Crypto Basics

Why a single whale can move the entire crypto market

A whale is a real structural problem. The Financial Times estimated that whales control roughly a third of the Bitcoin supply, at times around 37 billion dollars. When one address moves that much, no order book can absorb it, and you see the seemingly reasonless candle that wipes out your stop.

• Sharp price crashes often trace directly back to whale selling.
• At the top you are frequently buying from whales who are unloading.
• The answer: stay small, stay survivable.
• Barbell: keep the bulk of your capital safe and off the exchange.

Stablecoin, depeg, and the Terra-Luna lesson

A stablecoin is only as strong as its backing. USDC holds one real, monthly audited dollar for every token. An algorithmic stablecoin props up its peg only through a mint-and-burn mechanism, not through real money.

TerraUSD was exactly that kind of case: on May 7, 2022 the peg broke, fell to 98.7 cents, and the collapse wiped out roughly 60 billion dollars.

• "All funds are safe" is often the last warning before the collapse.
• Distrust charismatic frontmen who mock their critics.
• A depeg is not an edge case, it is a recurring crypto event.

Halving and unit price: what the coin price hides from you

The halving cuts new issuance roughly every four years: until May 2020 about 1,800 BTC per day, then 900, and since April 2024 only 450. With just four halvings the data set is thin, and a guaranteed pump does not exist. The halving shapes sentiment, not a certain price target.

• It is not the unit price that matters, it is the market cap.
• 2 cents is not cheap when the cap runs into the billions.
• Stock-to-flow ignores demand, NVT is circular.
• HODL does not work with leverage: you get liquidated first.
• Cold storage keeps coins offline, any exchange can go bust.