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Community is wondering why Bitmex calls on shorting ETH

Over the past few months, Ethereum’s (ETH) has been taking a serious beating in the markets. With prices now hovering around $170, many wonder if ETH is on its way back to double digits, an incredibly low valuation we haven’t seen the Dapp ecosystems currency at since May of 2017.

To make matters worse, it was recently tweeted that Arthur Hayes, the founder of margin trading cryptocurrency exchange Bitmex, was active in the platforms’ chat (known as the ‘Trollbox’) encouraging his users to short ETH.

In the Trollbox, Arthur explains how users can short on Bitmex using BTC without touching USD. The contracts setup on Bitmex use BTC as a base asset, meaning no ETH is actually traded and everything is settled in BTC.

Following his first post, he refers to Ethereum as a ‘shitcoin’, a commonly used term in the crypto space to describe coins that have no value and only exist as a means of raising capital to make their founders wealthy.

Further evidence of Bitmex attitude against ETH is shown in their recent blog post titled: ‘Ether, a double digit shitcoin’.

Harmless opinion? Or possible market manipulation?

No one can argue that ETH should be as openly criticized as any other digital asset in the decentralized crypto space. In fact, it is absolutely necessary that negative opinions be shared openly and out loud so that investors can take in all the information in consideration before deciding to enter a position. In the mentioned blog post, there are some very common arguments for why ETH is overvalued, stating that “The real profit in 2017 was made by Ether holders, shitcoin projects, and promoters. The seed capital for many of the venerated crypto hedge funds emanated from out-sized returns on holdings of Ether and token projects..

“VC investors loved ICOs in the bull market because they could point to an objective and liquid secondary market valuation. They used these eye-popping returns to raise bigger shitcoin funds in 2017, and early 2018. However, objectivity and transparency is undesirable when your shitcoin portfolio is down by a minimum of 50%.

“Most money was raised and invested in 2H2017 to 2H2018. That means the suckers who invested recently are most likely down. At a certain point, they go “fuck it”, and dump everything they can. It is this moment, that Ether goes from a 3-digit to a 2-digit shitcoin.”

However, what raises alarms for many traders is the possible effect that someone of Arthur’s influence might have on the price of ETH. The mere fact that he advocates shorting ETH is enough for thousands of traders on Bitmex to increase their short positions, which only further drives the price down. In any other regulated market, the SEC would be jumping on this case as a blatant act of market manipulation. Yet in crypto, there is no SEC or centralized regulatory body, so it’s really up to each individual to decide to take or dismiss whatever advice they receive, no matter how influential the source.

Conclusion

We could argue that those who truly believe in Ethereum will not care about Arthur’s position, while those who were already considering shorting may have just received the confirmation they needed to follow through. Regardless, there’s no denying the fact that conflicts of interest exist amongst nearly all crypto influencers, as everyone is free to hold a long or short position in any coin without regulatory oversight or a need for disclosure. Therefore, the only recourse for exchange founders encouraging users to short ETH is for Ethereum to work towards making sure ETH can create real value in the long run.

Ultimately, once utility finally starts to overshadow speculation, the market sentiment will likely to shift from bearish to bullish, and then we won’t need to be concerned about how the opinions of Arthur Hayes or any influential person in the crypto space affecting the price of ETH.

The post Community is wondering why Bitmex calls on shorting ETH appeared first on CryptoPotato.

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