My Fantasy
1163 sats \ 27 comments \ @siggy47 27 Jul bitcoin
A few years ago I was listening to Caitlin Long. She predicted that some day a major conventional bank or investment firm would get caught flat footed and get rekt by a crazy bitcoin move up or down. Today I let my imagination run wild. Here's what I thought:
  • BlackRock, Fidelity, and the other big players are using derivates to hedge their bitcoin positions. Their goal is to stifle volatility and control the fiat price.
  • All these companies operate Monday through Friday. They have never witnessed an enormous weekend move.
  • Trump starts talking at the Bitcoin Conference at 2:00pm. He makes some outrageously bullish promise. Word spreads. MAGA world goes crazy.
  • The price pumps like only bitcoin can. Word spreads.
  • Enormous shorts get eliminated. The big boys are forced to cover, further causing bitcoin to skyrocket.
  • Coinbase crashes. The price plummets,and bitcoin returns to where it started.
  • A few big institutions fail.
Ridiculous? Probably. But it would be fun.
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85 sats \ 0 replies \ @jtwoodhouse 28 Jul
It'd need to be a non-TBTF bank for the above, so none of the big money center banks.
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96 sats \ 0 replies \ @BitcoinAbhi 27 Jul
Although I don't care about volatility but today I was laughing just looking at the Bitcoin price go wild! I didn't know that it was due to Trump otherwise I could laugh a bit more. He talks so much big things and is looking mad for Bitcoin at the moment
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86 sats \ 1 reply \ @Coinsreporter 27 Jul
It's exactly my fantasy as well!! Again a great write up!!
Coinbase crashes
Isn't it a fashion whenever volatility hits?
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0 sats \ 0 replies \ @siggy47 OP 27 Jul
Always.
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96 sats \ 0 replies \ @iam_jerry 27 Jul
No one can't predict the bitcoin's storm. But, Nice one.
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75 sats \ 0 replies \ @DiedOnTitan 28 Jul
Here is another fantasy scenario that could play out:
  • 401k/IRA accounts get regulatory approval for private Bitcoin cold storage without incurring a penalty or tax event.
  • An ETF allows for "in kind" Bitcoin withdrawals. That is, you can elect to receive Bitcoin directly to your own Bitcoin address. The benefit to this ETF is that they would drain liquidity from all their competitors and there would be an exit fee, but nothing close to the tax/penalty hit of early IRA/401k withdrawal.
  • This creates a stampede from all other ETFs to that one, because every hodler with a 401k dreaming of this scenario will exercise it immediately.
  • Those other ETFs that are fractionally reserving bitcoin will be caught with their pants down and collapse.
That would be a fun day indeed, as long as that "in kind" ETF let's us know their plan here on @sn first.
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75 sats \ 0 replies \ @Hamstr 28 Jul
lol that would be funny to witness a weekend move up 10K or something like that. But normal have a tick like that, often it reverts to the original position for a while. Or you see, abnormal ticks on the hourly.
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75 sats \ 0 replies \ @Satoshi__Nakamoto 28 Jul
This is funny
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75 sats \ 0 replies \ @Satosora 27 Jul
Another Gamestop? Anything is possible, they havent even been through one bear market yet.
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75 sats \ 0 replies \ @NRS 27 Jul
There would be companies declaring bankruptcy with high market valuations; it would truly be something crazy. The world is not in a position to handle such shocks right now; it would be an explosion of all crises at once. Just imagine if that were to happen.
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75 sats \ 0 replies \ @flat24 27 Jul
No matter what happens, there is only one way. Diamond hands 🤲💎 and every time you can buy more, buy! accumulate and accumulate without looking back and without looking at the price in the present time. thanks for sharing your vision
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75 sats \ 0 replies \ @JesseJames 27 Jul
I think BlackRock and Fidelity and the likes finally come to understanding that there is no future without bitcoin, so if they want to mean something in the future they will need to adopt Bitcoin, they don't know how (yet) so ETFs is a "relatively safe" bet for them. But I would not be surprised if they follow Saylor's footsteps and invest heavily in their own BTC. The banks are close second. What stops any Bank today to buy a lot of BTC and start L2 own nodes lightning service and even offer cards next to visa ones, that business model works 24/7 and they get their cut on Sunday's as well.... I think its fear (and know how) and uncertain political climate, if the new government will be BTC friendly they will succeed .... That's the way I see it. The future is bright.
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75 sats \ 0 replies \ @jerrybature 27 Jul
Absolutely fun!
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75 sats \ 3 replies \ @grayruby 27 Jul
All quite feasible except the big institutions fail part. I don't think huge institutions with multi trillion dollar AUM could fail from being offside a couple billion in Bitcoin hedges.
I think the price drops after Trump speaks unless he makes some outlandish promise like RFK. Huge amount of OI has been added in the past couple days. Which could be short biased but likely more so long biased hoping to catch the kind of wave you describe from Trump's speech.
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81 sats \ 2 replies \ @siggy47 OP 27 Jul
Your analysis is more likely, and probably more accurate. In the real world I think it's conceivable that a small, undercapitalized copycat hedge fund could get blown out. I'll take what I can get. 😀
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75 sats \ 1 reply \ @grayruby 27 Jul
Maybe but most of those guys are long spot, short futures so something pretty wild would have to happen.
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41 sats \ 0 replies \ @siggy47 OP 27 Jul
Sure, go ahead. Walk all over my dreams.
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75 sats \ 0 replies \ @cristaiji 27 Jul
Wouldn’t that be great. And I’d think it’s very plausible too. None of these institutions are invincible.
I still remember the 2008 crash that followed the sub prime mortgages fiasco. It’s not an exact like for like comparison but we did see a number of banks fail as a result of their own stupidity.
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75 sats \ 1 reply \ @Undisciplined 27 Jul
I know trading hours are only Mon-Fri, but are they really so vulnerable? I can believe either answer.
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42 sats \ 0 replies \ @LaserStack 28 Jul
Likely not. Most institutions have have only at most tiny BTC positions ¯\_(ツ)_/¯
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75 sats \ 0 replies \ @037aef6755 27 Jul freebie
if all the MAGA that exist now would cost at least 1 dollar and no bitcoin would be needed.
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154 sats \ 3 replies \ @tomlaies 27 Jul
are using derivates to hedge their bitcoin positions
All these companies operate Monday through Friday. They have never witnessed an enormous weekend move.
Enormous shorts get eliminated. The big boys are forced to cover
  • That's not how hedges work. If you hedge an asset with a derivative you have two positions that cancel each other out. When one thing goes up, the other goes down.
  • Also derivatives and securities normally (there are exceptions) cannot fall deeper than zero. If you want an entity to "cover" you need naked shorts of underlyings. Those can fall deeper than zero.
  • Are you sure these companies hold hedges? Do you have a reputable source for this claim? Because that would be an odd thing to do that are only held through AUM on behalf of customers.
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21 sats \ 2 replies \ @siggy47 OP 27 Jul
No doubt this is pure speculation. However, derivates are not only used as a hedge, though that would be a prudent use. That's why people laugh at the term "hedge fund. " You hear the terms net long and net short all the time. That's because these guys are often not hedging. A perfectly hedged position realizes little or no profit. They are overweight one side or the other, because that's how huge gains are made. I'm not looking at the markets right now, but I'm sure there is plenty of derivative action right now. That's the case every day. I agree that it would be crazy for custodians like BlackRock or Fidelity. Little hedge funds? Maybe.
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21 sats \ 1 reply \ @tomlaies 27 Jul
You specifically said
derivates to hedge their bitcoin positions
Was this a mistake? That would be okay when you meant to write "speculation" instead. Or are you talking out of your ass without basic understanding of the topic?
What Blackrock and Grayscale do is holding Bitcoin on behalf of customers and extract a margin. They don't care about Bitcoin price - they extract this margin no matter at which price. It would be very weird to own dervatives to either speculate or hedge something here.
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21 sats \ 0 replies \ @siggy47 OP 27 Jul
You're right. I did write hedge. Regarding speculation, that would be unlikely with the big custodians. This was not meant as a seriously thought out post.
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54 sats \ 0 replies \ @IamSINGLE 28 Jul
And right at the beginning the price dropped again! I think, people nowadays have so much deep pockets that they placed shorts again and the price went down!
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0 sats \ 0 replies \ @Octopus 28 Jul outlawed
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.