4 ms·

The "Bart": sudden hundreds-of-Bitcoin pumps or dumps to burn the margin traders

19 points by davidgerard 8y ago

botever 8y ago
This sort of thing has always been prevalent even in more regulated markets. Index futures are a canonical current-day example. The industry is flooded with $500 daytrading margin brokers who sell order flow and (under the radar) margin utilization to big players, who can then perform similar manipulation to effectively steal money from uninformed, overleveraged small traders. It's legal theft by the same people who made massive overleveraged bets and got bailed out by insiders. Humans are a joke primitive species, even in the limited galactic order.
- davidgerard 8y ago
  oh yeah, it's just prevalent in cryptos - here we're talking about the biggest and most liquid crypto. It's a tiny, thin market.
dragontamer 8y ago
As BTC Difficulty decreases, the profitability of miners begins to re-enter the picture, but at a cost. It no longer costs ~$6000 of dollars to mine a bitcoin. Difficulty has dropped dramatically, by 30%+ since August, so miners can actually make money selling BTC in the $3000 to $4000 region now. I used to theorize that $6000 was the price floor for BTC, but I was proven wrong these past few months. If BTC's price drops, then miners leave, which causes the difficulty to drop, which allows (remaining) miners to stay in and make a profit. Which now brings up the question: what is BTC's true price floor? If difficulty can ramp up and down and respond to market conditions, what exactly is supporting BTC's price up? If anything, the low difficulty of BTC now acts as a resistance: miners probably are fine making a profit now at $3500ish, so I don't see any real reason for BTC's price to go up.
- jki275 8y ago
  It's very hard to define a floor. Speculation exists that there isn't one, though I wouldn't exactly agree with that. Bottom line, the floor is wherever people want to buy it enough to overcome their caution about doing so.

4 ms·

The "Bart": sudden hundreds-of-Bitcoin pumps or dumps to burn the margin traders

19 points by davidgerard 8y ago

botever 8y ago
This sort of thing has always been prevalent even in more regulated markets. Index futures are a canonical current-day example. The industry is flooded with $500 daytrading margin brokers who sell order flow and (under the radar) margin utilization to big players, who can then perform similar manipulation to effectively steal money from uninformed, overleveraged small traders. It's legal theft by the same people who made massive overleveraged bets and got bailed out by insiders. Humans are a joke primitive species, even in the limited galactic order.
- davidgerard 8y ago
  oh yeah, it's just prevalent in cryptos - here we're talking about the biggest and most liquid crypto. It's a tiny, thin market.
dragontamer 8y ago
As BTC Difficulty decreases, the profitability of miners begins to re-enter the picture, but at a cost. It no longer costs ~$6000 of dollars to mine a bitcoin. Difficulty has dropped dramatically, by 30%+ since August, so miners can actually make money selling BTC in the $3000 to $4000 region now. I used to theorize that $6000 was the price floor for BTC, but I was proven wrong these past few months. If BTC's price drops, then miners leave, which causes the difficulty to drop, which allows (remaining) miners to stay in and make a profit. Which now brings up the question: what is BTC's true price floor? If difficulty can ramp up and down and respond to market conditions, what exactly is supporting BTC's price up? If anything, the low difficulty of BTC now acts as a resistance: miners probably are fine making a profit now at $3500ish, so I don't see any real reason for BTC's price to go up.
- jki275 8y ago
  It's very hard to define a floor. Speculation exists that there isn't one, though I wouldn't exactly agree with that. Bottom line, the floor is wherever people want to buy it enough to overcome their caution about doing so.