Intro from Marcel : Hi guys, I've been professionally covering crypto markets for 4y now. Initially, my work was in Portuguese only - yeah, I'm Brazilian. However, the past 15 months working at Cointelegraph as an analyst has allowed me to put in good use the trading skills from 2 decades in traditional finance. Thus, you'll see me covering derivatives markets, institutional investors' strategies, trading tips, and much more. Make sure to follow my work at: https://cointelegraph.com/authors/marcel-pechman
I've started out as a p2p trader in April-2017, buying cryptos at Kraken and Bitstamp and 'reselling' them in Brazil at a premium. Sure, market was hot and there weren't that many sellers around. However, I quickly understood that mining fees were taking too much of my profit, and sometimes buyers had to wait 1 or 2 hours for their deposits. That's when I discovered BitMEX futures. I could simply hold 5 BTC and simultaneously short the perpetual contracts for 5 x 10k = $50k. Therefore, all I had to do was deliver BTC from my cold wallet, and buy back the futures. No more depending on exchanges regularly sending me Bitcoins. ps: if ANYONE is not familiar with perpetual futures (inverse swaps), let me know now and we'll dive into it !! After some wins and loses, probably losing more than winning, I ventured into the ‘safer’ space of Deribit Bitcoin options, which provides a way for traders to create strategies with limited downside and zero liquidation risk. Again: if you guys are unfamiliar with call (buy) options and protective put options, just shout anytime and we'll cover the basics as well
Question from @FishinFunds#4246 : Greetings, Marcel. Will this Friday's dump be a good entry point for long term investment? Or will there likely be even better times later in the year?
1st of all, I don't know how u concluded that market would dump on Friday -- the $6 billion options and futs expory. As my latest article shows (link above), over the past 5 quarterly futures and options expiry there was only one evidence (March 2021) of dumping activity followed by a recover over the next couple of days. Traders tend to have a short-term memory, so that’s what has ‘sticked’ to their brains, but no such evidence was found on the remaining 4 instances. In Fact, March 2020 shown a reverse pattern as the market pumped 12% ahead of the expiry, only to drop 11% couple of days later So to answer your question: Good entry points happen when longs are hurt (low funding rate), overall sentiment is bearish (likely after a 40% crash in 7-30 days), and FUD dissipates. FUD is not necessarily LIES or false news! This whole China thing, for example... who knows how long is gonna take for miners to set up shop again? What about the OTC banking accts closed? They might need 1 or 2 months to find new vehicles, perhaps via Singapure or HK... so until the FUD dissipates entirely, we could continue ranging from 28-36k, or even LOWER if U.S. regulators decide to trow us a curve ball as well
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Question from @dh12#0217: when do you think Tether will lose its peg for good?
For those following my work from 2018-19, I've first started to deep dive on Tether, and found out that Bahamas (island) did not have enough foreign-currency bank deposits to support the $7 billion inflow that Noble Bank said Tether was holding. From that point on, I knew there was something 'fishy' on Tether, but then again, they could have bought commercial papers / debt from other companies, so not really holding cash & liquid assets. Fast forward to 2021 and iFinex (tether+Bitfinex) admitted to DOJ that they were not fully backed, and lied to clients... but promised to ammend, do some quarterly reports on their assets, and paid the $19 million fine. BUT, that keeps the heat from NYAG from them, not from U.S. Federal regulation, or any other company/individual that might have been harmed. Newly elected U.S. FED + Treasury staff have been issuing DIRECT statements urging more regulation on stablecoins, cryptos and exchanges... so I would not bet AGAINST this force. Sure, Coinbase has money, connections, Ripple hired the entire former OCC/SEC staff, but those are 2 or 3 companies lobbying against the whole banking industry.
But what is the endgame for Tether? BitMEX CTO went to jail for a couple of days, Arthur Hays also had to bailed out. Did BitMEX halt trading / withdrawals? NO We could see a similar thing happening at iFinex. Bitcoin markets do NOT depend on Tether. Market makers do. Bitcoin is not 'backed' by Tethers. Tether holders P/L is. Even if Binance, OKEX and Huobi somehow hold Tether on their own balance sheet, what do Bitcoin and Ether traders have to do with it? If anything, when Tether moves to $0.70, there will be desperate people trying to get rid of it... and buying USDC, BTC, ETH, whatever... so crypto prices should immediately move UP, not collapse ... and if some DeFi pool or exchange collapses because it was holding Tether on their balance sheet, lesson learnt. Not your keys, not your coins.Guys, do NOT hold Tether for longer periods than 1 or 2 days. Not worth the risk if there are so many other stablecoins out there. USDC, BUSD, PAX...
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Question from @Wrong_again : You have been through a couple of cycles. Where are we in this cycle? And.. Where are we overall as far as Crytpo\blockchain adoption overall?
good question. It seems we've NOT reached the 'chasm' yet.Why? Because UX for using crypto, lightning, DeFi is terrible. Normies will never do it. Sure, El Salvador adopted BTC. MicroStrategy and Tesla hold BTC on their balance sheet. That's what? 2 companies of the S&P500 or Rusell2000? C'mon. It's nothing . don't base your short-term trading (0-90 days) on something that happens every 4 years (halving). Those longer-term trends have NOTHING to do with short-term trades. Did you know that BTC rallied 45% in April-2018? Or 60% in Feb-2018? People call it "bear market".Either your are a short-term trader or long-term investor. You can't do both using the same portfolio, at the same time. Maybe save 50% on a cold wallet, and the remaining 50% on hot wallet/exchanges for trading.
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Question from @Wrong_again: Just did some FA on the FTT token. Would love your feedback. Did I get this right? 70% in top two wallets. (I assume FTX\team member wallets) Team members tokens locked until May of 2022. FTX ecosystem powered my the FTT token has a lot of potential. Biggest negative: no US customers may hold FTT. Grown potential 2x to3x (not financial advice)
Why can't we compare FTT to BNB, for example? Because BNB has an ecosystem 'outside' Binance exchange. Even if the exchange is gone for good tomorrow, there would still be demand for PancakeSwap, for example. Right now, Ethereum network does not handle the volume when market is 'hot' and fees skyrocket. Binance Smart Chain 'cloned' the ERC-20 and EVM, and gave them a POS network... so it's very easy for dApps to migrate, or even worse, interconnect. So BNB token still depends on Binance exchange, not saying it doesn't.... but there's a path for its growth outside of it. Meanwhile FTT token still hasn't found a single use outside FTX echange. Who knows? Maybe he'll force some gaming company to use it. But right now, it's 'riskier'.. So it doesn't really matter is 70% is in lockup, or held on Staking pools. If there's no demand for the token, it will eventually move to zero. FTX has some amazing feats and products, but those can be copied.
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Question from @dev/0 : Can you please explain the call/buy options?
This article from 2020 explains a very simple strategy for those willing to long bitcoin with no leverage risk, using options
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Question from @Wannabe Crypto Trader : "Hi Marcel, how do you see the future of DEX vs CEX and which one will come out ahead"
Good question. I think, in the long-run, DEX will win, no doubt there. But for now, most of the investment funds that I know measure their profits in USD. Therefore, there will be a need (and volume) for CEX fiat-habilities. However, 94% of the population is not familiar with MetaMask and stuff... so I doubt DEX will pick up over 40% of the 200 million crypto-traders community, at least until it has a much better UX. short answer: DEX has its own audience/market share, they do not compete (right now)
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Question from @Shayan Neherali : Do you think other Networks competing with etherum for technology will be effected greatly when ethereum comes out with its staking in 2022?
Ether is (almost) a scam. They promise one thing, underdeliver, than they change the promise entirely, and never fullfill the first one. Having said that, I do think competitors will eat Ether's lunch... and ETH 2.0 will take longer than expected, mostly, because all dApps need to upgrade their code to use sharding... and no one wants to do it while there's $10 billion staked already. BSC had 40% DEX volume for a week !! BSC was created 9 months ago. Ps: I do NOT believe in 'staking' ... sure, you can be a 'network validator' and get paid for this 'job', that's one thing. The other one is simply issuing 5% more tokens per year and distributing it to 'stakers'. That's just wealth re-distribution. No coin should appreciate because of that.
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Question from @FireKing : "Hi @Marcel Pechman - what’s the best way to hedge a crypto portfolio?"
Dude, it's the other way around. Crypto (Bitcoin) IS the hedge against inflation. Altcoins are good for short-term trading, or for those that do not wanna risk using leverage and need a stronger upside sometimes. But, if u have 80%+ exposure to cryptos, a good way to make an extra $ is by selling covered calls.
https://cointelegraph.com/news/here-s-how-traders-use-call-options-to-increase-their-bitcoin-holdings Pls have a look at this article. It explains the step-by-step of how to use it.
