14 ms·

What's Happening with Bitcoin Prices

93 points by kristopolous 9y ago

cantrip 9y ago
Anyone speculating about what's going on with Bitcoin without at least mentioning Tether is out of the loop.
- robbyt 9y ago
  I'm out of the loop. What's the deal with tether?
  - eximius 9y ago
    Issue Tether (it is issued, not mined), trade Tether for Bitcoin, BTC price in Tethers increases, due to stated and believed peg of Tether to USD, BTC raises in USD price due to arbitrage executioners. More details: https://seekingalpha.com/article/4129543-bitcoin-one-way-go-true#/comment-76992585 https://seekingalpha.com/article/4129543-bitcoin-one-way-go-...
    - runeks 9y ago
      Which BTC/tether market(s) is this happening on? I know plenty of BTC/USD markets, but I’m not familiar with which BTC/tether markets exist.
      - eximius 9y ago
        Bitfinex which is cooincidentally owned by the same people as Tether.
    - samsonradu 9y ago
      Failing to understand how you could peg Tether to the USD and have people believe you. I was under the impression that pegging to a currency is something only a very big player, with close to unlimited resources can achieve, see People's Bank of China, Swiss Bank etc. Among others, you have to defend the currency against speculators and that requires a lot of capital. Even the Bank of England failed to maintain the peg to the German Deutschmark some years ago. Can someone with more knowledge in the FX market area explain this better?
      - StavrosK 9y ago
        You can peg tether to the usd simply by offering to always exchange one tether for one usd and vice versa, no?
        tehlike 9y ago
        The problem is, sonfar they issued north of 800m with no proof of reserves, and no professional audit to support their claims.
        samsonradu 9y ago
        That s the thing I don’t get, how do they “issue” tether? Because if one says they peg it to the dollar then it must follow the dollar’s inflation. Otherwise somebody is at a loss because there s more tether value than usd or viceversa, even if they were fully transparent and fair. Edit Unless of course tether is not a store of value in any way and just a fancy name for a dollar.
        tehlike 9y ago
        The way it works is, i go to exchange a, and tell them hey i have this cryptocurrency and i have enough cash to back it up. People can withdraw money from me using these. If you do not verify my claims, you think this is a great idea, because now you can transact with usd(t). Formally these exchanges only used cross-coin exchanges. Now this is not a problem as long as you have _enough_ money to support withdrawals on an ongoing basis. Nobody knows you dont have enough cash to support all issued tokens, because seemingly, everything works nicely. With the recent hype, money keeps flowing. Until a mass withdrawal happens.
        samsonradu 9y ago
        But why do I want tether in the first place? Why bother switching back and forth at all? I don’t see why would I want to hold tether. Can I buy a can of coke with it directly? What if the coke seller is a bit skeptical of tether and asks for 1.2 tether instead of one usd, just to play safe. Isn t this pressure applied to the exchange rate?
    - Kiro 9y ago
      How is it issued exactly? Practically and technically speaking. What is the process?
      - eximius 9y ago
        I haven't read the whitepaper. But Ripple and Dash are similarly centralized I believe.
  - econner 9y ago
    Tether is supposed to be backed 1:1 by US dollars and function as a non-volatile way to move money across exchanges. It's market cap is ~$815M. Lots of people believe that Bitfinex, the creator of Tether, is not actually holding $815M to back it. Instead they believe Bitfinex is creating Tether out of thin air and could be using it to inflate the price of Bitcoin.
    - simooooo 9y ago
      How would them issuing tether out of thin air inflate the price of bitcoin?
      - fmela 9y ago
        By trading tether issued out of thin air for BTC.
        deleted 9y ago
        [deleted]
        RexetBlell 9y ago
        Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?
        cantrip 9y ago
        Tether are, ostensibly, backed by $1 in a bank somewhere. Having a dollar token is very useful, since you can move in and out of crypto trading positions into a stable store of value, good old USD. Converting to real money takes a long time so you can't react to the market, and is also taxable and often has other fees on top.
        michaelchisari 9y ago
        > backed by $1 in a bank somewhere. Are we sure about this?
- ComputerGuru 9y ago
  I would agree except the article wasn’t about any specific cause or even this particular wave; just a general explanation of the bitcoin phenomenon that may even be taken as a general explanation for investment any bubble in general.
  - cantrip 9y ago
    I disagree. There is a section of the article titled "Where is all this cash coming from?" which claims (via a Reddit thread) that it's individuals buying on credit.
    - kruhft 9y ago
      Or older people getting into the crypto game because they're hearing their stock advisers tooting their horns. Some of them have boatloads of assets and will trade a small percentage just to get in the crypto game. No credit required. My friend I helped buy in isn't disappointed. He doesn't fully get what cryptos are yet (although I explain them every time I talk to him), but he sure likes the returns...so far. Edit: filly -> fully
      - michaelchisari 9y ago
        He doesn't filly get what cryptos are yet That's when you know we're at a dangerous moment in time.
    - kristopolous 9y ago
      It was because debt-based speculative investing is one of the easiest and most common ways these types of risk are spread. There's lots of other sources of investment, but the debt-based ones are most concerning with respect to the analysis. The other dangers are municipal general fund and endowment based investments. Local municipalities in countries like Greece and Italy got caught up in the 2008 real estate crash and then all of a sudden, things like street sweeping and garbage pickup stopped. Speculative bubbles cast wide nets.
- indubitable 9y ago
  The entire market cap of Tether is a small fraction of the daily volume of BTC. If 100% of Tether was traded for BTC, it would just be a blip on a single day's pricing.
  - meritt 9y ago
    I think you're significantly overestimating the total liquidity available at a given point in time.
    - indubitable 9y ago
      https://blockchain.info/charts/estimated-transaction-volume-usd https://blockchain.info/charts/estimated-transaction-volume-... Daily transactional BTC value has been in the billions for months, even before the recent price explosion. Yesterday's was a [very] record breaking value pushing $6 billion. The total market cap of Tether is less than $0.9 billion. That would've been about a single day's volume back in July. And to clarify, we're talking about if 100% of every single Tether is being used to purchase BTC with these numbers. That assumption is not correct meaning the actual impact is likely substantially lower.
      - michaelchisari 9y ago
        Coinmarketcap has Tether's 24h trading volume at $1.9 billion (over double the market cap). I find that concerning. They list the 24h volume for Bitcoin at $24 billion. At 9% or 10% of the 24h volume, Tether could very possibly be a major factor in the bitcoin price spike.
      - meritt 9y ago
        > Daily transactional BTC value has been in the billions for months That's absolutely true but what you cannot tell is how much actual liquidity exists. I was playing around with algorithmic trading this summer and would routinely have days where my personal transactional volume would exceed $500k and I was only playing with $2.5k. Just a lot of very short duration (sometimes holding for mere seconds) trades and I always took the maker side to avoid paying any fees.
- wc- 9y ago
  I'll probably be downvoted into oblivion for hating on the latest hot internet rumor, but here is why I believe the tether rumors should be ignored: The tether situation has been twisted into a PR campaign against bitcoin by the bcash supporters (formally the segwit2x) supports. When the segwit2x fork was cancelled, /r/btc (a segwit2x and bcash community) and a number of popular twitter accounts suddenly started picking up the bitfinex'd anti-tether campaign. This includes a large group of what are most likely twitter bot accounts (have not tweeted in a long time, all joined around the same time, etc). Tether/Bitfinex is working on an audit but this takes considerable time. The auditing group will not put their stamp of public approval on an audit until it has gone through the most stringent reviews. Tether has been receiving significant "institutional" money over the past few months specifically trying to exploit the bitfinex USD lending market. Given how Wells Fargo and other large banks have been treating any company related to the bitcoin space, it is not in Tether's best interests to publicize which banks they are using. Hopefully someday this situation will improve, but for now if you run a company in the cryptocurrency space your fiat banking is tenuous at best, therefore you do not advertise your industry to your banking partners. Bitfinex is making $5m or more per day on a slow day, and has been for quite a while. This revenue stream can be used to support Tether if needed. Tether's USD pair on Kraken has remained close to $1. This would be the first market to go crazy if there were an actual issue with Tethers as the tether holders would rush to redeem them at Kraken instead of via Tether themselves. The "printing" of Tethers is now largely being sent to Bittrex and Poloniex in order to support their customers' tether balances. Tethers are a public blockchain, do the research and follow them to their actual destination. Even if every single tether were being used to borrow margin funding on bitfinex and buy bitcoin, it would hardly make a dent in the daily BTC volume at Bitfinex. Tether "followers" make a big deal about a 15m or 30m tether generation event, but even with this being used for 3x margin on bitfinex it would hardly make a dent on the > 2.5B usd trading volume. There are many more arguments supporting or attacking tether. I will not be responding to any comments because I have a feeling this will turn into a mess but I just wanted to throw some more information / opinions into the mix. The whole cryptocurrency world has been completely fueled, almost lives off of, FUD and rumors that would push a price up or down. This feeds right into that. BUT: At the end of the day you should trust no exchange, the entire point of cryptocurrency is that you control your own holdings.
deleted 9y ago
[deleted]
sAbakumoff 9y ago
https://99bitcoins.com/obituary-stats/ https://99bitcoins.com/obituary-stats/
- kristopolous 9y ago
  Thanks, this is about general markets however. I've been trading BTC since 2011. Doesn't matter if it's tulip bulbs, baseball cards, bitcoins, houses, or dotcom companies, markets operate on similar principles and talking about the market dynamics doesn't say anything about the asset in question. Cryptocurrency is a viable means of exchange and the technology is great and all but that doesn't change the rules or mechanics of the marketplace. It isn't magic.
  - sAbakumoff 9y ago
    Personally I inclined to trust Ronnie Moas who likes saying this about BTC: >>if you try to trade this you WILL get smoked; charts are bullshit and do NOT apply here; stop jumping on and off the train, you look foolish But at the same time investing only the funds that I can afford to lose.
    - deleted 9y ago
      [deleted]
  - kough 9y ago
    right, but viable means of exchange doesn't mean there's any particular reason to buy and hold.
    - dfsegoat 9y ago
      ...If it is a more stable asset class than what you currently own, then why wouldn't you buy and hold? Isn't that the point of diversification? Legitimate, honest questions from someone without any real academic background in econ.
      - 9y ago
smaili 9y ago
> Ever wonder why Coinbase takes about a week to “process” the sell? I've actually always wondered this. What were to happen if the moment I click Sell, the price is $10K but when it's "processed", the price at that time is $1...would the USD I receive be based at time of click or time of processing?
- pat2man 9y ago
  You get close to the price when you click, not exactly but pretty close.
- captainmuon 9y ago
  There is not one single price, but many offers at different prices and volumes. The exchange doesn't sell or buy bitcoins, they just connect sellers and buyers (and handle the transactions). The price you see is the best current offer for the amount you are selling, I think. Usually, it changes a little, but yeah you are not guarenteed that price. If, at the time your order comes in, nobody wants to sell for $10K, but only $1, that is what you get. This is why most (all?) exchanges have the option of buying/selling at market price ("best" price, I could imagine there is some protection included though so the order doesn't go through if there is more than X% price difference), or with a limit (where you say "sell X BTC, but I want at least $Y per BTC).
  - kristopolous 9y ago
    They do at least a 0.5% spread + 1.5% fee. So the price listed if you are buying, it's at least 0.5% higher and if you're selling it's at least 0.5% lower. Which means if you're trying to "flip" as in buy low and sell high, you need to see at least a 4.1% or so increase to just break even. Sometimes their spread will be over 1% in both directions. Btc usually operates in practice on a 0.5% spread or less. There's a reason why the only name we know from the gold rush is Levi Strauss. The real money is in the facilitators of the rush, not in the prospecting.
thisisit 9y ago
In case someone is wondering about Tether, there has not been new coins for about a week now: https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3AgWkj9FMo5LsPTW1zBTwXL https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC...
- jaaames 9y ago
  Thanks, saved me checking Bitfinexed for new news.
- gt_ 9y ago
  Interesting. What happens if, say, Bitfinex runs out?
  - thisisit 9y ago
    Runs out of what? If you mean Tether. They can keep doing "grant token" as long as they want. I will be publishing a blog on the market schemes of different token soon as there seem to be a lot of hype.
    - gt_ 9y ago
      The difference between “new coin” and “grant token” is eluding me here.
      - thisisit 9y ago
        "Grant token" is the command for generating new token/coin.
        gt_ 9y ago
        OK. Maybe i am assuming there have been no new Tether tokens because the “granter” decided not to grant anymore, but it has actually been a market response? I am wondering... if they can grant new tokens, why havent they? Lack of demand?
indubitable 9y ago
I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm reversing causality here. In other words that the media coverage increased following the increases in bitcoin, rather than the opposite as I'm suggesting. But Google Trends along with the price graph seem to support my suggested causality: https://trends.google.com/trends/explore?q=bitcoin https://trends.google.com/trends/explore?q=bitcoin https://www.coindesk.com/price/ https://www.coindesk.com/price/ This just seems to be a huge influx of dumb money. If this is true, it's going to lead to some interesting near future volatility. These sort of investors are going to be more inclined to jump ship at what would normally be the tail end of swings. They will see it as 'the crash', race to get out, and create a self fulfilling prophecy. Perhaps offering a great time for investment for anybody who can accurately determine when the double dip decline is bottoming out before a return to normalcy.
- 59nadir 9y ago
  Pretty much all of the money in Bitcoin was dumb from the get-go. These weren't economists figuring out that something was under-valued or the system could be gamed. It was people gambling back then and that's what's continuing to happen. Like you, I noticed an increasing amount of fairly oblivious people talking about Bitcoin a while ago in our office and that's the most certain marker of an impending crash, but in terms of there being smart money outside of huge investors in the earlier days of Bitcoin I disagree. Developers that like to gamble are not smart investors.
  - snappyTertle 9y ago
    What would you value a technology that aims to separate money and state? Does it have no value?
    - 59nadir 9y ago
victor106 9y ago
“Ever wonder why Coinbase takes about a week to “process” the sell? Or why when you buy on other exchanges you’re debited instantly but when you sell it takes a few days to be credited?” “It’s mostly likely because these institutions don’t have the liquidity to actually pay you. The important thing to realize is the exchanges aren’t selling the Bitcoins on the open market nor are they transferring anything between wallets when you sell.‘ “ Anyone here know if this is true? The article is based on the above assumption. If it is Ian selling my bitcoin NOW. THIS IS THE BIGGEST RISK I HAVE HEARD IN THE CRYPTO WORLD
- spelunker 9y ago
  I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't understand how these exchanges are functioning. I have no idea why it takes a few days to process, however. I don't think the fact that it can take a little while to "process" sells is because it's a ponzi scheme though, that seems like a bit of a jump. I mean plain old ACH transfers take a few days, does that mean that ACH is a ponzi scheme?
  - kristopolous 9y ago
    I'm not claiming any of them are. On the contrary, I'm saying there's a risk that some of them could be partially operating like this and if they were, you wouldn't be able to tell. This is high risk. No kidding.
    - spelunker 9y ago
      I guess. They could also be inventing the buy side entirely and just taking people's money. They also could be Nigerian princes who just really need my SSN to access their family inheritance. I still don't think selling "taking a few days" necessarily is evidence that there is a ponzi scheme going on, though. When I sell equities in my Schwab account, it takes two days to access the cash. I'm pretty certain Schwab isn't running a ponzi scheme.
thisisit 9y ago
As much as I think there might be a crash, so many things are wrong here: > They don’t do technical analysis or are savvy enough to place limit orders. I agree on limit orders but what is the fascination with TA. Not a day goes about where someone in cryptocurrency uses some kind of chart mumbo jumbo to prove a point. > Ever wonder why Coinbase takes about a week to “process” the sell? Simple answer - Settlements. Banks are not very fast. If someone was to refund you now, you don't get the money in a day. They will always say, "money will be credited back to you in 2-4 days". There are so many additional reasons for this: 1. Security. The amount of non-technical people going on the exchange is huge. So they don't know if the sell was the right one or not. 2. KYC - They need to ensure the buyers are following AML laws to ensure they don't get sued later for helping drug dealers. 3. Volume - The sheer volume of transactions which need to processed, specially with KYC confirmations. 4. Settlement - They can only pay someone if the buying party has sent the money to them. 5. Banks - Banks always know who is crediting the money. They might have put extra checks for money coming from Coinbase, not to slow Coinbase down but again to save their asses. etc. > Closing shop for a bit The logic on this is so convoluted. If they keep the public price API is fast because it doesn't need to handle additional requests. It is a simple fetch. Additionally, if they keep the price API open it is just providing ammunition to detractors. Have you ever been in a stock market crash? Try that, your broker will freeze up and stop responding. You will have a public price API to know what just hit you.
- kristopolous 9y ago
  Sure, there's honest and upstanding ways of explaining all of this. But there's also billions of dollars being exchanged on opaque markets every day so there's also the usual suspects that brings with it. In valley units, that's a unicorn startup every hour. Go check, https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/ $24.1 billion in the past 24 hours
  - thisisit 9y ago
    And....your solution is to write an article claiming this is fraud? So, if I use your logic - there is no disclaimer/disclosure on your holdings ie there is opaque-ness. Hence, you have written this article to try and spread FUD to cause market panic. There is no room for honest and upstanding way to explain your actions.
exclusiv 9y ago
Bitcoin succeeding is a very bad thing for the banking cartel. Is it possible that some big powers are ramping it up so they can crash it violently?
- tehlike 9y ago
  Every crash is followed by another rise. The idea is out. Bitcoin may die, but another will thrive.
  - exclusiv 9y ago
    Perhaps, but an epic crash of the most well-known brand, a death spiral in investor confidence and the ensuing media reports would kill not only Bitcoin but potentially any other cryptocurrencies. Legislation could follow to block or at least pigeonhole any other crypocurrencies into a really niche market.
patsmith 9y ago
Take your best guess when Bitcoin will fall of the cliff: https://twitter.com/BitcoinPlunge https://twitter.com/BitcoinPlunge

93 points by kristopolous 9y ago

cantrip 9y ago

Anyone speculating about what's going on with Bitcoin without at least mentioning Tether is out of the loop.

robbyt 9y ago
I'm out of the loop. What's the deal with tether?
- eximius 9y ago
  Issue Tether (it is issued, not mined), trade Tether for Bitcoin, BTC price in Tethers increases, due to stated and believed peg of Tether to USD, BTC raises in USD price due to arbitrage executioners. More details: https://seekingalpha.com/article/4129543-bitcoin-one-way-go-true#/comment-76992585 https://seekingalpha.com/article/4129543-bitcoin-one-way-go-...
  - runeks 9y ago
    Which BTC/tether market(s) is this happening on? I know plenty of BTC/USD markets, but I’m not familiar with which BTC/tether markets exist.
    - eximius 9y ago
      Bitfinex which is cooincidentally owned by the same people as Tether.
  - samsonradu 9y ago
    Failing to understand how you could peg Tether to the USD and have people believe you. I was under the impression that pegging to a currency is something only a very big player, with close to unlimited resources can achieve, see People's Bank of China, Swiss Bank etc. Among others, you have to defend the currency against speculators and that requires a lot of capital. Even the Bank of England failed to maintain the peg to the German Deutschmark some years ago. Can someone with more knowledge in the FX market area explain this better?
    - StavrosK 9y ago
      You can peg tether to the usd simply by offering to always exchange one tether for one usd and vice versa, no?
      - tehlike 9y ago
        The problem is, sonfar they issued north of 800m with no proof of reserves, and no professional audit to support their claims.
        samsonradu 9y ago
        That s the thing I don’t get, how do they “issue” tether? Because if one says they peg it to the dollar then it must follow the dollar’s inflation. Otherwise somebody is at a loss because there s more tether value than usd or viceversa, even if they were fully transparent and fair. Edit Unless of course tether is not a store of value in any way and just a fancy name for a dollar.
        tehlike 9y ago
        The way it works is, i go to exchange a, and tell them hey i have this cryptocurrency and i have enough cash to back it up. People can withdraw money from me using these. If you do not verify my claims, you think this is a great idea, because now you can transact with usd(t). Formally these exchanges only used cross-coin exchanges. Now this is not a problem as long as you have _enough_ money to support withdrawals on an ongoing basis. Nobody knows you dont have enough cash to support all issued tokens, because seemingly, everything works nicely. With the recent hype, money keeps flowing. Until a mass withdrawal happens.
        samsonradu 9y ago
        But why do I want tether in the first place? Why bother switching back and forth at all? I don’t see why would I want to hold tether. Can I buy a can of coke with it directly? What if the coke seller is a bit skeptical of tether and asks for 1.2 tether instead of one usd, just to play safe. Isn t this pressure applied to the exchange rate?
  - Kiro 9y ago
    How is it issued exactly? Practically and technically speaking. What is the process?
    - eximius 9y ago
      I haven't read the whitepaper. But Ripple and Dash are similarly centralized I believe.
- econner 9y ago
  Tether is supposed to be backed 1:1 by US dollars and function as a non-volatile way to move money across exchanges. It's market cap is ~$815M. Lots of people believe that Bitfinex, the creator of Tether, is not actually holding $815M to back it. Instead they believe Bitfinex is creating Tether out of thin air and could be using it to inflate the price of Bitcoin.
  - simooooo 9y ago
    How would them issuing tether out of thin air inflate the price of bitcoin?
    - fmela 9y ago
      By trading tether issued out of thin air for BTC.
      - deleted 9y ago
        [deleted]
      - RexetBlell 9y ago
        Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?
        cantrip 9y ago
        Tether are, ostensibly, backed by $1 in a bank somewhere. Having a dollar token is very useful, since you can move in and out of crypto trading positions into a stable store of value, good old USD. Converting to real money takes a long time so you can't react to the market, and is also taxable and often has other fees on top.
        michaelchisari 9y ago
        > backed by $1 in a bank somewhere. Are we sure about this?
ComputerGuru 9y ago
I would agree except the article wasn’t about any specific cause or even this particular wave; just a general explanation of the bitcoin phenomenon that may even be taken as a general explanation for investment any bubble in general.
- cantrip 9y ago
  I disagree. There is a section of the article titled "Where is all this cash coming from?" which claims (via a Reddit thread) that it's individuals buying on credit.
  - kruhft 9y ago
    Or older people getting into the crypto game because they're hearing their stock advisers tooting their horns. Some of them have boatloads of assets and will trade a small percentage just to get in the crypto game. No credit required. My friend I helped buy in isn't disappointed. He doesn't fully get what cryptos are yet (although I explain them every time I talk to him), but he sure likes the returns...so far. Edit: filly -> fully
    - michaelchisari 9y ago
      He doesn't filly get what cryptos are yet That's when you know we're at a dangerous moment in time.
  - kristopolous 9y ago
    It was because debt-based speculative investing is one of the easiest and most common ways these types of risk are spread. There's lots of other sources of investment, but the debt-based ones are most concerning with respect to the analysis. The other dangers are municipal general fund and endowment based investments. Local municipalities in countries like Greece and Italy got caught up in the 2008 real estate crash and then all of a sudden, things like street sweeping and garbage pickup stopped. Speculative bubbles cast wide nets.
indubitable 9y ago
The entire market cap of Tether is a small fraction of the daily volume of BTC. If 100% of Tether was traded for BTC, it would just be a blip on a single day's pricing.
- meritt 9y ago
  I think you're significantly overestimating the total liquidity available at a given point in time.
  - indubitable 9y ago
    https://blockchain.info/charts/estimated-transaction-volume-usd https://blockchain.info/charts/estimated-transaction-volume-... Daily transactional BTC value has been in the billions for months, even before the recent price explosion. Yesterday's was a [very] record breaking value pushing $6 billion. The total market cap of Tether is less than $0.9 billion. That would've been about a single day's volume back in July. And to clarify, we're talking about if 100% of every single Tether is being used to purchase BTC with these numbers. That assumption is not correct meaning the actual impact is likely substantially lower.
    - michaelchisari 9y ago
      Coinmarketcap has Tether's 24h trading volume at $1.9 billion (over double the market cap). I find that concerning. They list the 24h volume for Bitcoin at $24 billion. At 9% or 10% of the 24h volume, Tether could very possibly be a major factor in the bitcoin price spike.
    - meritt 9y ago
      > Daily transactional BTC value has been in the billions for months That's absolutely true but what you cannot tell is how much actual liquidity exists. I was playing around with algorithmic trading this summer and would routinely have days where my personal transactional volume would exceed $500k and I was only playing with $2.5k. Just a lot of very short duration (sometimes holding for mere seconds) trades and I always took the maker side to avoid paying any fees.
wc- 9y ago
I'll probably be downvoted into oblivion for hating on the latest hot internet rumor, but here is why I believe the tether rumors should be ignored: The tether situation has been twisted into a PR campaign against bitcoin by the bcash supporters (formally the segwit2x) supports. When the segwit2x fork was cancelled, /r/btc (a segwit2x and bcash community) and a number of popular twitter accounts suddenly started picking up the bitfinex'd anti-tether campaign. This includes a large group of what are most likely twitter bot accounts (have not tweeted in a long time, all joined around the same time, etc). Tether/Bitfinex is working on an audit but this takes considerable time. The auditing group will not put their stamp of public approval on an audit until it has gone through the most stringent reviews. Tether has been receiving significant "institutional" money over the past few months specifically trying to exploit the bitfinex USD lending market. Given how Wells Fargo and other large banks have been treating any company related to the bitcoin space, it is not in Tether's best interests to publicize which banks they are using. Hopefully someday this situation will improve, but for now if you run a company in the cryptocurrency space your fiat banking is tenuous at best, therefore you do not advertise your industry to your banking partners. Bitfinex is making $5m or more per day on a slow day, and has been for quite a while. This revenue stream can be used to support Tether if needed. Tether's USD pair on Kraken has remained close to $1. This would be the first market to go crazy if there were an actual issue with Tethers as the tether holders would rush to redeem them at Kraken instead of via Tether themselves. The "printing" of Tethers is now largely being sent to Bittrex and Poloniex in order to support their customers' tether balances. Tethers are a public blockchain, do the research and follow them to their actual destination. Even if every single tether were being used to borrow margin funding on bitfinex and buy bitcoin, it would hardly make a dent in the daily BTC volume at Bitfinex. Tether "followers" make a big deal about a 15m or 30m tether generation event, but even with this being used for 3x margin on bitfinex it would hardly make a dent on the > 2.5B usd trading volume. There are many more arguments supporting or attacking tether. I will not be responding to any comments because I have a feeling this will turn into a mess but I just wanted to throw some more information / opinions into the mix. The whole cryptocurrency world has been completely fueled, almost lives off of, FUD and rumors that would push a price up or down. This feeds right into that. BUT: At the end of the day you should trust no exchange, the entire point of cryptocurrency is that you control your own holdings.

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sAbakumoff 9y ago

https://99bitcoins.com/obituary-stats/ https://99bitcoins.com/obituary-stats/

kristopolous 9y ago
Thanks, this is about general markets however. I've been trading BTC since 2011. Doesn't matter if it's tulip bulbs, baseball cards, bitcoins, houses, or dotcom companies, markets operate on similar principles and talking about the market dynamics doesn't say anything about the asset in question. Cryptocurrency is a viable means of exchange and the technology is great and all but that doesn't change the rules or mechanics of the marketplace. It isn't magic.
- sAbakumoff 9y ago
  Personally I inclined to trust Ronnie Moas who likes saying this about BTC: >>if you try to trade this you WILL get smoked; charts are bullshit and do NOT apply here; stop jumping on and off the train, you look foolish But at the same time investing only the funds that I can afford to lose.
  - deleted 9y ago
    [deleted]
- kough 9y ago
  right, but viable means of exchange doesn't mean there's any particular reason to buy and hold.
  - dfsegoat 9y ago
    ...If it is a more stable asset class than what you currently own, then why wouldn't you buy and hold? Isn't that the point of diversification? Legitimate, honest questions from someone without any real academic background in econ.
    - 9y ago

smaili 9y ago

> Ever wonder why Coinbase takes about a week to “process” the sell? I've actually always wondered this. What were to happen if the moment I click Sell, the price is $10K but when it's "processed", the price at that time is $1...would the USD I receive be based at time of click or time of processing?

pat2man 9y ago
You get close to the price when you click, not exactly but pretty close.
captainmuon 9y ago
There is not one single price, but many offers at different prices and volumes. The exchange doesn't sell or buy bitcoins, they just connect sellers and buyers (and handle the transactions). The price you see is the best current offer for the amount you are selling, I think. Usually, it changes a little, but yeah you are not guarenteed that price. If, at the time your order comes in, nobody wants to sell for $10K, but only $1, that is what you get. This is why most (all?) exchanges have the option of buying/selling at market price ("best" price, I could imagine there is some protection included though so the order doesn't go through if there is more than X% price difference), or with a limit (where you say "sell X BTC, but I want at least $Y per BTC).
- kristopolous 9y ago
  They do at least a 0.5% spread + 1.5% fee. So the price listed if you are buying, it's at least 0.5% higher and if you're selling it's at least 0.5% lower. Which means if you're trying to "flip" as in buy low and sell high, you need to see at least a 4.1% or so increase to just break even. Sometimes their spread will be over 1% in both directions. Btc usually operates in practice on a 0.5% spread or less. There's a reason why the only name we know from the gold rush is Levi Strauss. The real money is in the facilitators of the rush, not in the prospecting.

thisisit 9y ago

In case someone is wondering about Tether, there has not been new coins for about a week now: https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3AgWkj9FMo5LsPTW1zBTwXL https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC...

jaaames 9y ago
Thanks, saved me checking Bitfinexed for new news.
gt_ 9y ago
Interesting. What happens if, say, Bitfinex runs out?
- thisisit 9y ago
  Runs out of what? If you mean Tether. They can keep doing "grant token" as long as they want. I will be publishing a blog on the market schemes of different token soon as there seem to be a lot of hype.
  - gt_ 9y ago
    The difference between “new coin” and “grant token” is eluding me here.
    - thisisit 9y ago
      "Grant token" is the command for generating new token/coin.
      - gt_ 9y ago
        OK. Maybe i am assuming there have been no new Tether tokens because the “granter” decided not to grant anymore, but it has actually been a market response? I am wondering... if they can grant new tokens, why havent they? Lack of demand?

indubitable 9y ago

I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm reversing causality here. In other words that the media coverage increased following the increases in bitcoin, rather than the opposite as I'm suggesting. But Google Trends along with the price graph seem to support my suggested causality: https://trends.google.com/trends/explore?q=bitcoin https://trends.google.com/trends/explore?q=bitcoin https://www.coindesk.com/price/ https://www.coindesk.com/price/ This just seems to be a huge influx of dumb money. If this is true, it's going to lead to some interesting near future volatility. These sort of investors are going to be more inclined to jump ship at what would normally be the tail end of swings. They will see it as 'the crash', race to get out, and create a self fulfilling prophecy. Perhaps offering a great time for investment for anybody who can accurately determine when the double dip decline is bottoming out before a return to normalcy.

59nadir 9y ago
Pretty much all of the money in Bitcoin was dumb from the get-go. These weren't economists figuring out that something was under-valued or the system could be gamed. It was people gambling back then and that's what's continuing to happen. Like you, I noticed an increasing amount of fairly oblivious people talking about Bitcoin a while ago in our office and that's the most certain marker of an impending crash, but in terms of there being smart money outside of huge investors in the earlier days of Bitcoin I disagree. Developers that like to gamble are not smart investors.
- snappyTertle 9y ago
  What would you value a technology that aims to separate money and state? Does it have no value?
  - 59nadir 9y ago

victor106 9y ago

“Ever wonder why Coinbase takes about a week to “process” the sell? Or why when you buy on other exchanges you’re debited instantly but when you sell it takes a few days to be credited?” “It’s mostly likely because these institutions don’t have the liquidity to actually pay you. The important thing to realize is the exchanges aren’t selling the Bitcoins on the open market nor are they transferring anything between wallets when you sell.‘ “ Anyone here know if this is true? The article is based on the above assumption. If it is Ian selling my bitcoin NOW. THIS IS THE BIGGEST RISK I HAVE HEARD IN THE CRYPTO WORLD

spelunker 9y ago
I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't understand how these exchanges are functioning. I have no idea why it takes a few days to process, however. I don't think the fact that it can take a little while to "process" sells is because it's a ponzi scheme though, that seems like a bit of a jump. I mean plain old ACH transfers take a few days, does that mean that ACH is a ponzi scheme?
- kristopolous 9y ago
  I'm not claiming any of them are. On the contrary, I'm saying there's a risk that some of them could be partially operating like this and if they were, you wouldn't be able to tell. This is high risk. No kidding.
  - spelunker 9y ago
    I guess. They could also be inventing the buy side entirely and just taking people's money. They also could be Nigerian princes who just really need my SSN to access their family inheritance. I still don't think selling "taking a few days" necessarily is evidence that there is a ponzi scheme going on, though. When I sell equities in my Schwab account, it takes two days to access the cash. I'm pretty certain Schwab isn't running a ponzi scheme.

thisisit 9y ago

As much as I think there might be a crash, so many things are wrong here: > They don’t do technical analysis or are savvy enough to place limit orders. I agree on limit orders but what is the fascination with TA. Not a day goes about where someone in cryptocurrency uses some kind of chart mumbo jumbo to prove a point. > Ever wonder why Coinbase takes about a week to “process” the sell? Simple answer - Settlements. Banks are not very fast. If someone was to refund you now, you don't get the money in a day. They will always say, "money will be credited back to you in 2-4 days". There are so many additional reasons for this: 1. Security. The amount of non-technical people going on the exchange is huge. So they don't know if the sell was the right one or not. 2. KYC - They need to ensure the buyers are following AML laws to ensure they don't get sued later for helping drug dealers. 3. Volume - The sheer volume of transactions which need to processed, specially with KYC confirmations. 4. Settlement - They can only pay someone if the buying party has sent the money to them. 5. Banks - Banks always know who is crediting the money. They might have put extra checks for money coming from Coinbase, not to slow Coinbase down but again to save their asses. etc. > Closing shop for a bit The logic on this is so convoluted. If they keep the public price API is fast because it doesn't need to handle additional requests. It is a simple fetch. Additionally, if they keep the price API open it is just providing ammunition to detractors. Have you ever been in a stock market crash? Try that, your broker will freeze up and stop responding. You will have a public price API to know what just hit you.

kristopolous 9y ago
Sure, there's honest and upstanding ways of explaining all of this. But there's also billions of dollars being exchanged on opaque markets every day so there's also the usual suspects that brings with it. In valley units, that's a unicorn startup every hour. Go check, https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/ $24.1 billion in the past 24 hours
- thisisit 9y ago
  And....your solution is to write an article claiming this is fraud? So, if I use your logic - there is no disclaimer/disclosure on your holdings ie there is opaque-ness. Hence, you have written this article to try and spread FUD to cause market panic. There is no room for honest and upstanding way to explain your actions.

exclusiv 9y ago

Bitcoin succeeding is a very bad thing for the banking cartel. Is it possible that some big powers are ramping it up so they can crash it violently?

tehlike 9y ago
Every crash is followed by another rise. The idea is out. Bitcoin may die, but another will thrive.
- exclusiv 9y ago
  Perhaps, but an epic crash of the most well-known brand, a death spiral in investor confidence and the ensuing media reports would kill not only Bitcoin but potentially any other cryptocurrencies. Legislation could follow to block or at least pigeonhole any other crypocurrencies into a really niche market.

patsmith 9y ago

Take your best guess when Bitcoin will fall of the cliff: https://twitter.com/BitcoinPlunge https://twitter.com/BitcoinPlunge