Interesting thoughts, but sometimes your terse and barely hinting style is a bit hard to follow.
Maybe something big is brewing when one of the main casino's spot arb starts to get seriously outta wack like way back?
ELI5: How is the spot arb getting out of whack? Is someone doing something? What are they doing?
Paperization runs the risk of price discovering there are no bailouts: a covering willybot with current market dimensions could produce spectactular results
Could you elaborate on that?
No spreads are outta wack and this is merely a hypothetical scenario regarding paper games. If Mikey, "treasuries", etc exercise claims bigly (and if someone turns out to be playing), the price will go up where pockets of paper live unless they double down to compensate.
You mean "corrective" shorting or similar foul play?
Also consider that if the gubmint/sec/cftc begin gynecologizing US-based exchanges, casino games they've been greenlit to run since and before "regulation through enforcement" would be in jeopardy, which would also have the effect of tamping down any back room naughtiness.
You mean regulation through enforcement could tamp down some of the trickery?
we all know how the FTX situation ended for the market. If we're starting to see obvious cases of entities using paper Bitcoin and not being able to cover client holdings, it is time to say goodbye to the market for a couple years.
Would a repeat of the FTX scenario necessarily play out to the downside?
I agree there's a slight chance it could turn out better this time, "cuz dis time it's different mmrghgh". However, as someone (searing for one) pointed out, it's unlikely. If the size of the fuckery is limited and the perpetrators can get out clean by buying some legit btc, things can get a boost. If it's too messed up to recover, or too widespread, we're in for a long lasting climate of mistrust. No Superman Saylor can talk the world out of that.
The best situation IMO would be if some small name, caught with their hands in the cookie jar, ends up beaten bloody by having to repay the damage (or buy back) with their own funds, not yet vanished. That would be a hard lesson for the small fish, but a cheap lesson for the sharks.
I'm assuming I understood what you meant, but as I preventively stated, I'm not quite sure. A little more articulation on your side would make for a more pleasant conversation.