The altcoin crash of 2022 and 6.5 coinbase
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On a cold winter morning in the Southern District of New York, SEC Chair Gary Gensler receives a text message he’s been waiting for. It’s been a year. The judgement has just come back against Rip*le. Their token has been designated a security. The company and its defendants are given 90 days to register with the Securities Exchange Commission. Gensler assembles his team and lets them know that Operation *OP_RETURN* will begin. In a span of 24 hours, thousands of prewritten cease and desist letters have been sent, dozens of calls made to CEX legal teams, several subpoenas have been served, and the FBI is in place ready to raid the offices of Unis**p, Teth*r, and others.
News of the raids break first that Friday, and crypto-assets are on edge. The initial drop is 15%, but prices stabilize until after markets close.
It’s now 4 p.m. and the cost of a single Et*ereum transaction has already reached $250.
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Press drops shortly after markets close. One. After. The. Next.
By 5 p.m. a single Et*ereum transaction has doubled to $500, and most tokens have fallen 25%.
The worst part of the legislation is for stablecoins, and already the other side of the world is wide-awake and selling.
The weakest stablecoins wobble on their pegs. But arbitrage to help stabilize them is useless, it’s too expensive, and transactions too slow. Any dapp planning a rug-pull at any point in the future does it now. Exchanges suspend trading and withdrawals; emergency meetings are called by all of them.
By 7 p.m. a single Et*ereum transaction reaches $1000 in gas, and layer 2 bridges are all down.
Binance International is on the phone with their subsidiaries Binance.US and Binance.UK, making certain everyone is on the same page. An argument erupts when their chief financial officer CZ demands that crypto-assets from both be sent to Binance International to cover some of the liabilities that they have as stablecoin collateralizations are being undone. The call is unproductive ending in legal threats from both sides.
Con-men like Brad Garlinghouse or your favorite YouTube shill are busy on Twitter denouncing the SEC’s actions. Brad has his assets frozen, passports flagged, and reputation flushed one final and permanent time.
Any CeFi or CEX that offers APY on deposits, dump their rates to 0%.
By 9 p.m, media in Asia is running wild with it. Most altcoins have cratered 50% and a single transaction on Ethereum has peaked at $1250, trapping the most vulnerable people as the reactor melts down. Cries for centralized behavior and a centralized savior predictably ring out:
*“Isn’t there a way we can shut down or reset the system?”*
*“Where’s Vitalik? We need his help and to explain what the hell’s going on ASAP.”*
All the gambling junkies masquerading as investors also look for scapegoats to pin their choices on–elaborate conspiracies never more welcome:
*“Worst President of all time.”*
*“Soros!”*
[George Soros](https://ift.tt/3EgteBI)
The meltdown continues. Non-fungible tokens can’t find any buyers, regardless of what double-digit percentages keep getting knocked off their ask.
The weakest stablecoins have lost their pegs, crashing to pennies. These undid collateralizations, which undid their collateralizations, which undid…the chain reaction is almost complete hitting even dapps once considered safe. In the end, it was all a collateralized Ponzi scheme. Everything secured by?
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Early the next morning, the only stablecoin to survive is US*C, which has broken beyond arbitrage and trades at a staggering premium of $1.85, which is dangerous as the boomerang of liquidations in the opposite direction will follow eventually as it falls back to $1, but for now what are the safer alternatives? Only wrapped bitcoin, but smart money already jumped on that, and there’s few of them left, and for the ones that are left, their premium is rising quickly. Et*ereum has cratered to $1600 with fears that a move below $1000 is inevitable. Those fears are well-founded. The US dollar is flexing its dominance…but so is bitcoin.
As for other altcoins, things are no better, maybe worse. Charles Hoskinson’s social token that tracks his YouTube career (starts with and ends with an *A*) is under .50¢. Meme coins are quickly returning to their shitcoin roots near or under one penny. So*ana meanwhile, has leveraged its centralization and shut down, re-booting every so often when the developers get calls from their venture capital friends. Most alts will never be heard from again.
CEX’s remain shuttered until the bottleneck of transactions clear the mempools. Their accountants are going over the damage, and their insurer’s have sent actuarial teams to look over their shoulders. Some CEX’s have lost their own stablecoins. The smallest CEX’s around the globe have gone dark. But all of them are sitting on enormous losses. Their large expenditures and foray into the Proof of Work node and shitcoin business have not paid off. The stock price of the largest one gets obliterated in the open market that Monday.
But what’s that noise? The *brrrr* of an ASIC is what it is. For what money has fled to safety? What money has come to the asset declining the least? Smart money.
[Daddy](https://ift.tt/3Fe6pjG)
Every 10 minutes a block is mined producing a 6.25 BTC coinbase reward. It’s business as usual for the bitcoin blockchain, and in the midst of the crypto route, bitcoin pivots, gaining dramatically, reasserting its dominance in a way not seen since the second Obama Administration. This was inevitable.
In the aftermath, alts lose 50%-90% of their value. Et*ereum bottoms at $900 and now trades at $1100, stuck in a limbo as its own developers have been served subpoenas. It will never rise again, its tokenized orgy of swaps, wraps, burns, mints, and stakes…effete. Its dapps that did nothing but optimize token interactions to keep the orgy going suffer a similar fate. Soon scriptless script comes, as does Zk full composability, and this technological independence ushers in the Decentralized Autonomous Organization era, these dumping their L1 taxation into Boston Harbor, and placing bitcoin in their treasuries instead. This was inevitable. So are the Senate hearings.
CEX’s lose much of their bitcoin business afterwards, and feel added pressure as the Lightning Network continues its parabola of growth with next to zero fees, speed, and instant settlement.
Judgment:
Take your bitcoin off all exchanges and use hard wallets. If you’re in any shitcoins, exit those now. If you use any centralized companies to buy your bitcoin, make certain they deal with only bitcoin, and not shitcoins, and you’ll be just fine. This is where Lightning Apps and places like Swan Bitcoin shine. Otherwise get your popcorn and melted butter ready.
Cryptocurrency
