Shownotes
The coordinated attack on the Terra Luna ecosystem will most likely go down in crypto history as a "black swan event". Thirty billion dollars of TVL (total value locked) have been evaporated in an extremely short period of time and it is disrupting the entire market. Even though we most likely where in the beginnings of a bear market anyways this is certainly accelerating the process.
Where is the market going from here? And how can you handle it?
Let's talk.
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I can be reached by email at mcintosh@genwealthcrypto.com and on twitter at @McIntoshFinTech. My mastodon handle is @mcintosh@podcastindex.social. Looking forward to hearing from you!
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Music Credits
Protofunk by Kevin MacLeod
Link: https://incompetech.filmmusic.io/song/4247-protofunk
License: https://filmmusic.io/standard-license
The following music was used for this media project:
Music: Ethernight Club by Kevin MacLeod
Free download: https://filmmusic.io/song/7612-ethernight-club
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://incompetech.com
Transcripts
Hey, everyone. No one on this podcast is a financial advisor. All information presented
Speaker:on this podcast is for informational purposes only. This is McIntosh. I'm going to be releasing
Speaker:this episode a day early because, as most of you know, I'm sure by the time that you
Speaker:get this, the markets are in a big hot mess. Things have gone downhill pretty rapidly.
Speaker:We're going to be talking about some of that, but I just wanted to get on tonight and take
Speaker:about 15 or 20 minutes, talk about this. I don't have any notes or anything. I'm probably
Speaker:going to skip the news. There have been a few things. The CPI numbers actually came
Speaker:out this morning. They were down just a little bit. It's one of the news items.
Speaker:The big news of the week that pertains to crypto is the Terra Luna situation. In case
Speaker:you haven't heard, a brief overview. We've talked about Terra Luna. We've talked about
Speaker:Terra Luna Labs, Anchor Protocol. This was all developed around an algorithmic stablecoin
Speaker:called Luna. Starting, I think, about seven days ago, I might be off by a few days, but
Speaker:there was a coordinated attack on it. I'm sorry. The stablecoin is UST for the United
Speaker:States stablecoin, the dollar stablecoin. Luna is the token. There's been a very coordinated
Speaker:attack on it. Nobody at this point seems to know who. There's been names thrown around.
Speaker:Feel free to go look that up if you want. There was two corporations actually that their
Speaker:names were called out. They have both denied it. I have no idea. I don't know, but I do
Speaker:know that it was a coordinated attack. The essence of it is that Luna is going to zero.
Speaker:This was a coin. This was a token that was at $120 just a short time ago. Had been doing
Speaker:very well. It wrecked a lot of people. Now, it did not directly affect me personally.
Speaker:I actually don't have any, but for a lot of people, it has made things a very big mess.
Speaker:Bitcoin, one of the things that the Terra Luna Labs has done over the last few months,
Speaker:if I'm not mistaken. I apologize. I don't have notes, so I may be off a little bit on
Speaker:some of this stuff, but I'm doing the best I can. It's 3 o'clock in the morning, and
Speaker:I want to go ahead and get this out for people to listen to tomorrow. Their plan was to buy
Speaker:$10 billion worth of Bitcoin. They bought a good amount of that, several billion dollars
Speaker:if I'm not mistaken, maybe three, something like that. In an attempt to stave off this
Speaker:attack, they've sold all their Bitcoin. Now, at this point, it's way too early to be analyzing
Speaker:what really happened, how the attack was successful, so on and so forth. I might not be the best
Speaker:person for that, but the end result is the market is in an accelerating downslide. I
Speaker:saw Bitcoin, just about an hour or so ago, hit $25,000. It passed. It's been pressing
Speaker:down for days now, and I don't think it's done yet. Now, it went back up to almost $28,000.
Speaker:I think it actually briefly touched $28,000 a few minutes ago, so we got kind of a little
Speaker:bit of a recovery, but the reality is, I don't think it's done. Luna, actually, the Terra
Speaker:Loader token currently sits at 19 cents. The chart, I've never, I've basically, I've never
Speaker:seen anything like this. I mean, I don't know. It's amazing. Actually, just 24 hours ago,
Speaker:it was $5.87. If you go back, click through this a little bit, less than a month, it was
Speaker:right under $100. I thought it hit $120. There it is. April the 5th, 2022. Yeah, April, it
Speaker:hit $116, looks like right at $120, $119. Probably depends on the exchange you're on
Speaker:and all that, but somewhere right at $120. Even on the 4th of May, the price was still
Speaker:$87, and then it started going down pretty steeply. By the 8th, it was at $64. By the
Speaker:not 10th, it was $30, and now it's down to less than a dollar. I don't think that it's
Speaker:going to recover. Now, the founder 24 hours ago was on Twitter saying, hey, we've got
Speaker:a plan and we're going to basically pour more capital into this from some outside investors
Speaker:that they've somehow got to get involved. But I do not think this is recoverable at
Speaker:this point. Now, some other interesting things came out which seem to be solid, and I will
Speaker:say that I've not seen the source of this, but one of the things that came out in all
Speaker:of this is that Doe Kwan, who was the CEO and founder of Terralin Labs, had another
Speaker:failed algorithmic stablecoin, which fortunately did not get so large just like a couple years
Speaker:ago. Apparently, that was kind of covered up, so to speak. I don't know, but if that
Speaker:had been public information, that would certainly color the way that I looked at the Terralin
Speaker:project. I think at this point, the project's a complete failure. If you own Tera, if you
Speaker:own Luna, or if you own UST, your only hope at this point is to hold on and maybe something
Speaker:will come out of it. I do not know, but I certainly would not bet on that. This stuff
Speaker:is the reason why I always caution that you should not have a lot tied up in what I would
Speaker:call non-blue chip currency. I'm not a Bitcoin maximalist. They're having a field day these
Speaker:last couple of days, of course, but I constantly talk about Bitcoin and Ethereum, ADA. Those
Speaker:are probably the three most proven currencies at this point, and I will call them currencies.
Speaker:It's funny, I posted a stacker news article and a Bitcoin maximalist jumped on me because
Speaker:I was using the word currency. I'm like, dude, it's a currency. I don't know what to tell
Speaker:you. You can call it an asset. You can call it a currency. I can exchange it. It's a form
Speaker:of value. I can exchange it for something else, and that's currency to me now. I don't
Speaker:even know where that's coming from, but that's a whole different subject.
Speaker:There were people who thought this was coming. I was not one of them, although I said that
Speaker:it's always wise to keep in mind that these outcomes are possible, that the market could
Speaker:go places that we don't expect. Until just maybe a month, month and a half, two months
Speaker:ago at most, I was really confident that we were basically still in a bull market and
Speaker:that we would be reaching an all-time high, higher than $69,000. That does not look like the case.
Speaker:We've broke through enough levels that unless we make a really immediate recovery in the
Speaker:next few weeks, there's no chance of this being a bull market at this point.
Speaker:Now the question then becomes, how long are we going to be in a bear market? We talked
Speaker:about this a little bit Sunday, if I'm not mistaken, Monday morning's podcast. It might
Speaker:be a while. It might be a traditional market, or it may actually be fairly quick. There's
Speaker:a lot of people, and there's solid evidence for this, to be honest. There's a lot of people
Speaker:who think that at this point, it has to go down and touch what's called the 200-week
Speaker:moving average. That value's at $22,000 right now, roughly. And there's a lot of people
Speaker:who think this is not over until we reach that or go below it. And that may be true.
Speaker:And the reasoning is it's broken other, there's a 50-week and 100-week. Historically, if I'm
Speaker:not mistaken, again I apologize, I'm not going from my notes, but if it breaks the 50-week
Speaker:moving average, then it has broken the 200 every time, or touched the 200-week moving
Speaker:average. So we're still $3,000 away from even touching that, which means by that theory,
Speaker:we may have a bounce, we may even go up for a bit, but it's going to come back down. And
Speaker:I'm starting to give a lot of credence to that. If you're trading, please be extremely,
Speaker:extremely cautious. There's an extreme amount of volatility in the market right now, as
Speaker:you can imagine. It'll swing one way a couple thousand dollars, talking about Bitcoin, then
Speaker:it'll swing the other way for a couple thousand dollars. Now, it's been ratcheting down, but
Speaker:we keep thinking, oh, we hit a level, maybe this is the bottom for a while. Well, no,
Speaker:because maybe it bounces off that, but then it comes back later and breaks that. So you
Speaker:need to be super cautious, of course. You need to be using stop losses.
Speaker:But I want to wrap up, we're about 12-13 minutes into this, and I want to wrap up, and we'll
Speaker:talk longer on Sunday. I'm not up for much more than what I'm going to do right here.
Speaker:But if you are upside down, just hold. It's probably not the time to sell at this point.
Speaker:If you're selling at a loss, if you're a long-term investor and you're selling at a loss, you're
Speaker:making a mistake, frankly. I will probably be changing somewhat the way that I talk about
Speaker:this. I've always equated crypto to the wild, wild west. There's not a lot of rules, there's
Speaker:not a lot of regulations, and things are just kind of, they're wild, right? There's not
Speaker:enough sheriffs in town, that kind of thing. I've been involved in, not me personally doing
Speaker:it, but I've had things fail on me, let me put it that way. I've talked about Mt. Gox,
Speaker:for example, the exchange that was hacked. I lost a little bit there. I've had experience
Speaker:with this. But this Terra Luna thing is different, and the difference is they were heavily, heavily
Speaker:capitalized. The total value locked, if I'm not mistaken, was like $30 billion. That's
Speaker:an enormous amount of money tied up in that ecosystem, and all that money is going to,
Speaker:it's just gone. It's going to hurt a lot of people. It's one thing when some little thing
Speaker:gets exploited, usually because of mismanagement or whatever, and a few people get hurt, and
Speaker:it's fairly small on the radar. This is a whole different level. There's other projects
Speaker:that are built on that ecosystem, and they're going to end up failing, most likely. This
Speaker:is going to go down as a big event. Arguably, this will be bigger than Mt. Gox. In fact,
Speaker:I think even at today's dollars for Bitcoin, it would definitely be bigger. Back when it
Speaker:happened, I think it was like $600 million worth of Bitcoin that was stolen. It's not
Speaker:even close in terms of that value then, what was lost or stolen, versus the $300 billion.
Speaker:I've always been cautious about this. I tend to be very conservative when it comes to this
Speaker:kind of thing, but I think I'm probably going to honestly ratchet that down even more. I'm
Speaker:not going to tell people, no, you should never invest in whatever that coin is, but what
Speaker:I'm going to do is I'm going to start... What I believe that I'm going to do, and I still
Speaker:want to think about this some more, but I think this makes a lot of sense, is that you
Speaker:put a substantial portion of your investment in Bitcoin, and if you want to go outside
Speaker:of Bitcoin, then look at Ethereum and ADA. ADA especially, not real sexy, let's be honest,
Speaker:but they have a proven track record. They've been around for a while, and they do very
Speaker:thorough testing. Same thing with Ethereum. In fact, Ethereum's been around longer. Now,
Speaker:outside of that, if you want to invest 10% of your portfolio in some other coin, whatever
Speaker:that coin may be, and I'll talk about different coins still or different things like Anchor
Speaker:or whatever, but I do not recommend... There's too much risk. There's just too much risk.
Speaker:You can almost... It's not speculating, but until the project is proven over a long period
Speaker:of time, it's just speculating. Well, I said it was speculating, but then I said it wasn't,
Speaker:and now I'm saying it is again, so I guess I'm going back on what I said. It's just unproven
Speaker:about that, and you don't know if it could be exploited, if there'll be a bug, if it's
Speaker:going to suffer an attack like this, and until there's been some good period of time, you
Speaker:do not want to tie up your assets in that. It's too risky, and I have no problem if you
Speaker:just say, well, just put me in the most safest conservative thing out there that I will absolutely
Speaker:look at you until you put it in Bitcoin. Bitcoin has the longest track record. It has nothing
Speaker:even close to anything like this has ever happened to Bitcoin, and that's it. There
Speaker:you go. That's your gold standard. Beyond that, you've probably got a better chance
Speaker:of long-term growth in terms of percentages in Ethereum and Cardano or ADA. Outside of
Speaker:that, yeah, you can get lucky and get on the right token, and 100X your token in a few
Speaker:months or something if you catch the right thing, but that doesn't happen as often as
Speaker:people on Twitter might make us believe, and you have to time it just perfectly, and it's
Speaker:far riskier. Okay, so I won't tell you that, and I do have other assets. I've talked about
Speaker:that before. I know offhand, I've got Loopring, I've got Polkadot, I've got some ADAX, which
Speaker:is a decentralized exchange that's built on ADA. I probably have a couple of others, to
Speaker:be honest. I'm probably forgetting a few right now, but I've never been one to diversify
Speaker:in a bunch of stuff, and I'll be honest, over the next few years, I will probably be minimizing
Speaker:those down myself. I think that's the safest thing to do. I hope this finds everybody okay.
Speaker:I would encourage you, this is the time. Look, we're fixing to go through the bear market.
Speaker:We're here. We've talked about this. This is where we're going to do what? We're going
Speaker:to dollar cost average. This is where we're going to make the biggest impact on our investing,
Speaker:and when we come out the other side in the bull market and the prices go up, that's where
Speaker:you're going to see your portfolio will shoot up in value because things will start really
Speaker:climbing. I'm going to skip it for now because time's getting away. I will talk Sunday about
Speaker:the levels that we may reach. We may be at $21,000 by Sunday, honestly. I could see that
Speaker:happening at this point. We touched $25,000 right now. I'm sure the stock market's not
Speaker:going to do good tomorrow. The futures are already out, and it's already down. Friday
Speaker:probably won't be very good either, and we'll go right into the weekend, and it'll just
Speaker:be more and more. I could see Bitcoin hitting that $22K, $21K region already, but before
Speaker:you make major investments, if you have that opportunity, let's talk about some of these
Speaker:levels because there are levels below that, and it is possible that if we breach $21K,
Speaker:we could go lower, right? Well, we would go lower, and we'll talk about that. I'm going
Speaker:to talk about levels for Bitcoin. I'm going to talk about levels for Ethereum. I can't
Speaker:cover anything else, but if you're planning on buying in, these will be places that you
Speaker:might want to think about getting an order ready, and I will tell you this. The bottom
Speaker:level I will tell you for Ethereum, and this is mind-boggling. Right now, Ethereum sits
Speaker:at $1,893. I think it was down in the upper $1,700, if I'm not mistaken, when Bitcoin
Speaker:hit $2,500. It was like $1,760 or something. I don't remember. I will tell you the bottom
Speaker:resistance that I saw for Ethereum, and it will boggle your mind, it's $800. I never
Speaker:thought I would say that, that that would happen again, and it probably won't, but if
Speaker:it does, it will be a tremendous buying opportunity. Now, we'll talk more Sunday. All right, you
Speaker:guys, everybody, please be careful. Stay safe. If you really need to talk, reach out to me
Speaker:on Twitter at McIntoshFintech. You can email me at McIntosh at genwealthcrypto.com I typically
Speaker:get those fairly soon, but Twitter is actually the fastest way to get a hold of me, and we'll
Speaker:talk. Don't do something stupid. If you made some really big mistakes, then it stinks,
Speaker:and somehow we'll just have to get through it. Hit me up if you need it. I will talk