On May 14th, I wrote that:
Price history means nothing in markets when liquidity goes to zero. Crypto markets are about to come face to face with this moment
Read the full post here. Liquidity is of key concern right now in several markets. When there are no bids, prices can fall to zero. For now, let's stay on crypto and check in on the warning signs.
Nassim Taleb said it best. If crypto has little or no utility, the primary value of cryptos is selling to someone else at a higher price. If prices are falling, this utility goes away and prices can go to zero. Since I wrote, crypto total market cap has fallen from $1.2T to $920B.
Watch Tether. It continues to not be able to hold its peg.
And its market cap is falling, slowly but steadily.
Trading and Withdrawal Restrictions
Watch for exchanges restricting withdrawals. Cue Binance and Celsius. Both froze withdrawals yesterday.
In addition to announcing layoffs of 18% of its workforce today, Coinbase implemented a 48 hour delay to whitelist wallets for certain transactions.
Celsius Beats Tether
Want to learn more about Celsius, which has jumped ahead of Tether in the race to zero. Read this:
Still Want More?
Ok, then read this.
So much for the democratization of finance.
Any opinions or forecasts contained herein reflect the personal and subjective judgments and assumptions of the author only. There can be no assurance that developments will transpire as forecasted and actual results will be different. The accuracy of data is not guaranteed but represents the author’s best judgment and can be derived from a variety of sources. The information is subject to change at any time without notice.