Were we ever NOT on defense?
Well we’re on it more now.
We’ve said it numerous times on the podcast.
If the Crypto.com, Binance, and Tether investigations start to gain steam, we need to recognize it, and act accordingly.
The investigations into Binance have ramped up in the past 10 days or so, and as a BNB token holder, I took action.
No need to mess around, swapping my BNB for stablecoin for a loss. Hoping I can buy back if/when the smoke clears.
— No Nonsense Forex (@This_Is_VP4X) December 13, 2022
For those scoring at home, I bought around $320ish, and sold at $270ish. I would imagine if the smoke does clear, the new price I can buy at shouldn’t be much higher than $270, so chalk it up as a tax write-off perhaps.
Binance is the world’s largest crypto exchange, and if anything should happen to it, the crypto market will absolutely follow it down.
We need to get back on defense.
Where My Head Is At
I really like the idea of holding BNB coin, should it come out of this relatively unscathed.
Having equity in the top exchange going forward is a good thing. Exchanges do very well in bull markets, whenever that may be.
Now when I say “investigations” are occurring, it’s pretty much just the Twitter army doing its thing. Not much different than what happened to FTX. There has yet to be an official state or federal investigation into FTX. It was all Twitter and a few crack journalists.
But there are serious doubts abound.
"Execs bailing, institutional (Jump) capital fleeing, and charges coming"
Relaying from @AP_ArchPublic. pic.twitter.com/XUhicl2JNE
— Dylan LeClair 🟠 (@DylanLeClair_) December 13, 2022
Most FUD tweets are a lot less thought-out, such as Mike Alfred’s tweet (which is now hidden) saying how everyone should take everything off of Binance immediately!
As a result of the FUD, whether real, imagined, or somewhere in between, this prompted investors to frantically pull their funds off of Binance, to the tune of over 1 billion USD in a day’s time.
There are of course ripple effects to this of course, as withdrawals had to be halted for a spell, causing even more panic and FUD. As of press time, you still cannot move USDC off of Binance if it’s an ERC-20 token. If it’s on another chain, you can.
CZ, the CEO of Binance, posted a link to this Medium article (very well written btw), explaining why this occurs. The post was written by the man who manages all of the funds for Paxos, who has USDP, and plays a large role in BUSD.
Also as of press time, things appear to be normalizing, but it could just be a tremor in what could be a much larger quake in the future.
Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in. 🤷♂️💪 https://t.co/WLK2KyCym0
— CZ 🔶 Binance (@cz_binance) December 14, 2022
CZ has been adamantly defending the FUD, and has not been able to achieve the vicious backlash SBF did during the same period of time.
Perhaps because there is a lot less to be upset about.
But we’re going to stay on top of this story.
I move back and forth with my stablecoin holdings, and admittedly more often than it probably necessary.
I’ll eat the fees all day to keep my USD safe.
Why have numerous outlets if you don’t use them?
I will still have some USD in stablecoins though, and primarily in USDC. Just less of them.
I personally feel good about USDC. Here is another Scott Melker interview regarding stablecoins, this time with the Head of Global Policy from Circle, who owns USDC. Scott’s been killing it with these lately. If you nerd out on stables like I do, it’s a good listen.
But keeping some money there is great for me at least, for two reasons.
- Easy to transfer straight into my Crypto.com card.
- Diversification from the trad banking system
A third reason would be that it makes it super easy to swap into something I want to buy, but we’re not in that situation now.
But never forget that second point. I still think we could be in for a banking shock this decade, and even though I have a portfolio of banks from different countries, I still like the diversification of having USD on the blockchain as well. It’s a layer of diversification we simply didn’t have before.
How would a Binance fallout affect BUSD? Can’t say, but I wouldn’t want to have anything there right now. Let things cool off first. If you trade there, you may not have a choice, but stay vigilant.
Binance acquired Trust Wallet in 2018. Trust Wallet is a decentralized hot wallet that I use and invest in the token.
This is NOT FINANCIAL ADVICE, but I think Trust Wallet is separated enough from Binance that if we see a collapse, it will be just fine.
It was explained to me a long time ago that our coins and tokens are all on the chain. Wallets are just there to show us how much of it we have, and to facilitate transactions.
Makes sense, you don’t ever see wallets collapse like exchanges do. You do see hacks once in a blue moon, but that’s different.
So I feel okay leaving my crypto there for now.
The TWT token, which I invest in, may take a dive with everything else, possible moreso because of the Binance tie, but I’ll be monitoring that as we go. I’ve already taken profit there, so I may just let it all play out naturally.
If Binance survives this, it’s very bullish going forward. Twitter mobs will find somebody else to attack, and Binance will likely regain it’s incredible lead on the rest of the pack.
I will be interested in buying back BNB during that time.
I would expect it to be not much higher in price than it is now, perhaps lower.
And I’m okay taking a loss on one position because of what’s at stake here.
Having to make moves so quickly like this is not my favorite thing to do, but crypto is a game of extremes sometimes, and I’m grateful we have the ability to adjust on the fly if we feel the need.
Nobody can predict the future with these exchanges.
Almost nobody thought FTX would ever be in any kind of trouble, much less collapse. Now a lot of people simply assume Binance will.
Interesting to see how this sentiment shifts so dramatically.
I will remain cautiously optimistic on Binance, though I’m still not taking any unnecessary chances. I’m back on defense.
But let’s hope for the best here………oh shit…….wait a minute………….
Do you feel as reassured by Binance as i do?
— Jim Cramer (@jimcramer) December 14, 2022