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What you said does not make sense for an exchange. For every seller, there needs to be a buyer who first deposits USD.
by VincentTide 9y ago
What you said does not make sense for an exchange. For every seller, there needs to be a buyer who first deposits USD.
- meric 9y agoThey would get into trouble if they tried to play market maker.
- fiiv 9y agoYa but with BCH, being a hard fork where the asset was created from everything to a certain block of the BTC chain, it effectively created new coin balances out of nothing. Now imagine when people start trying to cash those out to fiat. In this situation, there was no fiat laid out to get it but it is indeed worth fiat in the case of a withdrawal.
- jerdavis 9y agoNo.
- coralreef 9y agoIf people want to cash out their BCH, they need to sell it on the exchange for USD. The USD needs to already exist in the exchange for someone to buy it. The fiat was laid out by the buyer. So there's no fundamental liquidity issue, if everyone wanted to cash out their BCH to fiat it should not be an issue.
- flignats 9y agoNormally, yes. But if you sell it through coinbase and not gdax, cb let's you sell it instantly and acts as a buyer.
- coralreef 9y agoHow do you know they're acting as a buyer and not just creating a sell order on GDAX?
- deleted 9y ago[deleted]
- flignats 9y agoBecause they just bought it from you at that guaranteed price. They could go and sell it on the market for more/less, but the price you sold it to CB for remains the same.
- coralreef 9y agoThat price changes dynamically at some interval, and is discounted against the trading market value, correct?
- flignats 9y agoThey do update that price frequently (minutes, maybe seconds) and there is a premium added to the price. I assume they add this premium so they can then go liquidate it for profit on the exchange as needed.
- coralreef 9y agoThat doesn't sound to you like they're just selling it on gdax?