'But Mr. Krug, at Pantera Capital, said that if Tether were really being used by investors, they would probably also want to buy new Tether when the markets were going up, which has not been the case. Also, they would not always want it in exact increments of $100 million, as has been the case.
“After you see this enough times, you just start to wonder what’s really going on here,” Mr. Krug said.'
I'd listen to the folks at Pantera, they are pretty sharp.
To spread FUD so that prices are lowered and they can buy coins cheap?
Edit: So looks like attempt at humor lacked the /s tag attracting downvotes. So let me clarify, the answer to the above post asking "what will do they next?" If they believe in cryptocurrencies they will buy more if the prices are cheaper.
This reads like a conspiracy theory but please pause for a moment and consider why a financial company involved in cryptocurrencies would spread concern to a highly read news outlet. Either they:
1) Are scared that tethers can crash the market and want to flush things sooner than later
or
2) It's part of a disinformation strategy to move the market where it's more profitable.
There are very few rules and regulations around cryptocurrency so I'm betting on #2.
4) they believe it will help their overall reuputation after a crash, so customers who bought and got crushed will think "man if only I had listened to them"
or
5) it's someone with a personal grudge against crypto -- they made a private market short with an accepting party
or
6) it's space aliens who know crypto is the secret to super-luminal space travel and they want to sabotage humanity's efforts to reach the stars.
There is very limited evidence to prove that it wasn't space aliens. That's all I'm sayin'.
how do you move multiple hundreds of thousands of dollars worth out to fiat in a single instance?
Doing a trade of that size is no problem; you just enter it. Getting the money out via ACH or wire would require being pre-verified and upping your limits. AFAIK Gemini has higher limits than Coinbase/GDAX.
If tether pops suddenly, such as by the revelation that the supposed dollar account backing it was a sham, there may not be any cash to out. Simply no one will buy it, or only for pennies on the dollar.
Alternately, it might drag down other currencies by taking away the illusion of easy crypto-to-dollar exchange that tether offered, but other than that the dominant effect would likely just be investor panic.
So, no one knows how things will turn out! Such is finance. It makes for fun stories, at least.
What I think would happen is people with Tether stuck on those exchanges would start trying to get out by two ways:
1) Cashing out to fiat, I don't know these exchanges well enough to determine if people actually managed to cash out their Tethers with real money in a meaningful sum.
2) Buying crytocurrencies available on these Tether based exchanges in order to get off these exchanges, which would actually cause prices to go up, but only in terms of USDT, not USD.
After that it really depends on what those folks would do next, they might choose to hold onto the coins or try to liquidate to fiat which would cause prices of coins on non-Tether exchanges to go down.
a. As per coinmarketcap, currently the largest BTC market is the BTC/USDT on OkEx. On looking closer, 3 out top 10 markets are USDT (excluding Bitfinex). So that is nearly 10% of only BTC liquidity gone.
b. As Tether and Bitfinex are connected so the exchange shuts down. It is the 2nd largest bitcoin exchange. So all that liquidity vanishes too. That brings our above total to 15%.
c. There will be many cross connected trades relying on USDT so my guess is the liquidity number will be higher, maybe even in 25-35% range.
d. This will cause panic and people selling BTC left and right. So BTC prices taking a huge hit. It might go down as low as 1-2k.
e. Most other cryptos are pegged to BTC. So with BTC liquidity gone they will take another huge hit too.
"Long before news of the subpoena, Bitfinex, which is believed to host more trading than any other Bitcoin exchange in the world, had gained a reputation for a lack of transparency and a confusing structure, with European executives, offices in Asia and registration in the Caribbean."
Oh boy this sounds like the banking system I was hoping cryptocurrencies would supersede...
> Also, they would not always want it in exact increments of $100 million, as has been the case.
Not to question the Tether story but I don't understand this line of argument. What is the problem with exact increments?
Sure, the tokens have to be issued only if the issuing conditions are met. But given the number of hacks, wouldn't people want to use the issuing account sparingly? You know, use the issuing account to issue tokens in fixed increments to build up reserves. The move these reserves to be held in another account.
The theory behind tether is it's backed by US dollars so if investors send in 1234 usd they should be held in reserve and 1234 tether issued against them. If they are issuing them in lots of 100 million it suggests they were not bothering with the whole receive dollars from investors and hold them bit.
I recently created my own cryptocurrency, UCaetanoCoin (UCC), with a supply of 100 trillion and one coins, all owned by me.
I sold one to a friend of mine for $0.01 yesterday, which made me not only the richest person in the world, but also the first trillionaire, as the coins I own are valued in $1T USD.
And my UCC has a total market cap of $1T USD (and one cent). Then I exchanged a single coin with myself for $0.01.
As my coin has zero transaction cost and instant transactions (it's a badass coin), I traded it back and forth with myself 100 quadrillion times.
This generated a total traded value UCC-USD of 1 Quadrillion Dollars yesterday, more than any other security was ever exchanged in a single day.
Anyone wants to invest on my UCC? Here's my white paper:
I won’t charge you for consultation here. You should make a token system so people can earn token (somehow) and get rewards like iPhone and perhaps even a stack of American Dollar. Let’s partner with resturants, airlines, gyms and hotels. Every bite, every mile equals some arbitrary token that will expire in 180 days. We will develop a mobile game called crytoGo in which users can earn our token by mobbing Central Park and Settale Centeal Library.
The more active users are physically in the real world, the more trading happens. We will make our users live like a hamster running on a wheel.
We give people incentive to live and make money! No more sitting in the office 9-10 anymore! They get social and outdoor life, and we make our money.
This will take off. Don’t waste your time on Facebook. Any crytocurrency marketer tells you to invest in facebook campaign is stealing your money. Listen - find some viral YouTubers and Instagram users to back you. We will make an awesome logo like the Grumpy Cat.
Contact me privately if you would like a quote for a complete proposal. I am happy to work out the details with you. We can refine the bots for sure.
Everything is done behind Tor - even more secure than ever! Our servers are located in Sweden so do not worry about!
Just so you know: I have patented the idea and design of this system. So don’t think about copying. Trust me. My name is yeukhon. I have a B.S in Computer Science. K?
Why shouldn't we follow the example to its logical conclusion? He's clearing trying to demonstrate that it's the wild west. It's really only the wild west until the SEC starts to enforce existing laws.
Top post, which I was replying to, was about a trillion-dollar bitcoin offering. I trust that you scolded him as well, dang.
> I recently created my own cryptocurrency, UCaetanoCoin (UCC), with a supply of 100 trillion and one coins, all owned by me.
> I sold one to a friend of mine for $0.01 yesterday, which made me not only the richest person in the world, but also the first trillionaire, as the coins I own are valued in $1T USD.
> And my UCC has a total market cap of $1T USD (and one cent). Then I exchanged a single coin with myself for $0.01.
> As my coin has zero transaction cost and instant transactions (it's a badass coin), I traded it back and forth with myself 100 quadrillion times.
> This generated a total traded value UCC-USD of 1 Quadrillion Dollars yesterday, more than any other security was ever exchanged in a single day.
I've chided that comment for some things, but pointing at the other person when asked not to break the site rules is kind of an antipattern here. You've posted a few unsubstantive comments; that's not what this site is for; so please don't do it. If you stick to the quality level of your more substantive comments you'll be fine.
The comment itself is sort of a rehashing of by now ultra tedious material, too. You're far from the only one rehashing it—pun intended—but it would be good if everyone doing it would stop. Repetition is the leading anti-value of this site.
It isn't re-hashing, I actually copied and pasted my own comment, verbatim. And with good reason.
Despite the humorous tone, my comment is about how easy it is to manipulate prices in unregulated, anonymous markets. It might sound like a joke, but it isn't, and it relates to the article in question.
But I'll put it in different wording: in an anonymous, unregulated market, it is very hard to validate transactions as being between unrelated parties, and therefore easy to manipulate prices.
Yes, please don't copy and paste on Hacker News. We're trying for thoughtful discussion here. Imagine what would happen if everyone did that!
HN is an internet forum where we're trying to find and talk about interesting things. Once something has been repeated enough times it ceases to be interesting. This is incompatible with the intellectual curiosity HN exists for (https://news.ycombinator.com/newsguidelines.html).
What makes this so difficult is that repetition is its own form of pleasure and doubly so when indignation is excited. My dream is to get all of us on HN to be aware of this dynamic so we can focus on curiosity—which has quite a different texture—and steer clear of the tedious.
The points you're repeating about Bitcoin have been commonplace for a long time now, and the jokey format dilutes quality further. You're not the only one doing this, but the copy-pasting thing is bad. As if these threads weren't repetitive enough already!
hi me and a group of investors, 1000 to be exact, want to acquire 40% of the coins. we can take the value of UCC to us$19999 dollars, contact me for further details
Tether's market cap is around $2b... the crypto market as a whole clocks in at over $500b right now... what kind of effect could Tether really have, beyond the inevitable panic that will ensue?
The idea presented in the post is simple - marketcap is based on the last trade. So it is an unreliable indicator.
True measure might be something like liqudity and exits. What happens if the liquidity shifts or exits to fiat disappear completely? Like I pointed out, currently USDT is connected to 15% of liquidity in BTC:
Volume of trades from exchanges show that daily 5% of the market cap is traded. (About $25 billion traded vs $500 billion market cap) How does this compare to Apple or another large stock?
The world economy was much larger than the market for US mortgage bonds, but when US mortgage bonds failed, the entire world economy tanked. It's not about relative sizes, it's about how intertwined the relationships are.
> We vary N from 1 to 24 hours and examine the p-values. [.....] there are a number of periods where the p-values are significantly below 0.05 and we reject the null hypothesis for those periods.
Is it p-hacking to vary N and find low p-values? If its not p-hacking, but a valid analysis with predictive power, then wouldn't it make a good trading strategy to watch the tether wallet and buy btc whenever new issuance happens?
just look at the weekly chart and you’ll see a peak pattern. another pattern can be seen in the daily chart, flat periods that don’t exist on stocks like Nike or apple
I really want bitcoin to succeed because it really is a great way to take back the power from corporations and the plutocracy we find ourselves in today. The fixed pool of bitcoins is slightly problematic.. would it not be better if the pool increased at 1% a year or so..? Gold made sense as a reserve since it formed a quorum among the various economies. The dollar makes sense now but so does bitcoin. The only issue I can't resolve is the deflationary impact of hodling since there will only by 21 million coins.
> a great way to take back the power from corporations and the plutocracy we find ourselves in today.
In practice this is ultimately just replacing one plutocracy with another. Though really, given that the only way to make "fuck-you" money betting on cryptocurrencies is to have an excess of disposable income in the first place, it may not be so much "replacing" as "reinforcing".
> The only issue I can't resolve is the deflationary impact of hodling since there will only by 21 million coins.
It's even worse than that, since people will continue to lose bitcoins. They've already lost 3 million or so: http://fortune.com/2017/11/25/lost-bitcoins/. It's as if the Federal Reserve promised to print $21 million in dollar bills, then never print any more. Maybe someday "bitcoin mining" will mean digging through landfills and scanning old hard drives for lost wallets.
71 comments
[ 2.5 ms ] story [ 87.0 ms ] thread“After you see this enough times, you just start to wonder what’s really going on here,” Mr. Krug said.'
I'd listen to the folks at Pantera, they are pretty sharp.
Edit: So looks like attempt at humor lacked the /s tag attracting downvotes. So let me clarify, the answer to the above post asking "what will do they next?" If they believe in cryptocurrencies they will buy more if the prices are cheaper.
1) Are scared that tethers can crash the market and want to flush things sooner than later
or
2) It's part of a disinformation strategy to move the market where it's more profitable.
There are very few rules and regulations around cryptocurrency so I'm betting on #2.
3) it's a single individual sharing their opinion
or
4) they believe it will help their overall reuputation after a crash, so customers who bought and got crushed will think "man if only I had listened to them"
or
5) it's someone with a personal grudge against crypto -- they made a private market short with an accepting party
or
6) it's space aliens who know crypto is the secret to super-luminal space travel and they want to sabotage humanity's efforts to reach the stars.
There is very limited evidence to prove that it wasn't space aliens. That's all I'm sayin'.
Do people try to cash out immediately or do they flock to the "stable" coins like BTC or ETH?
To my knowledge the only thing you can trade tether for is other cryptocurrencies.
I've always wondered though - how do you move multiple hundreds of thousands of dollars worth out to fiat in a single instance? Is that possible?
Doing a trade of that size is no problem; you just enter it. Getting the money out via ACH or wire would require being pre-verified and upping your limits. AFAIK Gemini has higher limits than Coinbase/GDAX.
Alternately, it might drag down other currencies by taking away the illusion of easy crypto-to-dollar exchange that tether offered, but other than that the dominant effect would likely just be investor panic.
So, no one knows how things will turn out! Such is finance. It makes for fun stories, at least.
1) Cashing out to fiat, I don't know these exchanges well enough to determine if people actually managed to cash out their Tethers with real money in a meaningful sum.
2) Buying crytocurrencies available on these Tether based exchanges in order to get off these exchanges, which would actually cause prices to go up, but only in terms of USDT, not USD.
After that it really depends on what those folks would do next, they might choose to hold onto the coins or try to liquidate to fiat which would cause prices of coins on non-Tether exchanges to go down.
a. As per coinmarketcap, currently the largest BTC market is the BTC/USDT on OkEx. On looking closer, 3 out top 10 markets are USDT (excluding Bitfinex). So that is nearly 10% of only BTC liquidity gone.
b. As Tether and Bitfinex are connected so the exchange shuts down. It is the 2nd largest bitcoin exchange. So all that liquidity vanishes too. That brings our above total to 15%.
c. There will be many cross connected trades relying on USDT so my guess is the liquidity number will be higher, maybe even in 25-35% range.
d. This will cause panic and people selling BTC left and right. So BTC prices taking a huge hit. It might go down as low as 1-2k.
e. Most other cryptos are pegged to BTC. So with BTC liquidity gone they will take another huge hit too.
Oh boy this sounds like the banking system I was hoping cryptocurrencies would supersede...
> According to AQR Capital Management, about 1,000 people own 40% of the world's bitcoins.
I'm not sure having bitcoin oligarchs will work out great.
Not to question the Tether story but I don't understand this line of argument. What is the problem with exact increments?
Sure, the tokens have to be issued only if the issuing conditions are met. But given the number of hacks, wouldn't people want to use the issuing account sparingly? You know, use the issuing account to issue tokens in fixed increments to build up reserves. The move these reserves to be held in another account.
I recently created my own cryptocurrency, UCaetanoCoin (UCC), with a supply of 100 trillion and one coins, all owned by me.
I sold one to a friend of mine for $0.01 yesterday, which made me not only the richest person in the world, but also the first trillionaire, as the coins I own are valued in $1T USD.
And my UCC has a total market cap of $1T USD (and one cent). Then I exchanged a single coin with myself for $0.01.
As my coin has zero transaction cost and instant transactions (it's a badass coin), I traded it back and forth with myself 100 quadrillion times.
This generated a total traded value UCC-USD of 1 Quadrillion Dollars yesterday, more than any other security was ever exchanged in a single day.
Anyone wants to invest on my UCC? Here's my white paper:
https://cdn.shopify.com/s/files/1/0858/9696/products/122_102...
The more active users are physically in the real world, the more trading happens. We will make our users live like a hamster running on a wheel. We give people incentive to live and make money! No more sitting in the office 9-10 anymore! They get social and outdoor life, and we make our money.
This will take off. Don’t waste your time on Facebook. Any crytocurrency marketer tells you to invest in facebook campaign is stealing your money. Listen - find some viral YouTubers and Instagram users to back you. We will make an awesome logo like the Grumpy Cat.
Contact me privately if you would like a quote for a complete proposal. I am happy to work out the details with you. We can refine the bots for sure.
Everything is done behind Tor - even more secure than ever! Our servers are located in Sweden so do not worry about!
Just so you know: I have patented the idea and design of this system. So don’t think about copying. Trust me. My name is yeukhon. I have a B.S in Computer Science. K?
It's the future.
Also it might be a juicero blockchain play!
So nothing wrong with my trades.
https://definitions.uslegal.com/w/wash-trading/
I DO WANT TO INVEST!!!
> I recently created my own cryptocurrency, UCaetanoCoin (UCC), with a supply of 100 trillion and one coins, all owned by me. > I sold one to a friend of mine for $0.01 yesterday, which made me not only the richest person in the world, but also the first trillionaire, as the coins I own are valued in $1T USD. > And my UCC has a total market cap of $1T USD (and one cent). Then I exchanged a single coin with myself for $0.01. > As my coin has zero transaction cost and instant transactions (it's a badass coin), I traded it back and forth with myself 100 quadrillion times. > This generated a total traded value UCC-USD of 1 Quadrillion Dollars yesterday, more than any other security was ever exchanged in a single day.
https://news.ycombinator.com/newsguidelines.html
The comment itself is sort of a rehashing of by now ultra tedious material, too. You're far from the only one rehashing it—pun intended—but it would be good if everyone doing it would stop. Repetition is the leading anti-value of this site.
Despite the humorous tone, my comment is about how easy it is to manipulate prices in unregulated, anonymous markets. It might sound like a joke, but it isn't, and it relates to the article in question.
But I'll put it in different wording: in an anonymous, unregulated market, it is very hard to validate transactions as being between unrelated parties, and therefore easy to manipulate prices.
HN is an internet forum where we're trying to find and talk about interesting things. Once something has been repeated enough times it ceases to be interesting. This is incompatible with the intellectual curiosity HN exists for (https://news.ycombinator.com/newsguidelines.html).
What makes this so difficult is that repetition is its own form of pleasure and doubly so when indignation is excited. My dream is to get all of us on HN to be aware of this dynamic so we can focus on curiosity—which has quite a different texture—and steer clear of the tedious.
The points you're repeating about Bitcoin have been commonplace for a long time now, and the jokey format dilutes quality further. You're not the only one doing this, but the copy-pasting thing is bad. As if these threads weren't repetitive enough already!
I've heard many in the cryptocurrency space throw figures around such as $1,000.
I fear that the crash would be far lower. The argument is that the entire run up is fake therefore a realistic price would be back around $100.
Bitcoin gold -- a questionable bitcoin fork.
OmiseGo -- Soemthing I've actually never heard of, despite following cryptocurrencies pretty closely.
If OmiseGo, or Bitcoin Gold ended up being a scam, would the market even notice?
https://news.ycombinator.com/item?id=16279591
True measure might be something like liqudity and exits. What happens if the liquidity shifts or exits to fiat disappear completely? Like I pointed out, currently USDT is connected to 15% of liquidity in BTC:
https://news.ycombinator.com/item?id=16279642
Or as MekaiGS said the whole thing will depend on exits:
https://news.ycombinator.com/item?id=16279618
That's huge. If this volume is based on fake dollars then I think the entire space could be massively inflated.
> We vary N from 1 to 24 hours and examine the p-values. [.....] there are a number of periods where the p-values are significantly below 0.05 and we reject the null hypothesis for those periods.
Is it p-hacking to vary N and find low p-values? If its not p-hacking, but a valid analysis with predictive power, then wouldn't it make a good trading strategy to watch the tether wallet and buy btc whenever new issuance happens?
Never looked at the NYT as a satirical publication.
In practice this is ultimately just replacing one plutocracy with another. Though really, given that the only way to make "fuck-you" money betting on cryptocurrencies is to have an excess of disposable income in the first place, it may not be so much "replacing" as "reinforcing".
> According to AQR Capital Management, about 1,000 people own 40% of the world's bitcoins.
Take back the power? How? Power is still concentrated in the hands of a few.
It's even worse than that, since people will continue to lose bitcoins. They've already lost 3 million or so: http://fortune.com/2017/11/25/lost-bitcoins/. It's as if the Federal Reserve promised to print $21 million in dollar bills, then never print any more. Maybe someday "bitcoin mining" will mean digging through landfills and scanning old hard drives for lost wallets.
If Tether doesn't have the funds then its a lot like someone borrowed 2Billion to buy crypto and can't pay it back.
Bitfinex will die, tether will die (just like other scam currencies like Bitconnect) but the market will come back after a correction.
If this weren't the case, HN may find itself completely buried by this topic, as well as the spammers that come with it.