I wonder how much the volatility of cryptocurrency is influenced by the stability of exchanges. Does it make the price more stable by artificially restricting trading, or does it ultimately induce more panic?
If one exchange goes down and you have enough money to move the price on another one, that's a great opportunity for some arbitrage. That would cause at least some players to try for higher volatility. (No idea what the overall effect will be though)
It's quite concerning given the amount of people who will be trying to sell right now. Even a short period of being locked out of trading could cost people thousands of dollars. I'm sure they're protected in their terms of use but I wouldn't use an exchange that can't keep live with high volumes.
Except Crypto isn’t regulated like stocks, so what your likely seeing is the exchange themselves shutting off service to lock in their customers while the exchange liquidates its positions.
It’s the same company that attempted to keep its customers Bitcoin cash when Bitcoin forked right? Then only backed down after consumer backlash? Same company that tipped off its employees to buy Bitcoin cash to pump it before it was listed and then it was dumped on day 1?
You seem to be sarcastic but in fact yes the Robinhood/GameStop BS resulted in both a congressional probe and it skipped the FBI and went straight to the prosecutors at the Department of Justice.
Looks like very serious stuff happened indeed. I'm not sure about why I forgot about the congressional probe. Perhaps it's because for the people who lost or made money out of this nothing changed.
It's good to know that when bad stuffs happens on regulated markets there will be a congressional probe while on the crypto market you have no prime BS on tv.
And it's not only Robinhood. Citadel, the market maker seems to be the brain behind all this price manipulation and media attacks on AMC and GME and selling a whole lot of synthetic shares on the market which when retail investors buy do not affect the price. I've been following this saga closely and am beyond horrified of how corrupt our free market is. It is not free at all and heavily manipulated.
I mean, maybe? If crypto is not bound by legal frameworks that govern traditional banks, what law would the exchanges have broken? The worst I could see happening is class action lawsuits, but not any kind of federal action.
These companies are backed by VC money, they can just drag out any court cases for years or decades until they have managed to buy themselves legal immunity. We saw it with Uber, Lyft, AirBNB, etc.
Except that most of the time that means nothing in practice.
Just look at the GME saga and you have customers liquidated, customers not being able to buy, some not even able to sell. And on top of that the CEO of Interactive Brokers setting a target price for the stock.
All this so that few highly leveraged hedge funds can get away from the short squeeze cheaper along with their lender/broker.
Except it doesn’t mean nothing because there are a bunch of lawsuits against Robinhood, because the law provides a remedy for the bullshit they pulled.
Right! Let me know when they get their money back. I thought that when bad stuff happens on regulated markets at this level(i.e congresional probe etc) the DA, SEC, FCA or whatever agency is in charge is supposed to intervene and make it right. And btw it wasn't just RobinHood. At some point all the retail brokers(i.e Interactive Brokers) decided to hold various positions(buy/sell).
People can sue coinbase and any other shady broker as well. If you've lost 10K I doubt you are willing to spend even more to get it back in court be it coinbase, RobinHood or any other exchanger/broker with an army of lawyers.
Look I’m as jaded as the rest, like everyone. I’ve seen mass manipulation to promote bullshit wars. I graduated in 2008 and I am still told to shut up and say thank you to the banks for paying back taxpayer loans with interest that bailed them out of their own fraud and let them consolidate the market. I saw the CDC initially lie about masks to allegedly preserve supplies for healthcare providers. I saw the government take trillions in future taxes and mostly give it to businesses and for the FED to leverage into even more money to prop up the stock market (hey, all time highs again mid pandemic).
Still, for all the BS lawyers get, much of it deserving, for every lawyer behind the brokers/investors/funds there are others representing the victims. These are the types of lawsuits that include egos so big that sometimes discovery of emails/communications and the prospects of sitting for depositions result in a resolution, and even change.
It’s funny you mention the army of lawyers, because many of these cases have been consolidated and one 1 Zoom hearing were 141 lawyers…they represented the plaintiffs.
It's not about lawyers being good or not. What we currently have in financial markets is far from a lawful or just system. Just look how Musk manipulated TSLA and got away with a slap on the wrist $20 Million fine. He openly mocked it on twitter afterwards. And that's just a blatant example from someone who doesn't even care to hide it. That recent GME manipulation wasn't an exception, it's the norm. There are a ton of hedge funds engaged in "technically" illegal trades worth billions of dollars. But who's going to stop them when they're in uncovered short positions, which happens all the time. There is no higher power. The SEC is a paper tiger. If you want to sue Citadel, be their guest. The lawyer's fees and occasional fines they pay are already taken into account. Not that someone like you and me could even afford to bring a case against them.
The customers that were liquidated were trading on margin (aka with borrowed money.) When you accept that borrowed money, you also agree that the broker’s risk department can liquidate your positions to ensure they get their money back.
I have not heard any anecdotes about US exchanges not allowing selling/exiting existing positions. In fact, on of the arguments from GMEanon is that disabling buying and keeping selling open drove the price down. There is nothing illegal about a broker disabling entering a new position (buying stock).
It’s what happens when the entire vehicle is speculation. I know the plan and the desire is for Bitcoin to be used as an alternative payment method but it isn’t fit for purpose. The people investing in it are doing so purely on a speculative basis, so you’d better believe plenty will cash out at the first sign of a dip.
Can you please point me a source where Bitcoin is "desired" as a payment method? It's seen more of a store of value, not used for paying for everyday things.
You’re asking for a source to prove that people want to use a cryptocurrency as currency? Feels a little like asking for a scientific paper proving that fish swim in water.
Isn't the revisionist history amazing? All of the other use cases (e.g. smart contracts) are proven failures and now the original use case (payment method) is also clearly a failure, so the narrative shifts to "it was never intended to be a payment method, only a store of value". A store of value that can drop 40% in days, BTW, another failed use case.
It is titled "Bitcoin: A Peer-to-Peer Electronic Cash System"
So, based just on the title, it's pretty clear that it's original intent was as an electronic payment method.
The first sentence of the abstract is: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution"
If you read the rest of the whitepaper it's pretty clear that the original intent was as a mechanism to facilitate payments and transactions.
Are you arguing that the original Bitcoin whitepaper is invalid as a source of whether Bitcoin is "desired" as a payment method?
Clearly, at least one person (the author of the whitepaper!) "desired" Bitcoin as a payment method. They desired it so much, that they went off an invented it!
If that doesn't count as a source indicating what someone "desires" then nothing does.
In this case the volume is pretty irrelevant. If nobody wants to buy at the current price, and there are people willing to sell for a penny less than the current price, the price will drop. $1B or $10B of outflows can have the same price movement.
>A single $1B of outflows shouldn't tank a market like this by 40%...
It depends what kind of market you think it is. The fact is there's no economic fundamental supporting the value of Bitcoin, so it's value is just whatever speculators are willing to pay at any given time.
He was responding to the "I wouldn't blame him" part - the following day he posted that Tesla had not sold any, and he's stated that they plan to accept BTC as payment in the future once more of the mining is transitioned to renewable energy. [0][1]
Crypto is an... interesting market. The vast majority of trades are done by bots. Some external event causes BTC to swing and bots key off that, magnifying the effect. When it’s a REALLY big event like today and people are trying to cash out, the effect feeds on itself.
Well, dumping once you already knee deep in the dump only ensures a guaranteed loss.
If you are confident about the long term prospects of an investment, then holding on for longer might just work. I won't be selling any of my Eth or PoS crypto currencies any time soon. It helps that crypto makes up less than 15% of my portfolio.
Not really, you can dump and buy lower. Dump and not buy back will guarantee losses. Usually you dump based on panic and not buy back that’s how wealth is lost usually. Most assets don’t go to zero after someone sells, they may go lower but will have a bounce point somewhere down the line.
Watching the absolute freefall of the crypto market on coinmarketcap is rather entertaining. Glad I cashed out ~10 days ago, even if I missed out on some gains.
Thinly traded, purely speculative markets, with very few, highly concentrated holdings, running on completely untested, largely unregulated exchanges, with no SLAs, middlemen, customer support, etc. . .
Assets in the same asset class tend to move together, especially during market crashes. Same exact thing happens with stocks during periods like 2008. In finance speak, we say “correlations go to 1”
There's a lot of correlation between them as they're all riding the same "cryptocurrency" wave.
In fact I think you could turn that into a partial numerical measure of the crypto market. In a mature market where "cryptocurrenciness" is mostly just a fact of life, they ought to be less correlated as they have independent lives of some sort. (They'll never be completely uncorrelated, of course, since the whole market is correlated to some degree.) Right now it's still enough of a novelty that the mere fact of cryptocurrenciness is a big percentage of the appeal of a given cryptocurrency.
Every time a miner post something here or on Reddit, they are mining one coin and immediately trading into another. The same for the exchanges, that keep reserves in a lot of them, and trade one for the other all the time to keep their ratio.
How is this ok? A market crash multiple exchanges go down and/or withdrawals certainly become very hard - this was submitted earlier to hn about Binance:
I haven’t traded in crypto so please take it with a grain of salt.
If someone is selling BTC for USD then someone is doing the same in the other direction. From Gameshop saga we do know that USD takes time to travel between different parties, in this case from buyer to coin base and then from coin base to seller. Unless USD payment is instantaneous there will be some form of T + 1 isn’t it? What am I missing here?
People trade derivative coins such as USDC, USDT and BUSD that pair with coins such as BTC or ETH. These are basically stable coins that track the USD. Therefore trades are nearly instant. Withdrawing USD from the platform involves selling your derivate coins for fiat.
Crypto exchanges have thr crypto and the fiat posted by customers ahead of time. Settlement is instant, it's withdrawal that takes time on the USD side. In stocks the various broker dealers are essentially loaning each other the money and stock and sorting it out in three days.
Dear dev team... please get back to work. Our brick & mortar business is still humming along, paying your salary and needs your help... and you now need us to 'buy the dip'.
I'm really furious Coinbase for an unrelated incident.
I bought a bunch of BTC back in 2018 on Coinbase and just left it there, I rarely checked it. Fast forward to 2021 and I want to see how my portfolio has grown, only to be told my account was disabled. This was back at the beginning of March. So I contacted them and told them my issue. They sent me instructions on changing passwords, calling my mobile service provider etc. Some ridiculous stuff. I did it all. Only for them to tell me that they have to forward my case to a specialist. 3 weeks later, they come back to me telling me to repeat the same steps as I did before, and I complied, only for them to tell me they are again forwarding it to a specialist. Another 3 weeks later, they tell me to repeat the same steps in addition to taking a photo of myself holding my ID with a sign that says 'For Coinbase verification'. Did that degrading stuff too. Guess what they told me again, oops we are forwarding it to a specialist.
I don't know whether it is automated supported or what but this is absolutely disgusting and there is no name to the emails, just 'Coinbase Support'.
The same thing happened to me on Bittrex for two years. The requirements of the photo holding the paper are asinine (one looking at the camera, one facing right, one facing left) and then they rejected the photos because "my elbows did not show". Next they will ask me to record a video of myself doing some silly dance for their amusement I guess.
As soon as I regained access all took all my shitcoins and moved them to a wallet for which I have the key.
Centralized exchanges suck, they are completely against the principles of Cryptocurrencies.
The photo of you holding a photo ID is standard practice these days. Afaik, everyone creating an account has to do that, and apparently it applies to old accounts as well. It's because CoinBase is trying to be fully legal/compliant with US law. Plus, they're FDIC insured.
I'm a bit of a cryptocurrency newbie, but I know enough about it to know that centralized exchanges are not what cryptocurrency is really about. It's more about spending with cryptocurrency (in a decentralized way) instead of exchanging some fiat for it, and vice versa, no? It's a bit of chicken and egg problem I suppose (If I want Bitcoin I need some fiat to get it in some cases), unless I acquire Bitcoin via some other method (like stealing/mining it)?
Edit: Also: Since most people need USD to get Bitcoin (or other coins), doesn't that mean all cryptocurrencies are inherently gold-backed and rely on the value-store of gold? (Excuse my naive question. Again; I'm a newbie).
I think that very few people are actually paying with cryptocurrency right now. As long as it's as volatile as today (and in the case of BTC, transactions are so expensive and slow), it's mostly speculation about which system may be used in the future.
People realised some time ago that Bitcoin isn't actually fit for purpose for most payments because transactions take so long to close. So it's now pivoted to this value idea of storing "value". Absolute house of cards.
It's not even that. The two main problems are that Bitcoin in non fungible - that is 1 BTC != 1 BTC, and that comes from the second problem - BTC isn't anonymous, in the sense that all transactions are publicly available and there are tools already that give great deal of deanonymisation capabilities. Now if you use a tumbler to get "fresh" coins, it may be that some of the source coins were involved in hacks or drug deals and are blacklisted. This means when you'll try to withdraw you likely get them confiscated and get yourself in trouble.
> It's more about spending with cryptocurrency (in a decentralized way)
That was the original intent, but it's been known for years now that cryptocurrencies just don't work for that scenario. As soon as volume grows, transaction times and costs soar to levels that are unsustainable for actual payments. So most cryptocurrencies have since turned into speculative digital commodities, arbitrary items that get value out of being unregulated, transnational, and anonymous or pseudonymous. They allow money to flow internationally outside of the official banking system, untroubled by pesky anti-money-laundering laws or anything protecting investors. Exchanges on the fringes deal with the trouble of converting them back into money and goods... at least as long as governments allow them to do it.
The NYGA report on Tether is due today. Tether is completely insolvent, and once the rug is pulled, all of the exchanges are going to realize that all of their "stable" reserves are worthless and they can't pay out what they're storing for customers, and the price will tumble all the way down as there's a run on the pseudo-banks that can't payout.
You do know that Coinbase has a $50k a day withdrawal limit? A lot of doomsday scenarios leave out this important detail when talking about a hypothetical bank run.
Given the price volatility of crypto, that sounds absolutely insane to me. Also, I don't think this prevents a run, on the contrary, when everyone hits the sell button and cannot actually exit then panic will ensue.
True but it still makes a single day hit via Coinbase users predictable - which gives them data they'd need to pull different levers including when they use reserve funds they're controlling for buy orders from large institutions; likewise they'll know when the bank run is trending too fast and they'd need to hit the breaks by making Coinbase inaccessible.
The exchanges handle that part of the "problem" by simply having an outage. The withdrawal limit solves the rest of the problem by limiting how much USDT can be converted to USD.
That's a USD limit. Since Coinbase is FDIC insured, I expect they have the cash-reserves to actually survive a run denominated in dollars. Even if Coinbase itself goes under, FDIC will make your dollar value whole (up to $250,000 per banking institution)
You know, the whole benefit of being in the USD. The made up rules of society that provide stability in times of crisis.
Coinbase and FDIC insurance seems tricky at best... I think it only covers deposits made via cash from federally recognized institutions, and will only be covered if you leave it as cash.
If you are transferring tokens in and/or converting tokens to cash, I don't believe those transactions would meet the criteria to be covered by FDIC at that point. I might be wrong on that assumption, but FDIC is only deposit insurance, not withdraw insurance, and its under very specific terms.
If an FDIC insured account says "$100,000" in it, and then Coinbase goes under... you get $100,000 from it. Maybe in a few months after bankruptcy court figures out the details. But... yeah, the FDIC insurance definitely covers the stated balance.
If you have $99,990 in BTC, and $10 in cash, only the $10 is covered.
Coinbase could shut down converting crypto to cash at any time. There is no promise or guarantee that they have to allow cash exchanges or deposits, since they're basically buying and selling crypto on your behalf.
> If you have $99,990 in BTC, and $10 in cash, only the $10 is covered.
By the FDIC. Of course, FDIC only covers dollar-denominated balances (savings accounts, checking accounts, etc. etc.). Even money-market accounts (very cash-like) are NOT covered by FDIC, which is why money-markets get a wee bit of a bump in %yield.
Coinbase claims they have the BTC insured through some other means. I don't know how to look into those details or how trustworthy it'd be (ex: AIG "insured" a bunch of mortgages through Credit Default Swaps, which ended up being worthless).
But overall, the idea of losing a security through various means (ex: Credit Default Swap "insurance" turns out to be a sham and the mortgage debt is all worthless) is kind of "normal" in terms of financial markets.
Similarly, if all the BTC disappeared it'd be terrible for BTC-holders, but I think people generally understand that those risks exist.
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Look, I think Cryptocoins are stupid at this point (even proof of stake, but that's another thing). And Coinbase's service going in-and-out over the past day or so is clearly a threat (if BTC moves while Coinbase is down, you lose your opportunity to buy-and/or-sell at the prices you want).
But I don't think there's anything shady going on at Coinbase specifically.
------
Now if you want to talk about shady business, we can talk Binance, Bitfinex, and Tethers. Plenty of shady things going around in the cryptoworld.
It still would slow down a bank run, and Coinbase conveniently/suspiciously going down when bank runs seem to start would further cut off impulse selling - and arguably long enough for manipulation to happen elsewhere to turn price into upward trend again to quell impulse selling by potentially artificially making the price look like it's rebounding.
I did notice they stopped printing some time this week after months adding billions of dollars. For anyone curious you can easily see tether printing by checking at USDT market cap increase.
Until it does. If everyone tries to get out of tether at once there could be a run on the currency and a collapse. If tether has been manipulating prices (seems likely) that will also come out in the crash.
As of press time, USDT (Tether) is currently trading at a slight premium to USDC[1]. There's no indication that the market is pricing an imminent collapse to Tether.
I don't trust those prices I'm afraid - the price of most cryptocurrencies is manipulated heavily, and this one in particular by printing tether - the peg is a lie (as shown by AG investigation), the backing is a lie (as shown by Tether's admissions), and it's going to zero eventually IMO when the lies unravel. See this recent story for more detail:
Currently people are fleeing to Tether, so of course the price is up. The implication of the parent comment was that the Tether printer could be getting out today, which would cause BTC to drop.
The question then becomes what happens tomorrow. Are people going to try to get out of the Tether that they've jumped into today by going to BTC or USD? If they go to BTC, then no problem, the price goes back up (some). If they try to go to cash, BTC keeps dropping. Tether's value doesn't have to crash for the Tether machine to stop running and cause a BTC crash. Though, at some point in the process it would start dropping, and that would then cause a further BTC price drop.
That happened in May-Jun 2019. Auditor's report came out that Tether was insolvent, there was a run on the bank, Bitfinex suspended redemptions of Tether, Binance suspended trading in Tether.
The price of Bitcoin went up, from about $5200 to $11,000. Why? Because with Tether out of the picture, Bitcoin is the next most stable cryptocurrency (at the time, there was not enough DAI or USDC in circulation to absorb all the Tether money, though those "stablecoins" traded at a premium of about $1.06/$0.92 against Tether). If you're in the cryptocurrency ecosystem, it's usually because you don't want to keep any of your wealth in $USD, so when Tether was declared insolvent all of the money there rushed into BTC.
A global, decentralized MLM-Ponzi scheme in an irrational market could last decades - especially with the manipulation of the market and regulatory capture efforts.
Edit to add: It's part of the cycle of educating society, it'll be painful and costly to those who were left holding the bag - a mob of potentially 100s of millions of people financial aligned hoping they can get more of society convinced of their ideology of Bitcoin's supposed exclusive value.
One way to reason about why it doesn’t matter: insolvency is not the key part of the financial survival constraint, liquidity is. You could think of tether as just “leveraged” against its underlying USD holdings. It’s only problematic if there is a run on tether, so to speak, where it does not have enough liquidity of USD reserves to satisfy redemptions. (There’s some kind of a limit on redemption though, right?)
The same is true for other types of money - a bank does not hold reserves (assets) against all of its deposits (liabilities), but that does not prevent it from operating, or from bank customers understanding bank deposits as “real money”.
To be clear, I’m not very informed about tether, and as a lay person I do find it to be a shocking situation that probably makes sense to label as fraud. I’m just trying to offer some explanation.
I recommend to look at the tether trading volume. If too many people are requesting their dollars at the same time, tether will go bankrupt and with it the bulk of the 'value' of the crypto empire.
(hard to get a site that is up and has a good chart for that rn..)
"To be crystal clear: every time you sell Tethers on Kraken, you are forcing Tether Ltd. to pay you in US dollars. If you can manage to sell enough Tethers for USD on Kraken, then Tether Ltd. will run out of dollars and this whole machine — which currently undergirds 70% of all crypto trading flows — will fall apart.
Well-capitalized hedge fund managers may wish to re-read the above paragraph, and ponder its implications."
> will run out of dollars and this whole machine will fall apart
Sounds like it could be three things:
1) Their USD standard is bunk. If you're on a commodity money - or secondary exchange money - standard then you can only issue as many certs as there are units of that money in your reserves. With the XAU standard, you can't just mint gold certs without gold underlying it. That's not how any of this works!
2) They just FDR'ed their users, and took them off the USD standard but didn't tell them.
3) Less technically: sounds like they're skimming off the USD for themselves and hoping everyone doesn't divest at the same time. This could be either fraud, or it could just be incomitance, ignorance or any other *ance really.
I think it's nothing as dramatic as (1). Just that instead of holding USD currency, they're holding equivalent "commercial paper"[1]. This means that everything will be ok as long as they can sell these bonds when the time comes. But if any of the held bonds fail or decrease in value, Tether will be in serious trouble.
I could see Tether becoming insolvent if/when there is another financial crisis that reveals some of these bonds as junk.
I can definitely see that being the case. The only issue here is that if you're actually just holding bonds and not cash, saying your currency is on a USD standard is patently false.
If your currency is backed by some kind of non-cash instrument, then what you've actually got is some kind of ETF like structure, not a currency qua exchange currency.
After Tether allegedly lost high 9 figures to a "scam" #1 seems not that unlikely.
"Last week, New York Attorney General Letitia James announced that iFinex—the parent company of Bitfinex, an exchange, and Tether, a dollar-backed digital token—is under investigation for fraud. At issue is $850 million that disappeared from Bitfinex’s coffers in mid-2018. The funds may have been stolen while in the possession of Crypto Capital, a payments processing company based in Panama. Crypto Capital has also been tied to Quadriga, a Canadian exchange which lost $140 million a few months ago."
You say it as if it is regulated. They will simply put a stop for real customers and pump some orders in the market to keep the peg. I fail to see how they can fail except massive incompetence in managing this scheme.
According to their Terms and Conditions, Tether has no obligation whatsoever to redeem their currency for dollars, so while they may not be backed (and almost certainly are not), a bank run is not really their problem.
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[ 0.51 ms ] story [ 321 ms ] thread"Investigating - We are currently investigating this issue. May 19, 06:12 PDT"
t. anarchists
Which also asks the next question, how much of the price action and volume is automated trading in these platforms?
Not that automated is necessarily good or bad - but how much is a retail interest
Gg for those of you who maxed out credit cards to buy crypto
[0] https://help.coinbase.com/en/coinbase/privacy-and-security/o...
Not an expert in legal and financial matters, but that sounds like it would start a FBI inquiry and even prison-time for all those involved.
Never.
Except that most of the time that means nothing in practice.
Just look at the GME saga and you have customers liquidated, customers not being able to buy, some not even able to sell. And on top of that the CEO of Interactive Brokers setting a target price for the stock.
All this so that few highly leveraged hedge funds can get away from the short squeeze cheaper along with their lender/broker.
People can sue coinbase and any other shady broker as well. If you've lost 10K I doubt you are willing to spend even more to get it back in court be it coinbase, RobinHood or any other exchanger/broker with an army of lawyers.
Still, for all the BS lawyers get, much of it deserving, for every lawyer behind the brokers/investors/funds there are others representing the victims. These are the types of lawsuits that include egos so big that sometimes discovery of emails/communications and the prospects of sitting for depositions result in a resolution, and even change.
It’s funny you mention the army of lawyers, because many of these cases have been consolidated and one 1 Zoom hearing were 141 lawyers…they represented the plaintiffs.
I have not heard any anecdotes about US exchanges not allowing selling/exiting existing positions. In fact, on of the arguments from GMEanon is that disabling buying and keeping selling open drove the price down. There is nothing illegal about a broker disabling entering a new position (buying stock).
There are several days in the last month, according to Tether, with AT LEAST $500M of inflows.
A single $1B of outflows shouldn't tank a market like this by 40%...
The original Bitcoin whitepaper from Satoshi Nakamoto is available here: https://bitcoin.org/bitcoin.pdf
It is titled "Bitcoin: A Peer-to-Peer Electronic Cash System"
So, based just on the title, it's pretty clear that it's original intent was as an electronic payment method.
The first sentence of the abstract is: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution"
If you read the rest of the whitepaper it's pretty clear that the original intent was as a mechanism to facilitate payments and transactions.
Clearly, at least one person (the author of the whitepaper!) "desired" Bitcoin as a payment method. They desired it so much, that they went off an invented it!
If that doesn't count as a source indicating what someone "desires" then nothing does.
It depends what kind of market you think it is. The fact is there's no economic fundamental supporting the value of Bitcoin, so it's value is just whatever speculators are willing to pay at any given time.
[0] https://twitter.com/elonmusk/status/1394170030741413888
[1] https://www.cnbc.com/2021/05/16/elon-musk-suggests-tesla-is-...
It’s fascinating stuff to follow — watch the VIX today, a measure of stock market volatility. It’s absolutely soaring already.
https://www.cnn.com/2021/05/19/investing/bitcoin-price-drop-...
If you are confident about the long term prospects of an investment, then holding on for longer might just work. I won't be selling any of my Eth or PoS crypto currencies any time soon. It helps that crypto makes up less than 15% of my portfolio.
I don't like active trading a lot, but if I did, then this would be ideal.
In fact I think you could turn that into a partial numerical measure of the crypto market. In a mature market where "cryptocurrenciness" is mostly just a fact of life, they ought to be less correlated as they have independent lives of some sort. (They'll never be completely uncorrelated, of course, since the whole market is correlated to some degree.) Right now it's still enough of a novelty that the mere fact of cryptocurrenciness is a big percentage of the appeal of a given cryptocurrency.
Estimates put 65-75% of BTC mining in China. That just became a pretty shaky foundation.
All cryptocurrencies are basically the same and indistinguishable and fulfill the same needs.
It's not unexpected that they are correlated.
https://www.reddit.com/r/binance/comments/nea291/weekly_bina...
If someone is selling BTC for USD then someone is doing the same in the other direction. From Gameshop saga we do know that USD takes time to travel between different parties, in this case from buyer to coin base and then from coin base to seller. Unless USD payment is instantaneous there will be some form of T + 1 isn’t it? What am I missing here?
https://www.cnn.com/2021/05/19/investing/bitcoin-price-drop-...
I bought a bunch of BTC back in 2018 on Coinbase and just left it there, I rarely checked it. Fast forward to 2021 and I want to see how my portfolio has grown, only to be told my account was disabled. This was back at the beginning of March. So I contacted them and told them my issue. They sent me instructions on changing passwords, calling my mobile service provider etc. Some ridiculous stuff. I did it all. Only for them to tell me that they have to forward my case to a specialist. 3 weeks later, they come back to me telling me to repeat the same steps as I did before, and I complied, only for them to tell me they are again forwarding it to a specialist. Another 3 weeks later, they tell me to repeat the same steps in addition to taking a photo of myself holding my ID with a sign that says 'For Coinbase verification'. Did that degrading stuff too. Guess what they told me again, oops we are forwarding it to a specialist.
I don't know whether it is automated supported or what but this is absolutely disgusting and there is no name to the emails, just 'Coinbase Support'.
As soon as I regained access all took all my shitcoins and moved them to a wallet for which I have the key.
Centralized exchanges suck, they are completely against the principles of Cryptocurrencies.
Edit: Also: Since most people need USD to get Bitcoin (or other coins), doesn't that mean all cryptocurrencies are inherently gold-backed and rely on the value-store of gold? (Excuse my naive question. Again; I'm a newbie).
It hasn't been about actually using it for years now.
Kinda weird you left that out but mentioned stealing, although I suppose ransomware is top of mind these days.
Are you saying Bitcoin and other cryptocurrencies are inherently gold-backed like the USD?
That was the original intent, but it's been known for years now that cryptocurrencies just don't work for that scenario. As soon as volume grows, transaction times and costs soar to levels that are unsustainable for actual payments. So most cryptocurrencies have since turned into speculative digital commodities, arbitrary items that get value out of being unregulated, transnational, and anonymous or pseudonymous. They allow money to flow internationally outside of the official banking system, untroubled by pesky anti-money-laundering laws or anything protecting investors. Exchanges on the fringes deal with the trouble of converting them back into money and goods... at least as long as governments allow them to do it.
The NYGA report on Tether is due today. Tether is completely insolvent, and once the rug is pulled, all of the exchanges are going to realize that all of their "stable" reserves are worthless and they can't pay out what they're storing for customers, and the price will tumble all the way down as there's a run on the pseudo-banks that can't payout.
Or not, what do I know.
Presumably, people can sell all their holdings and withdraw over time.
Given the price volatility of crypto, that sounds absolutely insane to me. Also, I don't think this prevents a run, on the contrary, when everyone hits the sell button and cannot actually exit then panic will ensue.
You know, the whole benefit of being in the USD. The made up rules of society that provide stability in times of crisis.
If you are transferring tokens in and/or converting tokens to cash, I don't believe those transactions would meet the criteria to be covered by FDIC at that point. I might be wrong on that assumption, but FDIC is only deposit insurance, not withdraw insurance, and its under very specific terms.
Coinbase could shut down converting crypto to cash at any time. There is no promise or guarantee that they have to allow cash exchanges or deposits, since they're basically buying and selling crypto on your behalf.
By the FDIC. Of course, FDIC only covers dollar-denominated balances (savings accounts, checking accounts, etc. etc.). Even money-market accounts (very cash-like) are NOT covered by FDIC, which is why money-markets get a wee bit of a bump in %yield.
Coinbase claims they have the BTC insured through some other means. I don't know how to look into those details or how trustworthy it'd be (ex: AIG "insured" a bunch of mortgages through Credit Default Swaps, which ended up being worthless).
But overall, the idea of losing a security through various means (ex: Credit Default Swap "insurance" turns out to be a sham and the mortgage debt is all worthless) is kind of "normal" in terms of financial markets.
Similarly, if all the BTC disappeared it'd be terrible for BTC-holders, but I think people generally understand that those risks exist.
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Look, I think Cryptocoins are stupid at this point (even proof of stake, but that's another thing). And Coinbase's service going in-and-out over the past day or so is clearly a threat (if BTC moves while Coinbase is down, you lose your opportunity to buy-and/or-sell at the prices you want).
But I don't think there's anything shady going on at Coinbase specifically.
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Now if you want to talk about shady business, we can talk Binance, Bitfinex, and Tethers. Plenty of shady things going around in the cryptoworld.
On the day you might think that limit matters, it's not really gonna matter.
We all know it's insolvent. Apparently it doesn't matter.
[1]https://info.uniswap.org/#/pools/0x7858e59e0c01ea06df3af3d20...
https://news.ycombinator.com/item?id=27151370
The question then becomes what happens tomorrow. Are people going to try to get out of the Tether that they've jumped into today by going to BTC or USD? If they go to BTC, then no problem, the price goes back up (some). If they try to go to cash, BTC keeps dropping. Tether's value doesn't have to crash for the Tether machine to stop running and cause a BTC crash. Though, at some point in the process it would start dropping, and that would then cause a further BTC price drop.
The price of Bitcoin went up, from about $5200 to $11,000. Why? Because with Tether out of the picture, Bitcoin is the next most stable cryptocurrency (at the time, there was not enough DAI or USDC in circulation to absorb all the Tether money, though those "stablecoins" traded at a premium of about $1.06/$0.92 against Tether). If you're in the cryptocurrency ecosystem, it's usually because you don't want to keep any of your wealth in $USD, so when Tether was declared insolvent all of the money there rushed into BTC.
Edit to add: It's part of the cycle of educating society, it'll be painful and costly to those who were left holding the bag - a mob of potentially 100s of millions of people financial aligned hoping they can get more of society convinced of their ideology of Bitcoin's supposed exclusive value.
The same is true for other types of money - a bank does not hold reserves (assets) against all of its deposits (liabilities), but that does not prevent it from operating, or from bank customers understanding bank deposits as “real money”.
To be clear, I’m not very informed about tether, and as a lay person I do find it to be a shocking situation that probably makes sense to label as fraud. I’m just trying to offer some explanation.
Personally I don’t care - let it collapse if they did anything shady, but this zerohedge-esque “broken clock” strategy is extremely amusing.
(hard to get a site that is up and has a good chart for that rn..)
Was just going to ask what you would recommend to monitor that. In better times, what would be the best resources?
Jump to the 7d view
Posted on HN a while back.
"To be crystal clear: every time you sell Tethers on Kraken, you are forcing Tether Ltd. to pay you in US dollars. If you can manage to sell enough Tethers for USD on Kraken, then Tether Ltd. will run out of dollars and this whole machine — which currently undergirds 70% of all crypto trading flows — will fall apart.
Well-capitalized hedge fund managers may wish to re-read the above paragraph, and ponder its implications."
Sounds like it could be three things:
1) Their USD standard is bunk. If you're on a commodity money - or secondary exchange money - standard then you can only issue as many certs as there are units of that money in your reserves. With the XAU standard, you can't just mint gold certs without gold underlying it. That's not how any of this works!
2) They just FDR'ed their users, and took them off the USD standard but didn't tell them.
3) Less technically: sounds like they're skimming off the USD for themselves and hoping everyone doesn't divest at the same time. This could be either fraud, or it could just be incomitance, ignorance or any other *ance really.
I could see Tether becoming insolvent if/when there is another financial crisis that reveals some of these bonds as junk.
[1] https://www.coindesk.com/tether-first-reserve-composition-re...
If your currency is backed by some kind of non-cash instrument, then what you've actually got is some kind of ETF like structure, not a currency qua exchange currency.
"Last week, New York Attorney General Letitia James announced that iFinex—the parent company of Bitfinex, an exchange, and Tether, a dollar-backed digital token—is under investigation for fraud. At issue is $850 million that disappeared from Bitfinex’s coffers in mid-2018. The funds may have been stolen while in the possession of Crypto Capital, a payments processing company based in Panama. Crypto Capital has also been tied to Quadriga, a Canadian exchange which lost $140 million a few months ago."
https://qz.com/1607657/tether-could-bring-down-bitcoin-after...
Please link to the HN article: https://news.ycombinator.com/item?id=25788409
But otherwise: smart move. :D