Crypto Trading Chaos: Predicting Zeros and When to Walk Away

Market mayhem hits digital assets as traders face ultimate volatility test

PREDICTING THE UNPREDICTABLE

When charts resemble seismographs during an earthquake, even seasoned crypto veterans question their strategies. The current landscape isn't for the faint-hearted—massive gains stand alongside catastrophic zeros.

RESULTING IN REAL CONSEQUENCES

Portfolios either moon or get rekt, no middle ground. That 'sure thing' altcoin? Either rockets past ATH or joins the graveyard of forgotten tokens. No second chances in this arena.

ZERO HOUR DECISIONS

Smart money knows when to hold 'em and when to fold 'em. Sometimes the best trade is no trade—watching from sidelines while leverage junkies get liquidated. Preservation beats desperation every time.

WHEN NOT TO TRADE

Emotional? Sleep-deprived? Chasing losses? Step away from the exchange. Crypto markets never close—opportunities circle like sharks 24/7. Missing one pump beats becoming exit liquidity for whales.

Remember: Wall Street bankers still don't get it, but they'll happily charge 2% management fees for your 'protection' while crypto does the work.

This probably means that prediction markets have evolved from being a once-every-four-years novelty to a constant source of information. Possibly on everything. 

Case in point: People bet $1.4 million on a Kalshi market predicting what Jerome Powell would say in his press conference yesterday.

FOMC press conferences are pretty staid affairs — if people will bet on that, they’ll probably bet on anything.

I suppose that’s a good thing, because even the most obscure bets can be informative. 

Alex McCullough found that “the least liquid markets, with under $1K of total trading volume, achieve a good [Brier] score .1226 at time of writing.”

I have no idea how that could possibly be — but I guess it means there really is a 7% chance a large meteor will hit earth in the next two months.

(Down from 18% in June, mercifully.)

Over 90% of the TRUMP Organization’s earnings in the first half of the year came from crypto, Reuters reports.

Counting only realized gains, they conservatively estimate the president’s sprawling corporation earned $802 million from crypto projects in just the first half of the year.

Earnings from everything not related to crypto added up to just $62 million.

Most of it came from just two projects: $463 million from sales of World Liberty Financial tokens, and $336 million from sales (and maybe trading fees?) of the Trump memecoin.

Neither of those tokens has any claim on earnings or assets — WLFI is effectively a non-dilutive equity and TRUMP is a collectible.

So the $802 million was earned without having to give anything up.

Magic internet money, indeed. 

After doing a DEEP dive into Gemini’s S-1, Lee Reiners and Jimmy Lenz question why its stock trades above zero.

“I just don’t see a path to profitability here,” Reiners concludes, “which begs the question why the stock is worth anything at all.”

Lenz agreed: “I cannot figure it out.” 

Ouch.

I did my own analysis of the S-1 and discovered that the crypto exchange is incorporated as “Gemini Space Station, Inc.”

So maybe the investors currently assigning it a $2 billion valuation are mixing it up with SpaceX?

Stranger things have happened.

(In crypto, every day.)

Barron’s reports that US equities are likely to be trading 24/7 as soon as the second quarter of next year.

If so, I think it’s a terrible idea because nothing good happens after hours. 

For many years, trading volumes on US exchanges have gravitated to the first and last five minutes of the trading day, for the simple reason that liquidity seeks liquidity. 

Nearly all orders are executed by machines now, and machines, knowing they have no short-term alpha, mostly try to minimize their price impact. 

They do that by trading whenever there’s likely to be the most liquidity.  

If you don’t have short-term alpha (and you almost certainly don’t), you, too, should trade whenever everyone else is.

That will not be nights and weekends.

Crypto has conditioned people to think trading should happen on nights and weekends because important things sometimes happen on nights and weekends. 

But one thing I learned from many years of trading stocks (often before and after market hours), is that you will almost always get a better price by waiting for the market to open.

There are some good reasons for why stocks should be tokenized, but trading them 24/7 is not one of them.

Thinking otherwise is a behavioral-finance illusion.

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