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Launchpad is finally over!

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I'm sure many on here already realised, but I just learnt something fairly shady done by some crypto exchanges that allow margin trading. Binance allowed margin trading with MC not long after it was listed, which was not part of the agreement with the Merit Circle team (first shady part).

Anyway, as there were new MC tokens being released each day from the Launchpad to users staking MC, BNB or BUSD, this allows Binance whales (or the trading desk behind the exchange itself) to borrow these Launchpad user funds for shorting (margin borrow trading). As market sentiment was shit and there was continuous new supply each day for Launchpad rewards, it was an easy short opportunity (means selling your borrowed MC tokens) based on Binance Launchpad history for similar tokens. Once price tanks it allows you to rebuy lower and repay your borrowed coins.

This causes a couple of issues:
  • Increased sell pressure for a young project on a CEX where liquidity is still being established (i.e. easier to manipulate price as there are less exchanges to arb against)
  • An inability for some larger MC wallets to withdraw funds from Binance at the end of Launchpad for a period as these funds are being used to fund shorts (Binance just suspend your withdrawal until they eventually get the funds)

I understand these type of tactics are not just limited to Binance (FTX are just as bad I've been told), and the volume they will bring long term is great, but damn this is shady shit. This just reinforces why so many in crypto encourage you to understand DEXs and hold your funds on the decentralised platforms.

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BACCS said:
I'm sure many on here already realised, but I just learnt something fairly shady done by some crypto exchanges that allow margin trading. Binance allowed margin trading with MC not long after it was listed, which was not part of the agreement with the Merit Circle team (first shady part).

Anyway, as there were new MC tokens being released each day from the Launchpad to users staking MC, BNB or BUSD, this allows Binance whales (or the trading desk behind the exchange itself) to borrow these Launchpad user funds for shorting (margin borrow trading). As market sentiment was sh*t and there was continuous new supply each day for Launchpad rewards, it was an easy short opportunity (means selling your borrowed MC tokens) based on Binance Launchpad history for similar tokens. Once price tanks it allows you to rebuy lower and repay your borrowed coins.

This causes a couple of issues:
  • Increased sell pressure for a young project on a CEX where liquidity is still being established (i.e. easier to manipulate price as there are less exchanges to arb against)
  • An inability for some larger MC wallets to withdraw funds from Binance at the end of Launchpad for a period as these funds are being used to fund shorts (Binance just suspend your withdrawal until they eventually get the funds)

I understand these type of tactics are not just limited to Binance (FTX are just as bad I've been told), and the volume they will bring long term is great, but damn this is shady sh*t. This just reinforces why so many in crypto encourage you to understand DEXs and hold your funds on the decentralised platforms.
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The fact that a crypto exchange can fill multple functions by being a custodian, brokerage AND clearinghouse all at the same time, we'll continue to see shit like this. Private centralised crypto exchanges are more centralised than the conventional banking system, lol.
 
Facts are if feb is shit bear market officially in? And 2022 just be a downward sideward action job like 2018
And back to gambling for small profits or loses and accumulating Ethereum bitcoin again.
 
Cats2022 said:
Facts are if feb is sh*t bear market officially in? And 2022 just be a downward sideward action job like 2018
And back to gambling for small profits or loses and accumulating Ethereum bitcoin again.
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There has been a downtrend since early November, it has been a bearish market for 3 months already. The only things that matters now are whether the US implement any sort of strict crypto regulation this year and what the FOMC do to help taper inflation (and whether it is actually successful), everything else is noise to me. The behaviour of the crypto market has completely changed over the last couple of years, how BTC behaved in past bull/bear times has almost become irrelevant.
 
BACCS said:
There has been a downtrend since early November, it has been a bearish market for 3 months already. The only things that matters now are whether the US implement any sort of strict crypto regulation this year and what the FOMC do to help taper inflation (and whether it is actually successful), everything else is noise to me. The behaviour of the crypto market has completely changed over the last couple of years, how BTC behaved in past bull/bear times has almost become irrelevant.
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Agree, it never ceases to amuse me the people that look back to the past and use this to confidently predict future price movements. CT is full of them. The overall market and numbers and types of investors is different and Governments are starting to play a larger role. Also, new end use value propositions are appearing almost every week.
 

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