Why I now feel crytpo must be strictly regulated, as soon as possible, and why you should too.

Applies mostly for the US.

When you buy and sell stocks you declare realized gains and losses. Now, if you sell a stock and immediately re-buy it, you trigger a wash sale. Day traders do stuff like this, but as we’ve all heard many times, most traders lose money.

Institutions can’t (probably do, but aren’t supposed to) collude or blatantly manipulate the market. However, as I understand it, nothing prevents retail or institutional whales from flipping constantly, all day, every day, and automate the whole goddamned thing. They can be making millions in their sleep by manipulating the entire crypto market and there is currently absolutely nothing preventing them from doing it.

In order for me to become a millionaire, I need to put a significant amount of money in a brand new project and hope it becomes the one in a thousand that doesn’t zero out. The probability of a project going 1000x in the short term AND I bought in early AND I had the confidence to drop $1,000 into it on day 1 AND it doesn’t have liquidity issues so when I do try and sell I actually get my million….. small. The probability is very small.

Now, MATIC shifts 10% in a day is no big deal if you own a few hundred bucks worth. But what if you had $10,000,000 in it? Million bucks in a day. No need to Hodl. Just buy, wait a couple of days, take a nice 5-15%, drop everything, market sinks, buy it again.

You get 1 institution playing that game and they’re netting a BILLION a year by tossing around 30M and using a rudimentary algorithm. You get 5, 10, 15 institutions all doing that at the same time? Retail investors are Fucked Forever.

That’s why I’ve decided that we need real regulation. Sure, the regular stock market is also stacked against us and shady shit happens every hour. But at least there is the appearance of rule and law. Here, we have absolutely no protection at all.

Positions: own like 13 projects and every single one of them is in the red.

Edit: I didn’t change my mind because I got “rekt”. I’m holding long, 3-10 yrs. I changed my mind because I watch every project move up and down in total unison every hour of every day but it doesn’t exactly follow the equities markets.

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15 thoughts on “Why I now feel crytpo must be strictly regulated, as soon as possible, and why you should too.”

  1. Basically

    Dont regulate me when I’m going up, I don’t want to cap my gains

    Regulate me when I’m going down, I want to minimize my losses.

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  2. Just remember the regulations you want isn’t the regulations you will get..

    The regulation they come up with will benifit the powerful and rich, and hold back the poor..

    Think hedgefund/banks vs individuals.

    You want every crypto wallet legally be required to have a tax number and a ID/KYC linked to it.. This is how you get it.

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  3. Turning $1,000 into $13,000 is still an accomplishment …. scale of money makes an obvious difference in the return … but the rate of return is the same no matter the scale of money

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  4. While trading is very frowned upon in this sub, all it takes to make a million from an investment of $100 is to make an overall gain of 2% roughly 404 times due to compounding growth. Take that for what you will.

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  5. >However, as I understand it, nothing prevents retail or institutional whales from flipping constantly, all day, every day, and automate the whole goddamned thing.

    Yes. It’s called high frequency trading & front running. Been happening since probably you were a wee lad. It’s not just crypto my man.

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  6. What kind of regulation are you looking for?

    Fraud laws are already on the books.

    Wire fraud laws are already on the books.

    These coins tend to be incorporated, so corporate laws are already on the book.

    Fiduciary laws are already on the books.

    What regulations DO NOT EXIST at the time that should be there, and won’t contribute to crony enrichment?

    The answer is: NONE.

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  7. lol crazy how people switched up to wanting regulations after they got rekt.

    In the Wild West, you win some you lose some.

    In “civilized” world, people with money make rules on how people can make money, but the rules don’t apply to them.

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  8. > In order for me to become a millionaire, I need to put a significant amount of money in a brand new project and hope it becomes the one in a thousand that doesn’t zero out. The probability of a project going 1000x in the short term AND I bought in early AND I had the confidence to drop $1,000 into it on day 1 AND it doesn’t have liquidity issues so when I do try and sell I actually get my million….. small. The probability is very small.

    A huge problem with crypto is that you can quickly create projects out of thin air and take advantage of fully starting from zero for more volatility to create an intense pump and dump, often while also hiding the people behind it. During bullrun hysteria it’s just a matter of paying celebrities for advertisement that you’re bound to create hype for the pump and dump.

    The lack of proper precedent and regulation gives much more room for those people to label their pump and dump schemes as incompetence and things getting out of hand instead of fraud to get away with no punishment.

    From a real business side though, you just have a lot of steps in the IPO process that forces the executives to expose themselves, they’re held a lot more accountable for fraud and they have minimum standards to uphold. You also need to build structure, build a product or a service and get revenue.

    Honestly, acting like basic regulation is as bad as this is just being disingenuous. Regulations pretty much never fully solve the problem and tend to favor certain people more, but they do create a minimum standard that makes it much harder to legally scam a person like this.

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  9. Don’t get me wrong, I agree with the need for regulation but institutions messing with the market really only affects the short term. If you are holding long-term, it isn’t as big of an issue.

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  10. You do not need to “regulate crypto” you need to “regulate traders”

    As long as billion-dollar-companies can pump and dump the markets with no repercussions, nothing will change.

    There is no regulation needed “for crypto”… there is regulation needed for people and corporations.

    All the SEC would have to do is declare that all companies and individuals bound by SEC-rules on stocks are also required to follow them in all other assets.

    We can have national liability without any individual government regulating crypto as a whole.

    We do not need governments to tell us how crypto should look like, we need governments to agree that fraud is fraud, no matter where it happens.

    Reply

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