Corps are going to panic buy on leverage and blowup, become forces sellers. FTX leverage just on the corporate level.
Discussion
interesting hypothesis. I think you have to factor dollar weakness into this. If the bond market imploded, where will these companies put their cash as they sell? Most companies have treasury requirements.
The govt is ramming through stable coin regs to get cash deposits to defecto buy bonds. All the stable coins buy treasuries (largest buyers of govt debt). Harvest public deposit accounts to support the bond market.
Seems like nostr:nprofile1qqsyx708d0a8d2qt3ku75avjz8vshvlx0v3q97ygpnz0tllzqegxrtgppamhxue69uhkumewwd68ytnrwgqs6amnwvaz7tmwdaejumr0dsxxn50k did an analysis that shows it won't be anywhere near enough to support the treasury market.
It won't be enough, just a last ditch effort to keep the ponzi going.
We're entering a two tier economy; those with bitcoin and those without.
Oh, I completely agree with you on that. I'm watching everything get cheaper around me while everyone I know worries about inflation. At some point they will get locked into a digital dollar with no exit route.
Smart companies and people will buy btc but everyone in between will get forced into dollar tokens to bail out the govt.
I agree (if you look at Japan) that they will use leverage. But something else has to trigger a crisis for them be forced to sell. People have been saying this about Strategy for 5 years, and there's no evidence they will ever be forced to sell.
What I would be more worried about is something happening at Coinbase.
I think the forced selling will just come from the extreme volatility as we achieve exit velocity. Fiat is depreciating so fast at this point that debt becomes and asset. Debt becomes the liability of the ISSUER.
There won't be the liquidity for public companies to access debt at all.
Interesting. Something to watch. We'll see, though, if Sailor is right about the end of massive drawdowns. I don't know enough to know for sure except that I've lived through all of the drawdowns since 2017.
There will be extreme rips and extreme drawdowns.
95% of the system is just numbers on the screen. The 5% is actually cash deposits that can move into BTC. That 95% is never going to get into the new system. It physically cannot because there is no liquidity to support their exit. Almost all of the cash that can make it into bitcoin is already there.
At a certain point, it won't matter how much cash can get it. Either the dollar will die, or we'll get a cbdc that can't be traded for bitcoin. Then, companies and individuals will start trading equity and assets for bitcoin, and that will support the price.
Their best route to control this thing is the drain the spot market completely, kills all the exchanges.
The price setting mechanism then becomes CME futures and "spot" ETFs. Both are cash products that have no settlement to BTC. Same way they controlled the gold market through GLD and silver through SLV. Not sure that will work but that is the playbook.
The problem with that is that if the States continue to decree gold, silver and bitcoin legal tender, they won't be able to control their distribution into the economy, which will increase the demand for them and weaken their control systems.
