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Can we stop describing ICO raises in USD? They raised ethereum tokens (ETH). The value of those tokens is specious, as there is no liquidity for the volume of E

by dpiers 9y ago

Can we stop describing ICO raises in USD? They raised ethereum tokens (ETH). The value of those tokens is specious, as there is no liquidity for the volume of ETH raised. Based on current ETH/USD rates, the USD figure given translates to ~614K ETH. The value of 614K ETH has ranged from 92MM USD to 240MM USD in the last two months, and has been as low as 4.3MM USD since the beginning of the year.

dahdum 9y ago
"as there is no liquidity for the volume of ETH raised" Volume is over $80 million in the ETH-USD pair over the past 24 hours, on just two exchanges (Coinbase/GDAX, Bitfinex). Add in CNY, KRW, EUR and the true liquidity is much higher than that. Edit: https://coinmarketcap.com/currencies/ethereum/#USD https://coinmarketcap.com/currencies/ethereum/#USD
- 101km 9y ago
  There are no exchanges that will let you withdraw $xx million a day in fiat. They'll need to spread the ETH to basically all the big exchanges, with multiple bank accounts attached, and liquidate large sums everyday for months and hope none of the accounts get frozen. Still quite the windfall even if realistically just a fraction of the sums being thrown around.
  - dahdum 9y ago
    GDAX & Gemini will definitely let you withdrawal millions per day, you just need to be verified and clear from AML/KYC standpoint.
  - Animats 9y ago
    There are no exchanges that will let you withdraw $xx million a day in fiat. That's why your lawyers and their lawyers have to negotiate this up front and have a deal with penalties signed before any transactions take place. If you're dealing with amounts that big, you do that.
Animats 9y ago
I really want to hear the story when someone dumps $100M worth of Etherium. Or Bitcoin. I wonder what would happen if you went to an Bitcoin exchange and said "I want to sell $100M worth of Bitcoins over the next 30 days. I'll pay your usual fees. After each day's sales, you wire transfer the proceeds to my bank within one business day, and you agree to a sizable penalty if you're late. Any validation of identity you want to do takes place before we do any business."
- patothon 9y ago
  well if you find people buying these coins, what's the problem? That's the concept of an exchange. It'll definitely drive the price down ,so that would be a weird thing to do anyway, except if you _want to_ drive the price down.
- SomeStupidPoint 9y ago
  $100M in BTC is... ~29,000BTC. Let's call it 30,000BTC. GDAX seems to handle 5k-10kBTC on a normal day. So liquidating in a month would be 10-20% of the trading volume on GDAX, every day for a month. Even pushing it out to 3 months liquidating, it would be a sizable portion of the sales. (This would be 0.250BTC/min for 90 days.) I, too, would like to see what happened if someone liquidated a position that quickly. (Of course, if you had $100M in BTC, you'd probably want to liquidate over the course of a year -- where you'd still be sizable traffic, but perhaps not completely crash the price. This would be 0.06BTC/min for a year.) Edit: Looking closer, GDAX seems to have a volume of about 6BTC/min. So the volume estimates for clearing 30kBTC in X days: 30 days - 11.5% 90 days - 3.8% 365 days - 0.95% GDAX is about 10% of the BTC volume globally, so you're talking 0.1%-1.2% of BTC volume being that clearing, for between a month and a year.
  - dahdum 9y ago
    You'd also want to look for an OTC buyer at those levels. Gemini will facilitate those transactions and I think a couple others too. I don't have much experience in that area though.
- dahdum 9y ago
valuepack 9y ago
Well in this case USD might be the best metric, as Filecoin isn't traded like a typical token on the ethereum blockchain like past ICOs. This ICO was done on Coinlist [1]. Filecoin tokens don't even exist yet and won't even be on the ethereum blockchain. You're purchasing tokens in advance that will be given to you in the genesis block on Filecoin's platform whenever it launches. I would be curious to see the ratios of the currencies involved in their funding. I.e how much raised was in raw USD vs ETH vs Bitcoin. Maybe most was in fact ETH? I have no idea, I haven't seen those numbers listed anywhere. [1]. https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf
siong1987 9y ago
This isn't correct, you can actually fund the Filecoin ICO with cash(USD), BTC, and also ETH[1] as long as you are an accredited investor. 1. https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf
panarky 9y ago
The flaws in Filecoin’s token sale: 1) Filecoin gave an amazing deal to their buddies, just a few weeks ago 2) Filecoin is being insanely greedy 3) Early clickers are incentivized, price unknown 4) Protocol Labs and Filecoin foundation are keeping 2x the coins that investors will get Source: https://medium.com/token-economy/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://medium.com/token-economy/the-analysis-filecoin-doesn...
mrb 9y ago
"no liquidity for the volume of ETH raised" Look again. Poloniex alone exchanges $1 billion dollars, 3M ETH, on the ETH/BTC pair, weekly. https://cryptowat.ch/poloniex/ethbtc/1w https://cryptowat.ch/poloniex/ethbtc/1w Volume on the path ETH→BTC→USD is a lot higher than ETH→USD and that's the path that whales dumping ETH take.
- qaq 9y ago
  "Volume on the path ETH→BTC→USD is a lot higher than ETH→USD" which kinda reinforces the point that there is no liquidity
  - jonreem 9y ago
    If you can get USD at the end why does it matter if you have to go through BTC for now? The liquidity is still there.
okc 9y ago
So what? The point in having currency is a speculation of value between entities?
redm 9y ago
"The value of 614K ETH has ranged from 92MM USD to 240MM USD in the last two months," As I see it that's irrelevant. Whats relevant is the value at the time of the investment. As of yesterday, they raised Ethereum that had a then value of $186m. The fact that it may go up or down tomorrow is irrelevant.

by dpiers 9y ago

dahdum 9y ago

"as there is no liquidity for the volume of ETH raised" Volume is over $80 million in the ETH-USD pair over the past 24 hours, on just two exchanges (Coinbase/GDAX, Bitfinex). Add in CNY, KRW, EUR and the true liquidity is much higher than that. Edit: https://coinmarketcap.com/currencies/ethereum/#USD https://coinmarketcap.com/currencies/ethereum/#USD

101km 9y ago
There are no exchanges that will let you withdraw $xx million a day in fiat. They'll need to spread the ETH to basically all the big exchanges, with multiple bank accounts attached, and liquidate large sums everyday for months and hope none of the accounts get frozen. Still quite the windfall even if realistically just a fraction of the sums being thrown around.
- dahdum 9y ago
  GDAX & Gemini will definitely let you withdrawal millions per day, you just need to be verified and clear from AML/KYC standpoint.
- Animats 9y ago
  There are no exchanges that will let you withdraw $xx million a day in fiat. That's why your lawyers and their lawyers have to negotiate this up front and have a deal with penalties signed before any transactions take place. If you're dealing with amounts that big, you do that.

Animats 9y ago

I really want to hear the story when someone dumps $100M worth of Etherium. Or Bitcoin. I wonder what would happen if you went to an Bitcoin exchange and said "I want to sell $100M worth of Bitcoins over the next 30 days. I'll pay your usual fees. After each day's sales, you wire transfer the proceeds to my bank within one business day, and you agree to a sizable penalty if you're late. Any validation of identity you want to do takes place before we do any business."

patothon 9y ago
well if you find people buying these coins, what's the problem? That's the concept of an exchange. It'll definitely drive the price down ,so that would be a weird thing to do anyway, except if you _want to_ drive the price down.
SomeStupidPoint 9y ago
$100M in BTC is... ~29,000BTC. Let's call it 30,000BTC. GDAX seems to handle 5k-10kBTC on a normal day. So liquidating in a month would be 10-20% of the trading volume on GDAX, every day for a month. Even pushing it out to 3 months liquidating, it would be a sizable portion of the sales. (This would be 0.250BTC/min for 90 days.) I, too, would like to see what happened if someone liquidated a position that quickly. (Of course, if you had $100M in BTC, you'd probably want to liquidate over the course of a year -- where you'd still be sizable traffic, but perhaps not completely crash the price. This would be 0.06BTC/min for a year.) Edit: Looking closer, GDAX seems to have a volume of about 6BTC/min. So the volume estimates for clearing 30kBTC in X days: 30 days - 11.5% 90 days - 3.8% 365 days - 0.95% GDAX is about 10% of the BTC volume globally, so you're talking 0.1%-1.2% of BTC volume being that clearing, for between a month and a year.
- dahdum 9y ago
  You'd also want to look for an OTC buyer at those levels. Gemini will facilitate those transactions and I think a couple others too. I don't have much experience in that area though.
dahdum 9y ago

valuepack 9y ago

Well in this case USD might be the best metric, as Filecoin isn't traded like a typical token on the ethereum blockchain like past ICOs. This ICO was done on Coinlist [1]. Filecoin tokens don't even exist yet and won't even be on the ethereum blockchain. You're purchasing tokens in advance that will be given to you in the genesis block on Filecoin's platform whenever it launches. I would be curious to see the ratios of the currencies involved in their funding. I.e how much raised was in raw USD vs ETH vs Bitcoin. Maybe most was in fact ETH? I have no idea, I haven't seen those numbers listed anywhere. [1]. https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf

siong1987 9y ago

This isn't correct, you can actually fund the Filecoin ICO with cash(USD), BTC, and also ETH[1] as long as you are an accredited investor. 1. https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf https://coinlist.co/static/media/How-to-Invest.0a9f70b4.pdf

panarky 9y ago

The flaws in Filecoin’s token sale: 1) Filecoin gave an amazing deal to their buddies, just a few weeks ago 2) Filecoin is being insanely greedy 3) Early clickers are incentivized, price unknown 4) Protocol Labs and Filecoin foundation are keeping 2x the coins that investors will get Source: https://medium.com/token-economy/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c https://medium.com/token-economy/the-analysis-filecoin-doesn...

mrb 9y ago

"no liquidity for the volume of ETH raised" Look again. Poloniex alone exchanges $1 billion dollars, 3M ETH, on the ETH/BTC pair, weekly. https://cryptowat.ch/poloniex/ethbtc/1w https://cryptowat.ch/poloniex/ethbtc/1w Volume on the path ETH→BTC→USD is a lot higher than ETH→USD and that's the path that whales dumping ETH take.

qaq 9y ago
"Volume on the path ETH→BTC→USD is a lot higher than ETH→USD" which kinda reinforces the point that there is no liquidity
- jonreem 9y ago
  If you can get USD at the end why does it matter if you have to go through BTC for now? The liquidity is still there.

okc 9y ago

So what? The point in having currency is a speculation of value between entities?

redm 9y ago

"The value of 614K ETH has ranged from 92MM USD to 240MM USD in the last two months," As I see it that's irrelevant. Whats relevant is the value at the time of the investment. As of yesterday, they raised Ethereum that had a then value of $186m. The fact that it may go up or down tomorrow is irrelevant.