Limited means but unlimited dreams of crypto millions! How these new exchanges are aiming to ‘lure’ you into financial oblivion.

Looks like it’s time to dive back into the world of seedy operators, dodgy get-rich-quick schemes and blatant and unadulterated fraudulence.

Oh, sorry, my bad. I misspoke there.

I meant to say we shall look today – at cryptocurrency exchanges.

And that’s because a familiar type of behavior is now emerging across the industry.

At the exact time the history of the 18.6-year Real Estate Cycle suggested it would.

Folks, you really do have to keep your wits about you now in markets.

Today, I will explain why.

And frankly, I don’t like it one little bit. Because I myself know lots of small-scale investors, including my two adolescent children, who will be the type of targets these exchanges are focusing on. These people have limited means but unlimited dreams of quick gains in crypto.

And as sure as night follows day, as soon as we get any kind of burst in the price of bitcoin, the charlatans come out in force to drag people in.

So, what are they up to?

How much potential damage could their activities cause you personally, or your children, or friends and family?

Most important of all, how can you keep them all safe from this?

Let me show you.

By now, if you have been a regular reader of these weekly newsletters, you’ll be well aware of one thing. And if not – you’re about to learn a key lesson.

We have entered what the PSE team likes to term the ‘winners curse’ phase of the current 18.6-year Real Estate Cycle. Now, this means many different things.

What you will see is that risk appetites increase. Crypto exchanges are past masters at aiming their messages on point to exploit this attitude. However, their words betray them, and their actual mission.

According to their websites, Bybit allows investors to borrow up to 125 times the value of their original bet. A “bet” is gambling people, not investing. Those new to all this (and the sole aim of the advertising) see only that a small amount can yield an enormous potential benefit.

Such phrases however always accompany huge increases in speculative credit, which is as mentioned a hallmark of the ‘winners curse’.

Or, in other words, when you think ‘speculative’, think of cryptocurrencies.

And when you think of ‘credit’, think of derivatives.

So now combine the two and you get…

I won’t mince words here. This is extremely dangerous. People’s financial futures have been irreparably damaged by such instruments in the past. Cautious investors? I’d say they are the smart ones, IF they avoid this.

And note the term ‘lure’ in the title. Are these people hunting game or something?

From the above article.

Crypto trading venues are expanding rapidly into derivatives, hoping that tougher regulation and the promise of highly leveraged returns will lure cautious investors into the market.

Next month Dutch crypto futures and options venue D2X will launch while London-based One Trading and GFO-X are both planning to launch early next year.

They will join other new derivatives entrants like the US’s Kraken, which launched a Bermuda-based venue this month, in taking on leaders CME Group, Binance and Bybit for a share of a booming market.

Again, the timing of such announcements isn’t a coincidence. When a market is in all time highs, certainly one as large and prominent as Bitcoin, it makes big news. This year, bitcoin has risen more than 50 per cent.

And when that happens everyone wants a piece of the action. And then exchanges are launched to help them take part.

I mean, at the moment, I can’t even keep track of the sheer numbers of exchanges seemingly popping up at random.

Until five minutes ago, I had never even heard of D2X or One trading. But that’s the space we are in.

But these exchanges are now the main players in the markets because their financial products – various forms of derivatives, such as futures and options – account for 71 per cent of all digital asset trading volumes. Open interest (a measure of trading activity) is now above $40 billion for the first time ever.

You see, what these statistics are really saying is this is new credit being introduced into the financial system simply for leveraging on speculative assets.

And it’s not chump change either.

Nor is it like we haven’t been here before in the recent past. Because where you get derivatives you get frauds, quite often. Let me remind you of the following story.

Ah yes, our erstwhile favorite pantomime villain, Sam Bankman-Fried. Genesis of course was the leading crypto lender behind the above scam.

To explain, Genesis was the crypto lender that collapsed in January and was a key source of funding for Alameda Research, the trading firm at the heart of Bankman-Fried’s alleged theft of customer assets from FTX, which was Frieds crypto exchange.

Through FTX, Fried was offering pre-IPO tokens to certain investors before they launched. These same coins were then leveraged as collateral to access hundreds of billions of dollars’ worth of borrowings. Both are now in bankruptcy.

This is the world you are entering into. This is the level of fraud and corruption that exists to ruin you, not them. And yet, we see now many current and brand-new crypto exchanges doubling down on their business models of creating and then lending money and new credit between themselves?

Why do they now think that average folk have suddenly ignored the risks?

On a macro stage, what precisely has changed?

Clearly something in the background has changed to explain this aggressive marketing of new derivative tools to investors and traders.

And that something is the tougher regulation now placed upon the industry after the Securities and Exchange Commission (SEC) granted approval for the first bitcoin backed ETF to be listed on US equity markets.

This acted as a conduit for small-scale investors (i.e. you and me) to invest in the movement of bitcoin in a very easy and seemingly safe way. ETFs are generally liquid instruments which make it possible to buy and sell your holding quickly.

There are now dozens of these ETFs freely traded across many of the world’s biggest and most liquid share markets. In addition to this driver, there is the small matter of a potential Trump presidency.

Should he be elected, Trump has promised to introduce tax incentives and deregulation designed to make the US “the crypto capital of the planet” and has even ventured into decentralised finance himself by promoting his son’s crypto venture World Liberty Financial.

All of this has put a rocket under the momentum of all crypto related assets. And explains why so many existing and new crypto exchanges are really pushing their platforms and a whole new range of derivative tools to traders.

For you, the benefits appear on paper to be compelling.

Derivatives allow traders to gain exposure to crypto tokens (such as bitcoin and ether) while only putting up a fraction of the cost of buying the token. Recall Bybit allowing investors to borrow up to 125 times their capital.

This means that for approximately $600 down you could theoretically benefit from the price movement of a whole bitcoin, worth $70k.

It makes people who haven’t invested in bitcoin at all so far able to take part for a small entry price. What an offer! If I didn’t know better, I’d take advantage too.

Remember, though, much like the house in a casino, the real winners are always the exchanges themselves. Yes, 125 times your money back on a win sound amazing. The issue is, if you bet wrong, using derivatives means you face potentially unlimited losses. And your losses are the exchanges gains.

It’s at this juncture that I have to simply say one thing. This really is all quite inevitable and repeatable. We have all been here before.

We know how it ends. And it’s never pretty.

Remember, if you’ve leveraged 125 times your capital, or 50 times, or even a “modest” ten times, and the market goes against you you will lose more money than you have invested. In fact, you will lose far more than that.

You really need some help to stay safe.

The good news for you though is this. With just a little knowledge of history, you can stay safe in markets like these and know precisely what the signs are that foreshadow the upcoming bust.

Not just any history mind: it’s the history of the 18.6-year Real Estate Cycle that’s essential.

And it just so happens I know of someone who has conveniently written about all this for you!

From Akhil Patel’s book “The Secret Wealth Advantage” page 189. Bolded text is my own.

The increase in private debt comes primarily from new financing houses…rather than banks. The newcomers are not bound by the same regulations.

Look out for a surge in private debt provided by other financial institutions or shadow banks, offshores banks and personal credit providers.

The above advice is pulled straight from what occurrs at this time in the real estate cycle.

So, whether you’ve been involved in the crypto space for a long time or are tempted by the potential returns on offer, you will need to understand where you are right now in the cycle.

When you do, then you can time the length of your investments and know when it’s time to profit and when it’s time to protect yourself.

So, with luck, you can appreciate just how much debt, right at this volatile and speculative time in the cycle, in the form of these derivatives can actually financially ruin you.

If you want to participate in the most speculative trading activity today, one that will soon be drenched in a flood of new credit, then you can do that. BUT if you do, I urge you to heed my advice:

1. Make sure your mantra is “profit and protect”.  Never stay in a position that’s losing. Get out, take a small loss, and wait to get back in again.
2. Never believe the hype related to anything you are invested in. People will always want to suck your money into something to benefit them.
3. Learn about the land cycle and how it’s key to investing in all markets, including how timing works across the entire economy.

This is what the Boom Bust Bulletin (BBB) is designed to help you learn.

Each month you’ll receive all the latest news and trends as it pertains to the turning of the real estate cycle. Discover the ‘hidden order’ of the economy to develop your unique market edge – one based on over 200 years of land market history and beyond 99% of all market participants.

For just $4USD a month! Incredible value.

This is it, the final push to get all of us completely in the market.

Most people will, inevitably, fall for the spin and fake promises made. Almost without exception, they will be the ones wiped out by the ensuing crash.

Be mindful; always remember where we are in accordance with the timing for the real estate cycle, the same timing the BBB can show you.

An anonymous post from social media read; “Every couple of days they’re like ‘what if we sweeten the pot this way’, ‘how can I get more of your business’… they’re using every lever they can,” said a crypto trader, about incumbent exchanges vying for business.

Profit but protect.

Sign up now.