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Bitcoin Exchanges Are Buckling While the Price Surges Past 16,000
- aaavl2821 9y agoi don't have anything of real value to add here, and have never owned bitcoin (and probably never will), but this is an incredibly fascinating phenomenon to watch as a disintereted, underinformed party. i laughed out loud in amazement (not sarcastically or scornfully, just in amazement) when i saw it passed $16K it is unlike anything most people in the world have probably ever seen
- elsewhen 9y agoIt is reminiscent of the tech stock boom in the late 90s
- sidcool 9y ago$19,000 now
- adrr 9y agoBack at $16k. Big banks are pulling support for a futures market for bitcoin due to volatility.
- chatmasta 9y agoShouldn’t a futures market ultimately reduce volatility by enabling (synthetic) short selling?
- placeybordeaux 9y agoLast time I checked they would only pull the price once a day. Not sure how much that would actually help
- dx034 9y agoThe futures market will do the rest. Only settlement is once a day. But as the bitcoin price moves (which indicates that the settlement price that evening will be different), actors will buy and sell which should bring the futures market in line with the bitcoin price. So in the end you'll end up with a pretty close mirror. You only need 1-2 algo traders for that.
- sidcool 9y agoQuite dramatic. It's changing faster than we can react.
- Cthulhu_ 9y agoThis is why the soft/hardware for real exchanges (not-btc) are some of the most hardcore pieces of kit out there.
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- TDL 9y agoCurious if you have any source links for banks pulling out. It seems like smart risk management to back off supporting a BTC futures contract right now.
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- cs702 9y agoMany are scratching their heads: "WTF? Bubble!? When will Bitcoin come crashing down?" The thing is, individuals and institutions worldwide currently own around $300 trillion in financial assets.[a] If as a group they decide to hold, say, 2% of their financial wealth in Bitcoin, say, to diversify away from all nations on earth, then Bitcoin's market capitalization would go up 30x, from around $0.2 trillion to $6 trillion. The number of bitcoins is fixed, so the price would go up by the same multiple. In short, all it takes is for the world to want a tiny exposure to Bitcoin. Note that before Bitcoin it was impossible to diversify away from all nation-specific risks. [a] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/ http://money.visualcapitalist.com/worlds-money-markets-one-v...
- beamatronic 9y agoWhy is gold being ignored then?
- s73ver_ 9y agoThey likely also have gold, but they already bought it long ago.
- Snackchez 9y agoYou can't transfer gold at will across the world. Although BTC is claimed to be a "store of value", it can also be transferred around fairly easily (with very little friction). It can also be exchanged for many different currencies.
- chatmasta 9y agoBecause nothing has changed about gold, whereas bitcoin is new. Any investor putting 2% of their value into gold is already doing it. Investors putting 2% into BTC couldn’t do it before it existed, or matured to where it is now.
- vinceguidry 9y agoYou either have to hold gold, which is dangerous and again contingent on avoiding nation-state failure risk, or you have to trust someone else to hold gold, which is perhaps as risky but the risks have a different profile.
- jjxw 9y ago"As long as the music is playing, you’ve got to get up and dance." -Charles Prince, Ex-Citibank CEO 2007 This is one of my favorite modern finance quotes on bubbles because it encapsulates so well why there is still momentum in this crypto bubble even after an even casual reading of the news will tell you that everyone and their grandparents believes it's a bubble. My bet is that heavy regulation in a market where there is heavy trading (e.g. USA, Japan, Korea) will be the blow that bursts this, but as with everything in public markets, who knows?
- lawlessone 9y agoThis is stupid, i'm saying that as someone that holds a small amount. People are just speculating ,instead of adopting ,and undermining it's utility.
- ihsw2 9y agoWhat utility? It has no intrinsic value.
- tinco 9y agoIt has no utility, only intrinsic value.
- neals 9y agoIt has no intrinsic value, just utility.
- chatmasta 9y agoThe value of something is what somebody will pay for it. If you disagree with this, I challenge you to give an example of something that fits your description of intrinsic value. That is, something that would still have “value” even if nobody in the world were willing to pay for it.
- api 9y agoArable land, antibiotics. The latter would be worth many many times the value of gold in a post-collapse scenario.
- aaavl2821 9y agofood air water sunlight sex
- programmarchy 9y agoPeople are willing to pay for all of these things.
- api 9y agoBiosphere failure forensic report by agent 359348349 in outer galactic sector 17: "The third planet began its ascent to technological singularity but became terminally fixated upon the repeated calculation of an obscure cryptographic mathematical function. Nearly all geologically sequestered carbon was rapidly oxidized to provide energy for the computation of this function, triggering a runaway greenhouse effect and transforming the planet's climate to one resembling that of the second planet in this solar system."
- lawlessone 9y agoWhen you put it that way, bitcoin could be a weapon from space..
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- benjaminjackman 9y ago"And as was the case with the second planet in the solar system, before its runaway greenhouse gas death, we expect to see the process repeat itself on the 4th as probes sent from the 3rd again contained micro-organisms which have managed to adapt to climate there and have begun replicating. This time the period should be considerably shorter then the previous 2 billion years as cells with a nucleus have successfully adapted to the 4th, whereas from the 2nd's probes to the 3rd only non-nucleus possessing cells managed to initiate a replication cascade until this terminating event."
- mccoyspace 9y agoIt’s a mind virus breaking out to infect all the world’s humans
- joshbaptiste 9y agoWonder if they'll be a consulting market for IT engineers from the stock market exchanges for the cryptocurrency exchanges since they have experience handling a large volume of transactions etc.. All the current crypto exchanges seize when high volume, stop losses etc.. are triggered at the moment.
- dx034 9y agoMost stock markets stop trading when prices change too much. If this was the case with bitcoin, we'd be limit up each day after a minute or so. The exchanges implementing it would lose out vs. others. So not sure they want to implement that now.
- Cthulhu_ 9y agoYeah this is just the thing - you cannot stop the bitcoin blockchain because it's decentralized, and due to competition, individual exchanges can't call for a stop on trading. They can but people will revoke trust in that exchange and move to another one. If Coinbase is down more often in times like this, they will start losing trust too and people will move to the next best competitor. Then again I think by now Coinbase has built up such a good reputation and whatnot that it'd take a lot for that to happen.
- mccoyspace 9y agoThis is already happening. For example Coinbases’s new COO is ex-Ameritrade
- dewiz 9y agois it possible to buy and sell bc, as quickly as one buy and sell stocks (aka speculating)? last time I checked there were ways but it would take some user verification process to buy, and selling seemed to be very well hidden.
- wereHamster 9y agoSure, most exchanges have an API you can use to automate your trading. The verification is a one-time thing, once you're past that you can trade as quickly as you want.
- lawlessone 9y agoBlocks take approximately 10 minutes, assuming your transaction is on the first block. In a way that might put some brakes on high speed trading, though it could still be automated.
- grandmczeb 9y agoYou can buy/sell at subsecond speed using GDax (part of Coinbase) or one of their competitors.
- Cthulhu_ 9y agoYou can on e.g. gdax, but Bitcoin isn't intended as a high volume trading platform; it handles about 15 transactions per second, and right now there's a backlog of over 200.000 unconfirmed transactions. I'm fairly sure coinbase / gdax has like its own transaction log, guaranteeing that you will get X btc for Y price at the moment you make the transaction, even if the transfer to your own (offline) wallet could take a while.
- LeonM 9y agoMeanwhile, coinbase is down...
- SilasX 9y agoWhat really scares me is that there is divergence across exchanges. As of 9:30am on December 7th (PT), Gemini still shows $16,100 as the 24 hour peak.
- hnarn 9y agoWhy is divergence across exchanges "scary"? It just indicates a chaotic market.
- SilasX 9y agoBecause it means something is stopping the arbitrage trades from happening, like with MtGox and the throttled can't-ever-be-fulfilled withdrawals.
- Cthulhu_ 9y agoYeah, a 210K+ backlog in unconfirmed transactions and soaring fees: https://blockchain.info/unconfirmed-transactions https://blockchain.info/unconfirmed-transactions
- thisisit 9y agoI called 16k couple of hours ago: https://news.ycombinator.com/item?id=15869803 https://news.ycombinator.com/item?id=15869803 If some listened they might have made some profit. /s That said, another fluff piece upvoted. Can we get another section like SHow/Ask HN just for these?
- npgatech 9y agoCalling $16k on a security that is amidst an explosive growth is hardly insightful. “If some listened they might have made some profit” - I think you’re giving yourself too much credit here.
- thisisit 9y agoThanks for the reminder, I forgot to add the sarcasm tag. Added now.
- WillyOnWheels 9y agoMany of the exchanges are down. Consensus time is very high. Would anyone have been to take their profits?
- yodsanklai 9y agoHow can we explain this recent surge? what's the profile of people buying BTC now? would numerous "small actors" be enough to cause this bubble? I've also been wondering what would happen if this crashes. Could it have any impact on the real economy?
- aaavl2821 9y agonot an expert by any means, but from reading the article it looks like people are buying in anticipation of price increases after BTC futures launch on major exchanges (supposed to be 12/10 launch for the first one, tho i think thats coming into doubt now)
- nmeofthestate 9y agoI am desperate to fuel this bubble, but finding it a complete bugger to buy bitcoins.
- tostitos1979 9y agoI am very genuinely curious how people bought bitcoin before coinbase? There was that vending machine. Or you could mine it. But how did regular folks do it?
- shawabawa3 9y agoI did a wire transfer to bitstamp from my girlfriend's French bank account. Wouldn't work from my british bank account for whatever reason. (This was in 2013. I bought my first bitcoin at $55 a piece, annoyingly I only invested ~$100 at the time :/)
- dingaling 9y agoI also used Bitstamp and had to shop-around UK banks until I found one that would authorise the transaction. Most declined once they identified the recipient as dealing in cryptocurrency. Halifax were happy to do so though, also 2013.
- RealityVoid 9y agoLocal bitcoins. I met up, btc were held in escrow, paid in cash, got the escrowed bitcoins released to me.
- tostitos1979 9y agoCurious how you decided to trust a particular escrow service. With Coinbase, the leap of faith one could possibly make was that they were associated with YC (gave them credibility in my books at least).
- RealityVoid 9y ago
- Slartie 9y agoFrom what I've seen I came to this conclusion (further input from HN readers gladly accepted, maybe I got something wrong): It seems that yesterday at around 01:00 UTC, someone with a huge amount of cash on GDAX started a buying bot, which bought BTC in small increments every second or so at market price. Judging by the GDAX volume in comparison to normal volume and an estimated average price, I'd say this person bought about 50-60k BTC for around 800-900 million dollars. Shortly after this buying activity started, the Bitcoin network mempool got clogged by transactions - and it doesn't seem like spam, but more like legitimate transactions with fees attached that would normally go through in an acceptable timeframe. I'm pretty sure this is people realizing that GDAX is the place to sell right now, thus they're trying to move BTC from other exchanges and from cold storage onto that exchange. However, most of them likely didn't get there in time, but the buying bot apparently had no upper price limit and just continued buying its way through the order books, until finally arriving at 19,6k$, when someone apparently hit CTRL-C. During that time, the price on GDAX and all other exchanges decoupled, as arbers probably gave up on arbing (guess they ran out of coins or cash respectively and weren't able to interchange the funds between the exchanges, just like all the sellers). Even the Koreans, which usually are paying a large premium with regard to Western exchanges, almost lost all of their premium over GDAX for a few minutes. I have only one idea who could have caused this: a single person or entity trying to load up on huge amounts of coins, planning to use them with corresponding orders on the upcoming futures markets. They probably got surprised with the CBOE announcement of starting futures even a week earlier than CME and thus had to speed up the buying plans a little, regardless of the premium they'd have to pay this way. The tricky question that remains however is: are they going to use these coins as a hedge, or are they planning on dumping them to do the inverse of what they just did (artifically lowering the market price, so their shorts on the futures markets earn them way more than they lose on the BTC exchanges)? And of course: is this over now? GDAX went down and up again, and the mysterious and frequent buys at ridiculously high prices have returned as well, although the blockchain had practically no time to re-stock GDAX with coins. This person definitely doesn't care at all about the price and just wants to load up on any coins it can get really, really quick.
- desuvader 9y agoTime to short some futures ᕕ( ᐛ )ᕗ /s In all seriousness, I wouldn't be surprised if a group of high-net-worth individuals go short (exactly how you described) in order to shake out all the inexperienced traders/investors in the space for a nice profit. Also, could it not just be CME preparing the underlyings?
- yongjik 9y agoI frequent several Korean websites (that used to have nothing to do with cryptocurrencies) and the number of bitcoin-related posts in the past few days has reached an insane level. Half of them are saying it's a bubble. The other half say they're getting rich. Nobody's talking about blockchains, fiat currency, built-in deflation, monetary policies of nations, or any of that stuff, because nobody's interested in these topics. To these people, it's a get-rich-quick scheme, pure and simple. The only difference in viewpoint is whether they're in the scheme or not. I don't know how far it will go, but a new economic order it is not. The players themselves (who are pumping up the price) don't give a damn about economic orders.
- niyikiza 9y agoI live in Korea (and run a small cryptocurrency related service) and I couldn't agree with you more. Koreans are looking at BTC as a pure get rich quick scheme. Even those chasing out altcoins, they are not hooked by, you know, PoS or more privacy or any other features that the coins evangelists are talking about. They are just looking for "the next Bitcoin" haha. Even when you try to go to these "Blockchain meetups": most of them are discussing nothing but the latest price of bitcoin.
- samsonradu 9y agoLets all just thank the big central banks for pumping so much liquidity into the markets that people and companies are mostly clueless on what to do with the money. And now everything seems like a good investment, you see average companies maling little to no profit acquired for billions, the housing market growing year-on-year, the US stock market up ~20% YTD. What’s the surprise?
- prostoalex 9y agoRemains to be seen how much of the trading activity is new money vs people buying with other crypto, people buying with tethers they cannot redeem for USD or just plain old self-trading where one can move cash from wallet A into wallet B at arbitrary prices. Bitcoin exchanges are not exactly offering a high degree of transparency on their cash inflows.
- singularity2001 9y agopeople thinking "Oh I just get out when the price starts falling" are utterly mistaken: Transactions now taking several hours might then take several days. Already getting Error 520 on Kraken
- VVayneTracker 9y agoI wonder to whatr extent BTC could be seen as an investment in a corporatist future where nationstates are less influential than the fictitious entities they have spawned.
- singularity2001 9y agoKraken Withdraw Audit Feature Disabled This feature is not currently available. That is the equivalent of Banks closing because of market panic.