The Cryptocalypse Is Coming

Prophesying how the apocalypse of avarice will play out this time.

On the final day of the first third of the 6th month of Our Year Of The Coin 13 (2022 C.E.) The Oracle of Tulips revealed a prophecy about cryptocurrency’s end of days to Michel de Cryptadamus who then inscribed its words into the hard stone of the subreddit r/Buttcoin. The redditors of r/Buttcoin, long used to playing the part of modern society's Cassandras, with memes in place of their forebear's mantic verse, watched in amazement as these predictions began to come true.

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Transcribed, clarified, and mildly expanded, here are the contents of the prophecy as it was inscribed into The Reddit Stone back in the halcyon era before The Closening Of The Celsius. In the original, the specific events foretold by the revelation were presented as sidenotes within discussion of the omens of collapse. In this document an effort has been to separate Omens from Predictions. Feel free to visit the original inscription.

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OMENS OF THE CRYPTOCALYPSE

℥. We’re running out of fools. Cryptocurrencies are, at their core, just another iteration of The Greater Fool Scam. Because no income is generated by holding Bitcoins, Ethereum or any of the other even more preposterously s, 23% of americans own or have owned crypto already. 64% of americans have basically no assets other than their house. I suspect (but do not know for sure) that the picture is similar in Europe and Japan, the other major pools of world capital. everyone i know under 30 thinks this shit is a total scam (I've been polling informally). In other words: there is no one left to pump money into the ponzi. (as an aside, i like nick weaver's formulation that crypto is a "self-assembled ponzi").

℥. The rapidly rising rate of Inflation means that The Jerome Powell will have no choice but to pull the lever on higher interest rates. “Interest rates are like gravity for the stock market. If interest rates are low the prices of stocks can be almost infinite. If interest rates are high, gravity will pull them down to earth.” - A reading from the teachings of the Prophet Warren Buffett, the Oracle of Omaha.

℥. Large amounts of new buying pressure have entered the market and the price is not going up. As people flee shitcoins they are buying bitcoin in what they perceive to be a "flight to quality" - the same reason US Treasuries and gold go up during market crashes. Have a look at the shitcoin market; it's getting hammered. everything down 10-30% in 24 hours. It is reasonable to assume that a lot of the buying power that could be pushing up bitcoin is probably pouring into BTC/ETH already from the shitcoin market liquidations. the fact that even with that upward pressure on the price of BTC and ETH (AKA "quality"... lol) we are still seeing this much of a slide means that the selling pressure must be... intense. Now imagine what happens when that support ends because the shitcoin capital has been totally drained out of shitcoins and into BTC/ETH (at least whatever shitcoin capital wasn't just flat out stolen by the scammers who issued the shitcoins) ... all you will be left with is the collusion of the whales trying to keep the price up. sure there will be a bunch of financial suicide bombers HODLers shouting "YOLO" as they ride the bomb all the way to the ground, but that's an insubstantial amount of capital now that they've been rekt by tesla, shitcoins, gamestop, and whatever other bad bets these market actors seem to determine to make (and with leverage!)

℥. Tether (USDT), the primary currency used in the cryptocurrency markets, is a fraud and could stop redemptions at any moment. Tether is in the running for the largest financial fraud in the history of our great species. at that point: ka-boom. you can't blow a $60B hole in a $1.3T market and expect that market to survive... but it's even worse than that, because 70% of all crypto trades are done with tether's imaginary tetherbeans. /u/peerchemist did an excellent blow by blow writeup of how that might play out on medium so i won't go into the details, but the tl;dr is that w/out tether liquidity will vanish, and when liqudity vanishes and there are literally no buyers, prices collapse and panic sets in.

• [UPDATE] One of the few things we know about Tether's disappearing $72 billion is that they lent at least $1B to Celsius. See #5 above for how that's going. I have a hunch it's a lot more, but they admitted to at least $1B. Their total equity (assets minus debts) is less than $200M. Billions are much bigger than millions, so at this point we can be certain that Tether is insolvent. That in turn means that whoever tries to pull their money out last is going to be hit with a 100% transaction fee. This state of affairs is how bank runs get started. This will be the first global bank run.
  

℥. Microstrategies and its CEO Michael Saylor (AKA "Chief Kookbabbler”) represents a concentration of systemic risk that is new to cryptocurrencies. Michael Saylor, for those who don’t know, basically turned his flailing business intelligence company in to a Bitcoin holding company, taking out enormous loans in order to buy Bitcoins. Check here if you want to know how that’s going for him (hint: not so well). At some price point MicroStrategies will have to hand over several billion in BTC to their bondholders, who will liquidate it. i have read several different takes on what that price point is. Here's one from MSTR itself. given that Michael Saylor probably only escaped being jailed for financial fraud in the dotcom crash because 9/11 changed the priorities of regulators, you have to take his numbers with at least a grain of salt. personally i would use a whole shakerful, maybe more. Other journalists have reported trigger prices of BTC $13K and $21K. Wherever the price is, the most important part is that there is now a price at which massive liquidation will be forced by bondholders bearing contracts that enforceable in the real world. This kind of systemic risk is new to Bitcoin.

℥. At least some of the whales rats are already colluding to prop up the price. they are already obviously doing this - have you looked at a graph of the price of BTC for the last 30 days recently? i've never seen a chart so obviously flat on the bottom. while price manipulation is not exactly anything new to the crypto markets - Nasdaq reported on an analysis that claimed north of 90% of the trades reported by the exchanges are fake as recently as Dec. 2021. what is new is that there are some folks who have a lot riding on the price of BTC not hitting certain benchmarks (more on that later).

℥. Celsius has collapsed (even if they haven't admitted it yet). That's just the first domino. Beyond the current outflows, We already know at a bare minimum a) Celsius lost 35,000 ETH to a hack and b) they lied to their customers about it. Redditors are even raising the alarm in r/Bitcoin (AKA "The Church of the Financial Suicide Bomber HODLer"). Celsius collapsing will start a domino effect.

• [update] Since i managed to get this post up on Reddit just a few hours ago Celsius has officially collapsed and is refusing to return any remaining depositor money to its clients.
  

℥. The cryptocurrency markets are all deeply interlinked in a way they were not in 2018's crash. Since 2018 Crypto bros have rediscovered the very weapons of financial mass destruction that almost blew up the world economy in 2008. Credit derivatives, futures, swaps, and all the rest mean that all the cryptocurrencies are tied together in a way that is new

℥. The large number of obvious price deformities in the crypto markets right makes it clear that the market has not priced in the risks. As an example right now there is a parallel situation with stETH and ETH de-pegging. WTF is a stETH you may ask? Without going into the grimy details stETH is a magic bean box that contains another magic bean called ethereum. you cannot open the magic stETH box for 1-2 years. stETH is supposed to be worth 1 ETH but... it's not. stETH looks basically like a futures contract, so it's worth what the market perceives the value of the ETH in the box will be 1-2 years from now and... stETH is currently trading at 95% of an ETH. Why? because the whales dumped all their stETH on retail bagholders in the last 72 hours. which tells you all you need to know about what some of the whales think about the future price of ETH... (as far as the morality of dumping your soon to be illiquid assets on retail suckers, see my comments about rat whales in #3). incidentally this stETH situation was one of the top 3 stories on bloomberg yesterday. literally every money manager in the world now knows about "staked eth". what a waste of brain space.

THE FORETELLING OF FUTURE EVENTS

⧗ The most important event in the unfolding of The Cryptocalypse run will be The Closening. The moment a small/medium sized business crypto business closes its doors, takes the money, and runs, leaving even the people who thought they had safely exited by turning their BTC magic beans into USDT or USDC magic beans with absolutely nothing will be pivotal¹. Such an event will demarcate a shift to the next phase: The Fear. As a domino effect claims more and more businesses, larger and larger entities will succumb, leading to more fear, and so on in a vicious cycle.

⧗ The Fear will give rise to The Whale² Wars. Sadly for the whales rats no one in the world is rich enough to prop up a $500B market in free fall. Every minute the whales continue manipulating the price they are burning actual capital (the so-called demonic "fiat" us mere mortals use to buy our Chipotle). I've tried to build some financial models of the whale burn rate but given the uncertainties i don't want to claim i have a good answer... but there is definitely a burn rate, so the famous economics quote "Things that cannot go on forever, will stop" applies. As a more concrete data point, consider that on Friday the S&P was down -2.9% but BTC, a highly correlated but far more speculative asset, only moved -3.3%. Someone has to absorb that selling pressure. I suspect eventually one of whales rats will look at his dwindling pile of actual fiat currency and realize that the first whale rat to the exit door gets to keep the billions and the rest will be left holding the bag. being a whale rat, he (trust me on the pronoun) will make a break for it. when that happens we will see total collapse of the price because, being whales rats, they will all turn on each other in a desperate scramble for a rapidly shrinking exit.

⧗ The War of the Whales will eventually end in The Panic. Some seres of events will knock the price low enough to start a chain reaction of automated liquidations. This will eventually escalate into panic selling - people scrambling to get anything before the price hits the ground.

HOW SHALL WE KNOW THE Ω?

Two ways.

1. The Oracle Of Tulips revealed all this in a divine vision.
   

2. This is how almost all economic manias in history have lived out their last days and there is nothing to suggest that this one will be any different.

1. And if it happens on a weekend it will be worse. You can't put any money in an actual bank - like real, fiat money you can pay rent and buy lambos with - outside of banking hours. for instance right now, because it's the weekend, all these magic beans are trapped in the magic bean factory... and at least some corner of the bean factory is kind of on fire. a few weeks ago when i got serious about paying attention to this crypto monstrosity i was talking to a fund manager about the situation... he pointed out something i would not have thought of: if the collapse starts on the weekend it would dramatically accelerate the ascent to a state of total panic. even if it's not gonna happen this weekend, this is a systemic risk that 24/7 trading w/out the kind of circuit breakers used in NYSE/Nasdaq will continue to create.

2. “Whales” in the cryptocurrency mythology, are a particular kind of douchebag whose wealth stems from sheer luck, their skills as a con man, or both.