Short

A Wolf In White Knight's Clothing - The End of A Cartel

Updated

The saying is usually "a wolf in sheep's clothing," but you'll see why I reworded it a little further down. The above charts show TRX (Tron) and BNB (Binance Coin) side by side, in what I believe to be distribution ranges after breaking uptrends. Distribution is how these players achieve profit (selling to prospective buyers). I think they will eventually break down massively. If they do not, it means the infinite money scheme, despite its glaring obviousness, has continued to work. All eyes are on them now, so there may be a limit to what they can accomplish now. This is why I think it's very important to pay attention at this moment.

Yesterday, I noticed enormous stablecoin outflows from Binance to Coinbase. These were mostly USDC, which is recognized as legitimate in the United States. My speculation is that Binance and other players in the crypto cartel are extracting capital from the markets using liquidity generated by artificial/counterfeit stablecoins, such as USDD and BUSD. USDD is the stablecoin on the Tron network, while BUSD is the stablecoin on the Binance chain. The collapse of FTX of course was probably inevitable, and CZ knew this. In order to distract the market from the larger scheme, he appeared as a "white knight," or a person who appears to come to the rescue, but is only serving self-interest. He is a wolf on the hunt, not a white knight, and certainly not a sheep. CZ (Binance) likely had no intention of buying out FTX, and used the liquidity generated from the pump to dump BNB on the open market. In a similar move, Justin Sun (Tron) allowed some funds to be withdrawn from FTX through the TRX network. Why? It benefits token values and allows for exit liquidity. However, this is merely forced demand. If Binance monopolizes the crypto space, they have cornered the market. This is clearly not decentralization.

Now, let's say Binance and other exchanges hope to keep running. What do they need? Buyers. By the very nature of the speculative market, no single player can admit that things are going wrong, or that things have little intrinsic value. If they do, prices will be sent cascading lower in the blink of an eye. Instead, it needs to be a slow unwind. That's why the above charts are significant. At any moment, they could meet the same fate as LUNA or FTT. This is because I think it is very unlikely the crypto market will attract the authentic buyer liquidity required to keep Bitcoin miners afloat and the cartel running. Eventually they will need to decide enough is enough. I think CZ's "white knight" behavior may, in hindsight, be the signal.

Will they get away with it? After so many billions extracted, one must wonder - where is all that money?

This is my opinion, and not meant as financial advice. This is meant for speculation and entertainment only.

-Victor Cobra

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Edit: I will add, as a commenter pointed out below - BUSD is indeed regulated in the U.S. and supposedly backed 1:1. I'm also not saying what I've written here is precisely what I think the truth could be. There are elements here that may be close to the truth, but at the end of the day this is entirely speculative. Nevertheless, it's fun to speculate :)

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Interesting that BNB has dropped today while TRX has seen some small upside. These guys moving things around in the wake of the SEC news against Paxos and BUSD.

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I think it's a matter of WHEN not IF we see BNB sub- $100. Very interested to see how this all unfolds over the coming months. A "slow unwind" indeed.

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Closing the week below support here can easily send BNB back to $180 in a flash.