Comment by csomar | Hacker News Reader

Comment by csomar | Hacker News Reader

I'd be very careful to take advice from this guy.

1. He's definitively bad at investing. He doesn't have an investment strategy, and probably never heard of portfolio re-balancing.

2. He got in lucky and made some good returns. Now he thinks he is a genius because of that, and as a result can predict the next market move.

3. He didn't do good market research. For example, most of the volume in USDT is faked by the exchanges. Coinbase, GBTC, and CME each one of these is are probably bigger than USDT in size and volume. Unregulated derivatives are an alternative to USDT for more sophisticated traders and they are also huge.

4.USDT is now also used outside of the crypto-market. Not because it is great, but because of the practicality. This offshore unregulated market of USD is worth in the $ trillions. USDT having a market cap of a dozen billions is really peanuts. That being said, I'd be more interested in an investigative journalism on how Tether has succeeded in moving such amounts of money while avoiding all the KYC bonanza a regular joe (or business) has to go through.

Hi, I'm the author.

> He doesn't have an investment strategy, and probably never heard of portfolio re-balancing.

This is perhaps a reasonable inference to draw based only on the information in the article, but it is incorrect. Without going into too much detail, the missing context is that I have effective long exposure to certain markets through my ownership of founder stock in a startup that operates in those markets. And while I place a high expectation value on that stock, it's also illiquid and can't be easily hedged. For reasons I didn't go into in the piece, I believed Bitcoin would also serve as a partial hedge for that market exposure, which justified a higher allocation than one might naively expect.

(I'll also observe that portfolio rebalancing isn't the right decision in all situations. Startup founders rationally concentrate their net worths into their companies, which is justified by their overwhelming informational advantage.)

> He got in lucky and made some good returns. Now he thinks he is a genius because of that, and as a result can predict the next market move.

I agree with the first sentence. I would strongly dispute the second. It's precisely because I don't think I can predict what will happen next that I've zeroed my exposure to this entire ecosystem.

> He didn't do good market research. For example, most of the volume in USDT is faked by the exchanges. Coinbase, GBTC, and CME each one of these is are probably bigger than USDT in size and volume. Unregulated derivatives are an alternative to USDT for more sophisticated traders and they are also huge.

I'm aware of these claims — there are rumors of wash trading by the big unbanked exchanges that I consider quite credible. I didn't include those in the piece because I wasn't able to find confirmatory evidence in the time I'd allocated to research it. I would be extremely interested if you could share any evidence you may have collected about these claims.

I like your style. Off topic question: why are you so absolute in your investment decisions? Can’t predict what happens so you totally exit? Thought you had figured out some inflation dynamics so you all-in BTC?

I’ve lately decided I need to be more moderate in my investing to avoid quagmires of conflicted indecision.

I think I agree with most of your points. I actually wrote an article about Tether in 2018 on a major investment site.

I believe Tether is organized crime and would love to see a deep investigation into the lifestyle and finances of everyone involved.

Thing is, right now, we know that more bitcoin are being purchased with REAL dollars than are being minted. So, the market has support. Yesterday, Grayscale bought 5132 bitcoin. They hold those in cold storage, so, they really bought them. I'm sure paypal, cashapp, square, also bought some.

But NO ONE in the industry has any motivation to question Tether.

The question becomes, how much bitcoin has been purchased by people that might sell it if Tether implodes. I am not sure it is a significant enough amount. Perhaps.

The current chart for bitcoin is extremely bullish. I would guess it moves up from here.

> It's precisely because I don't think I can predict what will happen next that I've zeroed my exposure to this entire ecosystem.

I think, given the context, it was the wisest call to make.

> For example, most of the volume in USDT is faked by the exchanges.

I agree this volume cannot be trusted. Much like the asian volume in 2017 turned out to be mostly fake. I find it hard to believe that Binance got so big so fast.

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