Don Kaufman here.
I think Bitcoin is the biggest pile of crap ever, and it has nothing to do with the technology.
It's because you can see what everyone’s doing on it.
And that p****s me off to no end.
As a trader, do you want full transparency?
It's like playing a game of cards where you're constantly showing your hand to everyone at the table and going, "Hey, look at my cards, I'll beat you all anyway!"
The Problem Nobody Talks About
Bitcoin's ledger is so perfect that they can track everything. Let's say you bought Bitcoin back when it was $10,000 - about five years ago. You bought a nice chunk and you've been sitting on it ever since. Now Bitcoin's at $86,000 and you decide to cash out.
Every single person watching the blockchain can see exactly what you're doing.
They can see that your wallet has been dormant for five years. They can see you bought at $10,000. And they can see you're selling at $86,000.
You know what that does to the market?
It scares the living hell out of everyone.
The Dormant Wallet Panic
There are firms out there that own 50,000 BTC - some they bought at $5,000. When these wallets that haven't moved in years suddenly start trading, everyone can see it in real-time.
"Holy crap, this guy got in at $5,000 and he's getting out at $86,000. I am getting the hell out of here right now."
This is exactly why Bitcoin's bounces have been so weak lately.
There's almost no short covering happening because barely anyone's actually short.
When the market tries to bounce and goes nowhere, it's displaying that no one wants to commit capital. There's no belief behind it.
Why Traditional Markets Work Better
In stocks, options, futures - there are millions of participants throwing orders around. Opening transactions, closing transactions, client trades, market maker hedging. It's chaos, and chaos is beautiful for traders.
You can actually hide what you're doing.
In Bitcoin? Every transaction is crystal clear. If you're moving serious size, everyone knows exactly what you're doing, when you're doing it, and what your cost basis was.
The Bottom Line
I don't want anybody to know that I'm trading big lots. Period.
Bitcoin's transparency isn't a feature - it's a bug. A massive, market-moving bug that makes serious trading nearly impossible once you reach any meaningful size.
While everyone's celebrating the "revolutionary" open ledger system, I'll stick to markets where I can actually trade without showing my cards to every other player at the table.
Because in trading, just like in poker, the moment everyone can see your hand is the moment you've already lost.
To your success,
Don Kaufman
P.S. I’m going live tomorrow to talk about something that scares the hell out of most traders but me–VOLATILITY.