven via data.
This is interesting news. If it’s stolen funds, I think the right thing to do is to return those funds to the people that actually lost their money with FTX. But this is just my opinion.
SBF did cause a lot of arm to the industry in general. A lot of trust is lost when a major exchange worth billions of dollars goes down and loses customers funds. It’s sad to see but the industry will overcome it.
Excellent read sir!