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A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes
- vthallam 9y agoWell that definitely contributed, but that alone didn't cause the crash. There was irrational price rise in the last few weeks for certain cryptocurrencies(Ripple, Tron) and this is part of the correction. Also, The market as a whole should get away with global averages and depending on one website to track everything. I wrote an article on it if someone is interested - http://coinsocial.io/2018/01/09/its-time-for-cryptocurrency-investors-to-dump-global-average-prices-and-embrace-local-exchange-prices/ http://coinsocial.io/2018/01/09/its-time-for-cryptocurrency-...
- frgtpsswrdlame 9y ago>There was irrational price rise in the last few weeks for certain cryptocurrencies(Ripple, Tron) and this is part of the correction. What makes their increase 'irrational'?
- vthallam 9y agoWhen you are betting on Bitcoin or Ethereum, you are betting on the technology, developer community, ecosystem and the adoption. With Tron, there's hardly a product and Ripple while seems to have some successful pilots, is still far from realizing the dream of replacing the FIAT currency among banks.
- solipsism 9y agoYour biases are showing. There's no reason someone can't place a bet on Ripple's "technology, developer community, ecosystem and the adoption".
- vthallam 9y agoMay be.Really, In the current scenario, you can't like avoid any implicit bias, like even if you don't mean it. That's why in my comment, I didn't explicitly comment on Ripple's product or team. Also, a bet is one thing, but the get rich quick scheme going on in the market with new investors is another. I still hold some Ripple if that breaks any bias, and I think the correction was unavoidable.
- module0000 9y ago>> When you are betting Full stop. You are trading or investing - if the word "betting" passes through your brain, stop now. The public surge of interest in crypto currencies is a redistribution of wealth from retail speculators to professional speculators. You aren't betting on the technology, developer community, ecosystem, or adoption anymore. At this point, you are betting you aren't the last one to the party.
- notyourday 9y agoDo you know what is a bet gone wrong? It is investment.
- joering2 9y agoI think you took his word too literally. When I read it, it simply means you put your hopes into something. I am betting that my new relationship with be futile and bring me happiness. Doesn't mean I went to see bookie about it.
- rdlecler1 9y agoBuffett calls investments bets all the time. Let’s call it what it is.
- PhasmaFelis 9y agoWhen you play the stock market (telling phrase there), are you not making a bet that your stock will increase in value?
- tomkarlo 9y agoNot necessarily, and not in the long term. You can buy stocks with no expectation they will increase in value (or even maintain value) if the dividend yield is high enough. And stocks have value because of this - the assumption in any stock, even one currently without a dividend, is that eventually it will pay out some form of a dividend to its holders. You may buy a stock hoping it will will rise in value, but that rise is predicated on the eventual delivery of cash via dividends or some other mechanism of distribution. Contrast that with say, Gold, where in fact it costs money to hold and there's no expectation it will ever generate any kind of dividend.
- nrhk 9y agoThey were irrational because if you analyzed all the coins in the top 100-200 you'll realize that it was primarily cheaply priced coins that were making the outsized gains and a lot of it can be attributed to market psychology. It feels better to own 200 of something you don't understand than 0.00159. But at the end of the day returns are returns and it makes no difference if you have 200 of a coin or 0.00159.
- frgtpsswrdlame 9y agoIsn't the worth of any crypto-currency down to market psychology though? By that metric any price movement is irrational.
- TheSpiceIsLife 9y agoEconomics is a social science. It could be argued very few things have intrinsic value. It could be argued all markets are down to purely human psychology. Birds, for example, don't really care how much you paid for those 3000 tonnes of wheat, only that there's a hole in one of the train carriages transporting it.
- spraak 9y agoThat's mostly true, but it doesn't completely work. 200 of something with a low market cap with the potential to gain 200-4000% is way better than 0.00159 of something with a large market cap and low likelihood of doubling. E.g. a random altcoin vs bitcoin today
- alistproducer2 9y agoIn Tron's (TRX) case, the project's whitepaper is plagiarized [0] from Filecoin's, and the CEO (Justin Sun) dumped 6 billion tokens [1] after pumping the price by announcing "partnerships" that turned out to be him hiring developers. TRX is the literal definition of a shitcoin, yet the price pumped 10x in less than 10 days. [0]: http://www.trustnodes.com/2018/01/08/trons-whitepaper-copied-plagiarized http://www.trustnodes.com/2018/01/08/trons-whitepaper-copied... [1]: https://www.reddit.com/r/CryptoCurrency/comments/7oky82/justin_sun_of_trx_did_not_cash_out_any_of_the_34/ https://www.reddit.com/r/CryptoCurrency/comments/7oky82/just... (search page for "buttcoinbanker" to find relevant comment)
- pedrocr 9y ago>TRX is the literal definition of a shitcoin, yet the price pumped 10x in less than 10 days. So a "shitcoin" with a 9B$ market cap? We really are living in a brave new world of financial disruption...
- ufo 9y agoYes. This is also why Market Cap is a problematic metric in the cryptocurrency space.
- pedrocr 9y agoWhat's wrong with it? Seems like a perfectly normal metric for coins just like for stocks and bonds.
- snoman 9y agoI'm just guessing that it's because it's not a stock or a bond. I don't ever hear what the market cap is for the yen, or any other currency.
- ateesdalejr 9y agoThat's because they can always print more. There's no cap.
- s73ver_ 9y agoWhat makes their increase rational?
- deleted 9y ago[deleted]
- lallysingh 9y agoTo be fair, I would expect the same if a well-respected regular-stock website changed its data and suddenly shifted its reported values. Now, if the % change is more or less, I guess that indicates how many market participants have their own value estimates of each currency.
- brndnmtthws 9y agoIt's facetious (and bad 'journalism') to claim $100B vanished. It was never there to begin with: market cap isn't something you can cash in on. It's merely the result of price multiplied by supply. If you owned a significant portion of all the coins in the world, and tried to sell them all at once, you wouldn't end up with number_of_coins * price, it would (realistically) be a smaller number given the market slippage.
- draw_down 9y agoI think the "vanishing" strongly implies that it was never there.
- everdev 9y agoFrom the title: > $100B in Market Value When the market price of an assets drops, it loses market value.
- brndnmtthws 9y agoWrong. The market value is only what you get for it when you sell it. It's a subtle but very important difference. A good analogy is comparing the advertised price of a used car versus what you actually get for it. You might think it's worth $5k, but there's only 1 person who wants to buy it and they're only willing to pay $4k, so it's actually worth $4k, not $5k. It doesn't matter if someone else sold theirs for $5k.
- solotronics 9y agomaybe a more accurate metric be average sell value over period of time or number of trades?
- Klathmon 9y agoI hear this all the time, but does anyone really think that the market cap is what you can really get for an asset? It's a metric, one as "untrue" as an average or median. It's not a contract, and you won't get that if you change the market, which selling and buying does. I don't think that means we shouldn't use it as a metric to use to get information from for comparisons. And I don't think that it's bad journalism to say that the market cap dropped by $100B when it did, even if that doesn't equate to $100 billion being burned.
- Klathmon 9y agoCoinMarketCap is in a tough position here. I can obviously understand not wanting to list massive outliers in an average, but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. No matter what, it's either going to cause big sudden jumps in either direction, or they can "smear" it across some time, which (in my opinion) would look really bad as it would imply sustained increase or decrease. Giving advance notice should be expected of them, but I honestly don't know if they gave one or not, and I don't really think that many people would have read it if they did.
- agotterer 9y agoI visit CoinMarketCap every single day and I don't recall ever seeing a notice or message about a change to the exchange listing.
- Klathmon 9y agoYeah that's really the only thing I can fault them on here. They really should have given some advanced notice that they would be changing how they calculate the averages. Especially since they have a widely used API that many people use, and I'm assuming some trading bots as well.
- tomkarlo 9y agoThe problem with giving advance notice is the impact would just be felt at the time of the notice (bc smart traders will just determine the adjustment immediately.) I think the suggestion above to make the change immediate, but re-calc the historicals so the % change is still right, is probably not bad.
- mancerayder 9y agoWhich isn't good PR given that all the related press (including non crypto currency specific stuff like Bloomberg). https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-resumes-drop-as-asian-regulation-demand-concerns-linger https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-r...
- kanzure 9y agoMarket cap isn't as interesting as people think: https://blog.sia.tech/want-to-deflate-the-token-bubble-fix-the-market-cap-indicator-d50f7f1e1ec4 https://blog.sia.tech/want-to-deflate-the-token-bubble-fix-t...
- bitcoinusername 9y agoYep, given that practically all altcoins are priced in bitcoin, market cap artificially rises extremely, or lowers extremely due to the inertness of the open trades.
- Medox 9y agowhat a difference from the screenshot in the article to the current numbers...
- eddyg 9y agoArchived link: http://archive.is/l1kc7 http://archive.is/l1kc7
- nkkollaw 9y agoThanks.
- gumby 9y agoAdmins, could you correct the headline to say “crypto currency website”?
- dang 9y agoSure.
- iak8god 9y ago"cryptocurrency" is a bit of a mouthful, so I at least understand the urge to shorten it, but I wish we could agree to at least shorten it to "cryptos," as in: "A Cryptos Website Changes Its Data..."
- tomrod 9y agoCrypto means cryptography. Cryptocurrency should be shortened another way. Perhaps "Cryptotoken."
- gumby 9y agoCryptocash perhaps
- iak8god 9y ago> Crypto means cryptography I hope that's considered obvious on HN. The suggestion was that "cryptos" could be a suitable plural abbreviation for "cryptocurrencies" (unless it's typically used as an abbreviation for "cryptographies," which it doesn't seem to be). Anyway, I confess that seems likely to just cause more confusion.
- skyisblue 9y agoPossibly intentional market manipulation? They are in the top 200 most visited sites in the world and supply api data to hundreds if not thousands of cryptocurrency price apps. Surely they knew their change would impact the market.
- djsumdog 9y agoI really think there is a considerable amount of market manipulation going on with crypto-currencies in general. There was an earlier thread to a blog post that got voted up quite a bit, but the comments all brought up that the author was just speculating and tried to pass it off as fact. There was also a pastebin up earlier that showed how someone had found wallets on the blockchain that used their own hashes as passwords, and were potentially being used to funnel money around (security holes in exchanges potentially?) It was removed from HN; found it on Lobsters. The trouble is that no one has really presented hard evidence, but a number of people I talked to who are developers in the regular financial sector do think it's highly probably that there is intentional manipulation. And with the blockchain being all hashes, numbers and mathematics, it also seems plausible that it's a system that can be gamed; or at least more easily gamed than regular fiat currency.
- dboreham 9y agoI'm beginning to see how delusional it is to think you can make money by producing something useful or of value in people's lives. That's for lusers. Instead mess with the neural pathways of a large population such that they just give you their money.
- noncoml 9y agoDepends on what you want in life. If all you care about is money, then yes, your post makes sense.
- kfriede 9y agoCaring solely about money often has the side effect of making others' lives better. Amazon gainfully employs over 500k [1] people, giving them means to put food on the table. Not saying that wouldn't happen without Amazon, but more job availability is always better than less. Bezos just became the richest man ever recorded [2]. [1]: http://money.cnn.com/2017/10/26/technology/business/amazon-earnings/index.html http://money.cnn.com/2017/10/26/technology/business/amazon-e... [2]: https://news.ycombinator.com/item?id=16108295 https://news.ycombinator.com/item?id=16108295
- ACow_Adonis 9y agoReminds me of: "Oh, Father. You're so wrong. Let me explain. [Puts and empty water glass on his desk] Life, which you so nobly serve, comes from destruction, disorder and chaos. Now take this empty glass. Here it is: peaceful, serene, boring. But if it is destroyed [Pushes the glass off the table. It shatters on the floor, and several small machines come out to clean it up] Look at all these little things! So busy now! Notice how each one is useful. A lovely ballet ensues, so full of form and color. Now, think about all those people that created them. Technicians, engineers, hundreds of people, who will be able to feed their children tonight, so those children can grow up big and strong and have little teeny children of their own, and so on and so forth. Thus, adding to the great chain of life. You see, father, by causing a little destruction, I am in fact encouraging life. In reality, you and I are in the same business.
- ratsimihah 9y agoBut can I do Dollar Cost Average with BTC?
- cwkoss 9y agoYes, Coinbase allows you to configure repeated buys or sells of a specified dollar amount.
- ratsimihah 9y agoOhh thanks I should look into that. Aren’t the transaction fees huge though?
- cwkoss 9y agoI think they are a bit over 1% right now. Not the cheapest way to get bitcoin, but not horrible.
- ctchocula 9y agoIf you use GDAX (the underlying exchange technology behind Coinbase and also owned by Coinbase) as a maker (meaning you use a limit order), you pay 0% fees. If you use GDAX as a taker (market order), you pay 0.25% fees.
- dragonwriter 9y agoThat's not what the maker/taker distinction means—a taker is an order to the extent it is filled because it matches a pre-existing order when it hits the sysyem; a limit order can be a taker if there's a matching order on the book when it hits the system. GDAX supports marking a limit order as “Post Only”, which cancels it if any part would fill as a taker order, but that's optional.
- sluggg 9y agoI am deeply surprised by how few people are mentioning bots. This is no doubt directly related to trading bots that are polling coinmarketcap and then buying/selling through some API like the one bittrex offers. The number of bots that are actively trading is unknown, but if you do some digging the amount of resources and interest there is around trading bots leads me to believe that the pool of bots must be massive. I would love to be able to quantify the number of trading bots that are running wild, but my feeble brain can't come up with anything, maybe if I worked at an exchange I would be able to. Any thoughts?
- intrasight 9y agoWhoever manages their networks could tell you
- tobltobs 9y agoHave a look at http://http://www.dancingbots.com http://http://www.dancingbots.com which visualizes Orderbook positions. Most of the action (95%?) close to current price looks like positions from bots. Compare the orderbooks of exchanges which have no fees for maker orders (like gdax, bitfinex) and are preferred by bots to those exchanges who do ask for a fee.
- sluggg 9y agoHEY! this site is amazing and is just what I am looking for. BUT the link you provided is missing a colon after "http" and I thought the site was down for a second. I am sure if others see this they will have similar issues. Please fix your link :)
- vijayr 9y agoDoes anyone know where CMC gets the circulation numbers?
- tim333 9y agoThey removed data from the Korean exchanges which have always had higher prices due to Korean exchange controls - once you've changed money to bitcoin you've got it out of the country. That data should always not really have been included if you wanted a fair idea of value.