Worries Grow That the Price of Bitcoin Is Being Propped Up
nytimes.com
nytimes.com
“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'.
> 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?
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.
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.
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.
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?
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:
That's huge. If this volume is based on fake dollars then I think the entire space could be massively inflated.
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.
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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.
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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!
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 this weren't the case, HN may find itself completely buried by this topic, as well as the spammers that come with it.
Never looked at the NYT as a satirical publication.