It's a known trick...but is it a warning sign for things to come?
If you are planning to cash out your Bitcoin, one way to avoid spending lots on Bitcoin transaction fees and waiting for long periods of time for your transactions is a fairly straightforward trick. Instead of sending Bitcoin to your local exchange for cashing out, you exchange it on the current exchange where you are holding it for a more "portable" currency, like Litecoin. Then, you send the Litecoin to your local exchange quickly, and at minimal expense. Once on your local exchange, you sell the Litecoin back into Bitcoin and subsequently "cash out". This is less costly and quicker than sending your Bitcoin from exchange to exchange (*editor's note: this depends on your local exchange - some exchanges, such as GDAX, do not charge fees for sending Bitcoin from one exchange to another).
If this is happening on a large scale, it would explain the sudden drop in Bitcoin value and the simultaneous large spike in Litecoin value.
Nothing to worry about, right? Just people trading Bitcoin for Litecoin, taking profits, right?
Except that futures trading opens on December 10, and it looks like people are starting to move out of Bitcoin into Litecoin. Are they doing this to cash out of their crypto-holdings? Do they know something we don't know?
Who knows? I'm a firm believer that Bitcoin will, long term, be worth far, far more than it is today. But not every trader is a long-term hodler. Many are flipping on a constant basis for marginal profits on large sums that, when added up, can be a substantial sum of money.
Protect yourself from disaster. If you are into Bitcoin or cryptocurrency beyond your means (note: you shouldn't be), you should cash some out before December 10. Of course, this could result in missing out on some gains if Bitcoin surges on the launch of futures. Minimize your risk by diversifying.
If you can live without the money you have sitting in cryptocurrency, then by all means, HODL! It could really pay off. Just be prepared for some big swings over the next little while and don't panic if it drops substantially. It will make its way back.
Do not risk what you can not afford to lose. This is more true now than ever!
*This is not professional trading advice -- I just don't want people to lose their shirts if things go badly over the next few days...
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BTC: 1FadQUp6PxQcbt1sicLRDE3f7v2kQPpVBq
or..
BCH: 13Gb1p2m9evD6jaR2ZEs1dyVPRWojKFEfY
image source:
https://blog.melroy.org
Except for sending BTC from GDAX to another exchange = no costs.
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Awesome. Yes, if you're on GDAX, that's a great feature. I made an editor's note in the article. Thanks!
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Yeah. Of course sending BTC back to GDAX would involve transaction costs unfortunately.
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But if this were true wouldn't LTC price have zero change? It would seem that people are holding onto LTC instead of selling it. But I do use the trick you mentioned to quickly move BTC between exchanges to buy other coins, particularly when the BTC network is running slow/high fees
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I think people find always solutions to save some money on fee ;)
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