TL,DR:
- If you hold anyTether (USDT) move it into something else
- Unwrap any WBTC
- Move all assets out of centralized exchanges
The crypto contagion set off by the collapse of FTX continues. You can read all the gory details in the month-end letter, which I’m working on now and will be out this week.
However, as I’m working on this edition and learning more about the interconnections between Alameda/FTX and Farmington Bank, and Tether, I saw some numbers that, quite frankly, I don’t believe.
That leads me to think Tether may finally be on the ropes, and I don’t think this contagion will be over until USDT cracks wide open.
As this occurred to me I wanted to get the following defensive moves out to you. Because events in this space tend to be dramatic and sudden, the few days between now and when the monthly letter comes out may make a difference.
First: If you hold any USDT: Move it into some other stablecoin, and the only one I really feel the least suspicious about is Circle’s USDC. In a pinch, go to MakerDAO’s DAI.
Second: I’ve been saying this since before the Ethereum merge, but unwrap any Wrapped Bitcoin (wBTC) you may have. You could use an exchange to sell it for BTC – but then, get it out of the exchange.
The peg for wBTC has been a but wobbly lately, and as far as I’m concerned, wrapped Bitcoin isn’t Bitcoin. It’s an altcoin.
You could also do what I did (I found some wBTC in my Coinbase wallet), is just swap it for USDC. Why? Because if I’m right about all this heading for a crescendo of a Tether collapse, then we’re looking at a sell-off in prices that will probably take Bitcoin below $10K.
At that point I’m pushing 100% of my USDC onto a trusted exchange and buying Bitcoin.
Trusted exchanges are:
Canada: BitBuy (Coinsquare just had a data breach, which doesn’t inspire confidence)
USA: Coinbase. Yes, we still stand by COIN. Details in the monthly letter.
International: Kraken.
Remember, once you make your purchases – move them out of the exchange immediately into your own custody wallet.
Which brings us to:
Three: If you haven’t already, remove your assets from the exchanges, and if you don’t have a hardware wallet yet, use a self-custody software wallet, as per the alert I sent out a couple weeks ago.
For a hardware wallet I use the Ledger Nano to custody my Bitcoin – it supports most other cryptos as well, including stablecoins like USDC (you could try if their Black Friday coupon code still works: BLACKFRIDAY10)
