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Bitcoin and cryptocurrency prices have fallen sharply over the last few days

236 points by lossolo 7y ago

zionic 7y ago
I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
- qqn 7y ago
  Exactly
- majormajor 7y ago
  My take on the selloff is people looking for liquid cash. Very similar to stockpiling home supplies. People are looking for stuff they can use or trade in the very short term because they don't know how bad it would get. It's a lot harder to do that today with crypto. I haven't seen anyone with strong reason to believe that companies are gonna be that much worse off a year from now than they were a month ago, or for the four years after that, so I don't see a reason to sell stocks based on expected company performance anymore than to sell crypto - but in the short term, everyone's stockpiling immediate goods.
  - rabuse 7y ago
    Exactly. It's like here in Florida, when the systems go down after a hurricane, cash is king in the digital age.
  - Finnucane 7y ago
    That sorta depends. The energy companies are getting squeezed by the oil price war, and they are heavily leveraged and dependent on high prices. A lot of companies loaded up on cheap debt, so the banks are screwed if liquidity issues mean defaults.
  - isk517 7y ago
    I wouldn't be surprised if there was significant amount of sell off occurring because people are looking to start stockpiling home supplies. I've known more than a few conspiracy minded people that collect crypto currencies due to a belief that it will be a safe haven in the event of a government collapse, and the current Corona virus panic is probably causing a lot of them to realize that all of the bitcoin in the world may not be enough to get you a single roll of toilet paper if that time ever came.
  - agumonkey 7y ago
    IIUC the metatheory is that in times of crisis btc would strengthen and become more fiat than fiat.. so far it's not. But who knows ... maybe people will leverage the events to move forward on crypto in the next weeks...
  - comicjk 7y ago
    The average company a few years from now will probably be as profitable as the average company last year. But that's survivorship bias: some of the companies from last year might not be around anymore, and it's hard to predict which. I think that fear might be driving lower valuations.
- jfengel 7y ago
  One possibility is that it's because the stock market seems like a good buy for speculators right now. The stock market does have an underlying value long-term, in that stocks are pieces of companies that produce products. The true value of that is always uncertain, but various measures indicate that it may be approaching reality (after a long, overheated bull market). Crypto is more purely speculative, with no real underlying value aside from the hope that it will some day become the fiat currency of some nation. (Fiat currencies have a "value" in that they are the only thing a government will accept.) So it's possible that people are seeing bargains in another market. They need to move through fiat currency in order to buy it, but they don't hold it long enough for inflationary measures by central banks to affect it.
- helen___keller 7y ago
  > especially when "print more money" seems to be the fed's response to this The simple answer is that the quoted text isn't even a concern in your average investors head. Also why gold isn't doing great, and why the US dollar is doing just fine. People are escaping equities specifically, not the dollar. edit: If i had to guess, people are probably looking to maximize cash on hand with the goal of "buying the dip" when it looks like the market is going to bottom out.
- rossdavidh 7y ago
  Just an hypothesis (which applies to the stock market as well): if you already thought things were overvalued, but were just waiting for the right moment to cash out, then whether this moment makes rational sense or not, you get out now because you were going to get out soon anyway. Also, you may think everyone else is going to be "irrational" in this way, and wish to get out before they do. Sort of like buying toilet paper because you're worried about everybody else hoarding toilet paper.
  - colechristensen 7y ago
    People have been saying for a while the stock market was ripe for a downturn. It had been in one of the longest periods of consistent gains ever. Lots of things were overvalued and with the double hit of a pandemic which is certainly already having economic effects and an oil war within OPEC, one tends to think that companies are going to start making significantly less money (compound with aging population not being replaced with young people). Jumping off a burning ship isn't necessarily irrational.
- tomp 7y ago
  Say you have an extra tampon and want a banana. I want a tampon but don't have a banana. What would you rather accept from me in exchange for a tampon, $cash or some BTC in your online crypto wallet? What do you believe has better chance of being exchangeable for a banana, from someone else?
  - SuoDuanDao 7y ago
    What's the window on that question? I believe that QE has baked hyperinflation into the USD cake by now, that doesn't mean I expect it to hit main street by June.
    - tomp 7y ago
      Has it? QE has been happening for the last 10 years already, and inflation hasn't (in products; asset prices have inflated though).
      - SuoDuanDao 7y ago
        Precisely. My interpretation is that we would have had a deflationary cycle over the last decade had it not been for QE. Main street prices have remained fairly stable, but it looks to me like assets have priced in a strong future currency devaluation. I still think that devaluation is likely to happen.
- glofish 7y ago
  because bitcoin is not money, it is an asset, it is a property that can be traded for money but its value fluctuates and is not tied to anything other than people's perceived future value in it (which can be valuable, don't get me wrong there, all I am saying that it will change all the time)
  - lawn 7y ago
    What should be considered money is subjective and the value of all money comes from people's perceived future value in it. Even gold coins and dollar notes.
    - Barrin92 7y ago
      there's a fairly objective definition of a currency. it's a store of value and it's a means of transaction. Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. Also, there is a clear difference in underlying value. Bitcoins value is entirely speculative. The US dollars value is guaranteed by the US government, which in turn is underpinned by real economic assets of the American economy and its firms and so on. Which are very much real and not imaginary.
      - lawn 7y ago
        No, that's not the definition of a currency. Money has different functions, where store of value, unit of account and medium of exchange are the popular ones. And they have different properties, such as acceptable, fungible, durable and divisible and others (properties also differ.) The big point is that these are subjective, and exists on a scale, and they vary from community to community. Cigarettes can be considered a currency in some prisons for example. > Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. I never mentioned Bitcoin. There are many other cryptocurrencies with low fees. And I've bought VPNs, VPS, domains and computers with them, purchases that are completely legal. > The US dollars value is guaranteed by the US government The dollar will only hold value as people believe that the government can manage the dollar correctly, so my statement still holds. There's nothing intrinsically valuable with a dollar note.
- wayoutthere 7y ago
  I have a hypothesis that Bitcoin post-2018 is largely held by a handful of major banks as a way to sidestep anti money laundering rules. It's widely known (and proven in court) that the major banks routinely serve billionaire-class criminals (real criminals like drug cartels and terror groups) and large crypto holdings and prop trading operations allow them to move money on and off their books with relative ease. A slowdown in money laundering activity (as would be expected during an extended period of restriction of goods and services) would lead to a rapid drop in crypto prices.
  - simonh 7y ago
    I think this is a misunderstanding about how banks work. The board of directors or CEO of HSBC didn’t decide to get into the cartel money laundering business. Rather, some middle managers decided to turn a blind eye to some dodgy transactions, which got past the Bank’s AML controls, which were not up to scratch. I’m not justifying anything, they reneged on their legal responsibilities, but banks aren’t conscious entities that decide things like that. Also it’s highly unlikely a bank could hold vast BTC reserves without the regulators finding out about it. Anyway BTC is used for money laundering, but that doesn’t require holding reserves. Most money laundering transactions transit into and out of BTC very quickly. The only reason to keep BTC for very long is speculation.
  - OGWhales 7y ago
    I believe a more likely theory for the crash was the large exchanges pushing the price down on various exchanges to make money off the leveraged longs and then pair that with panic and you see this price plummet.
- Finnucane 7y ago
  The money that they are injecting is only going to be a momentary stopgap against the coming credit collapse.
- dageshi 7y ago
  During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instability. The reason was that people needed to sell their "winners" in order to cover their "losers". Stocks were down, they sold gold which was way up at that point to cover some of the losses and get cash.
  - colechristensen 7y ago
    One winner of an investment strategy is regularly rebalancing your portfolio to a set of fixed ratios between asset classes. Let's say you want a 1:1 cash value ratio between stocks and gold. If stocks go up and gold goes down: sell stocks, buy gold. If stocks crash and gold spikes: sell gold, buy stocks. It's an easy way to buy high and sell low without going to extremes.
- deleted 7y ago
  [deleted]
- baby 7y ago
  If you understand that the market is just a reflection of human emotions, then you understand what happened to the cryptocurrency market. Panic spreads, and it is not rational.
mrlala 7y ago
Hopefully this starts to kill the notion that crypto is some magical thing that people should gamble with. If it can't go up during a global crisis or EVEN be resilient.. then it's proven it's just a house of cards. Crypto technology itself has value, but not in most of it's current forms as some magical gambling currency/asset.
jiveturkey 7y ago
> Last Saturday, ahead of the traditional market rout caused by Opec, PlusToken scammers moved a little over $100 million worth of bitcoin to so-called mixers, designed to disguise the origin and destination of the coins. > The fraudsters may have then sold off the bitcoins, causing prices to fall as supply flooded the market, according to Singhal. May have? Is this anything more than pure speculation? I mean, I am a very, very big fan of using time to correlate events ("what changed"), so the mixing is certainly a signal, but how good of a signal? Why highlight PlusToken vs bitcoin holders en masse wanting to get cash out thanks to the market downturn?
vidanay 7y ago
Wait...aren't crypto currencies supposed to be the favored monetary instrument during times of crises?
- simonswords82 7y ago
  Not as much as cold hard cash.
  - wiredfool 7y ago
    I think Toilet Paper is the preferred currency now.
    - LargeWu 7y ago
      I know your comment is, at least somewhat, in jest, but it's kind of true. My wife's boss has been spending a good bit of his workdays lately tracking and buying gold. But not buying physical gold. Just buying a promise from some agent that he owns some gold. Of course, that's not going to do him any good in a crisis; you can't eat gold, you can't drink it, pretty sure you can't wipe your ass with it. You can only trade it. And when resources become scarce, utility becomes far more important than value. And gold certificates, or whatever, will become even less desirable.
      - wiredfool 7y ago
        Yeah, that was only half a joke. At some point, the only things that are worth anything are things that have utility. Money isn't intrinsically useful, it's only useful in what others will trade for it. The Postman, while it was resoundingly mocked as a movie, was a really chilling book that dealt with what happens when you get to that point.
    - vlan0 7y ago
      Unless you're a bidet user.
      - 7y ago
unhashable 7y ago
It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin and Gold is there. That is the staying power of scarcity via well known stock to flow ratios. I'm glad Bitcoin is not inversely correlated to equities, because that would mean Bitcoin went down in an equities uptrend. Being non-correlated is superior: Bitcoin marches to it's own drum. All this being said: cash is king in times of uncertainty. Bitcoin is a speculative bet that "money without masters" will become an essential part of the future monetary system. We're a long way from that still. Advice in good times and bad: maintain a deep safety net and don't get too nuts with debt or leverage.
- im3w1l 7y ago
  Why is there a liquidity crisis?
  - Infinitesimus 7y ago
    Watch the Fed's actions: (eg: https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-billion-into-short-term-bank-funding-expand-types-of-security-purchases.html https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-bi... ) The Fed has been very active in repo markets since last fall and has aggressively ramped up operations. As an armchair fake-economist, that sort of thing signals that banks are reducing loans between themselves because they don't want to be low on cash when stuff hits the fan. Reducing in available loans -> pretty high interest rates -> Fed stepping in to float the cash and buy some bonds. Perhaps someone closer to the money will chime in here with corrections/details but this smells like the big banks expect unpleasant times ahead (remember this started before Covid19)
    - mardifoufs 7y ago
      Repos aren't exactly bond buybacks, they are more like temporarily loaning cash in return of a treasury bond. It has a neutral effect on the Fed's balance sheet. So overall, the money supply stays the same. It does help keep liquidity available since few banks/Institutional investors keep any significant cash reserve which is usually okay, but can be dangerous if there is a sudden run for cash. And if anything, the Fed interventionist policies are a good sign. You could argue that it is bad for the Fed to intervene in the economy during bull markets and periods of economic growth, but for situations like these the Fed can be a huge factor in avoiding a collapse of credit and liquidity. If credit stays available there is little reason to believe the economy will be affected by anything more than what the virus directly causes. So structural collapse of the financial system/job market like that of 2008 is unlikely as long as credit is readily available to corporations and banks.
ErikAugust 7y ago
One of the supposed benefits of holding cryptocurrency that has been peddled is that it is a strong hedge against a down turn in traditional securities. Here we have a new, real data point to the contrary.
- zionic 7y ago
  I still think this is true in a "traditional" bear market where companies are doing poorly. I don't think is applies when the entire market is panic selling to acquire supplies.
  - wgjordan 7y ago
    This is the first bear market (drop of 20% from a recent peak in broad-based index) Bitcoin or the crypto-currency market has ever seen, 'traditional' or not, so it's really uncharted territory.
    - allovernow 7y ago
      This. Everyone is speaking so authoritatively as though they knew crypto was not a hedge. This is the first real such test that crypto has seen. Yes, it appears to have failed, but no one could have predicted this with any certainty.
      - OGWhales 7y ago
        Looking at the leveraged trading, which is generally controlling the price of the market in crypto… you see the large majority of people went long and lost big on it. Very few went short. To me it seems much more likely the large exchanges just dumped in order to make a killing off the leveraged longs. So in short people did actually believe in it as a shore of wealth and exchanges manipulated this belief in order to selfishly profit. This isn’t something that was easy to predict, my comment is obviously a reflection of what happened today but I think it’s the most logical explanation.
    - nicky0 7y ago
econcon 7y ago
Where is all this cash going? If stock is down, crypto is down. Where is all cash?
- 0x1221 7y ago
  It's in cash.
- glofish 7y ago
  does not need to go anywhere, cash is a form of storage
sna1l 7y ago
Bitcoin market is like the regular equities market...without the halting capabilities
- adventured 7y ago
  > Bitcoin market is like the regular equities market No it's not. The Bitcoin market is the exact opposite: it's unnecessary and of little consequential tangible value to the real economy. The regular equity markets have a large share of the productive output of nations behind them, including the employment and taxation that goes with that. Companies that actually produce goods and services. In many cases goods and services that people and other businesses have to purchase or otherwise heavily depend on. None of that is true about Bitcoin. It could disappear tomorrow and other than the lost capital trapped in it, it wouldn't matter in a meaningful way; and it wouldn't matter at all to the average person. The masses of people do not need it, they do not depend on it. Government revenue does not depend on it. The lives of billions of people do not depend on it. Now, for comparison, shut down the top five farm tractor manufacturing companies. Shut down Airbus and Boeing. Shut down Walmart, Costco, Target, and Amazon. Shut down every dental office. Shut down every auto manufacturing company and witness the industrial effects including unemployment. Close every power plant. Shut down the telecom companies and every media company. Shut down every publicly traded energy company. Close every publicly traded bank and financial firm. Close every publicly traded agricultural company including the major food producers. Compare that to Bitcoin vanishing tomorrow. By comparison, it would have zero consequence, it would not matter at all in any grand scheme of things.
  - gwbas1c 7y ago
    > It could disappear tomorrow and other than the lost capital trapped in it, it wouldn't matter in a meaningful way; and it wouldn't matter at all to the average person. That's because Bitcoin is a zero-sum game. No value is created or lost, it's basically just a big game of poker.
    - backupcavalry 7y ago
      This. Stocks can still generate dividends. The only way you 're making money from Bitcoin investments is if some other sucker buys it off you for more than you spent.
elorant 7y ago
I hope this whole madness will come to an end so that GPU prices will start deflating.
- netsharc 7y ago
  (Pick an appropriate meme template) GPU prices goes down... As China is shut down and can't make mew GPUs. Linus Tech Tips has a good video what the shutdown affects: it suppliers of suppliers are slowed down due to quarantine, then they're in trouble too: https://www.youtube.com/watch?v=SPoPwrQwm_g https://www.youtube.com/watch?v=SPoPwrQwm_g
iamaelephant 7y ago
People still talk about Bitcoin as though it's a real market and not completely manipulated by a handful of key players? Ok then.
- sandov 7y ago
  If you know how to ride the wave, you can still make money.
- sudouser 7y ago
  exaclty, it is owned by less than 1.000 people, I would bet you can count the key players with one hand.
- dntbnmpls 7y ago
  That's true of the stock market and every other market. For stocks, a bunch of market makers of major financial firms set the "market" for these stocks. The same for forex, commodities, you name it.
shiado 7y ago
I have made a large amount of money trading cryptocurrency over the years. This correlation is spurious at best. These stories are so wrong it is hilarious. The price action of crypto is unlike any other market. What we have seen over the last month is massive legs down caused by whales flooding the market at specific times. These bart patterns are so obvious I can't believe people can't draw these incredibly easy to see conclusions. Crypto is pure manipulation. This coronavirus panic happens to coincide with a period right before the block reward halving where it is in the interest of miners to drop the price as much as possible as to make the mining operations of competitors infeasible leaving them with a larger slice of the mining pool.
- paulgb 7y ago
  > This coronavirus panic happens to coincide with a period right before the block reward halving where it is in the interest of miners to drop the price as much as possible Besides selling at market the handful of coins they mine, by what mechanism can miners control the price?
- sparkie 7y ago
  Ok, this is completely silly. No miners have the luxury of the price dropping, as it could make all of them insolvent. They depend on Bitcoin's exchange rate increasing so that the revenue generated from the block reward exceeds the cost of electricity to run the miners. They're not working large enough profit margins to take such risks. It's non-workable anyway. If any miner has to drop out of the race, they still have an inventory of mining equipment to auction off. The highest bidder is simply going to put that equipment to reuse immediately, so there will be no meaningful reduction in overall hash rate. Any miner who attempted to cause the price of bitcoin to slump has simply shot themselves in the foot. If the dollar cost of Bitcoin does not continue to increase sufficiently over time, Bitcoin is dead and every businessman who took out loans to buy mining equipment is going to default.
  - shiado 7y ago
    Long term large scale miners with massive reserves of BTC (you could literally get 50BTC for ten minutes of CPU mining on your laptop when BTC started) can crash the price on a whim with a small percentage of their reserves due to the lack of volume in the BTC market in combination with the liquidations from ridiculous amounts of leverage people are using in crypto (binance and bitmex are >100x to unqualified investors) which causes accelerated declines when the price drops even slightly. They can use this as a short term strategy to force miners with less profitable operations (higher electricity costs, worse equipment) to liquidate their coins at a lower price and cease mining temporarily allowing the more profitable miners to enjoy less competition and the ability to buy the coins at a reduced price. Even if the operation starts up again after the market pumps the superior miner has increased their proportion of coins allowing them to swing the market even greater, and sell coins to get better equipment (the newest bitmain miners), and the bagholders who bought the worse equipment or have more expensive electricity naively set themselves up for failure. The entire crypto space relies on long term pumping and dumping as well as short term "barting" to liquidate leveraged traders. I didn't even mention bitmain patent fuckery and the likely collusion of key players with the BTC devs to purposely not scale BTC to increase transaction fees which benefits miners. The whole thing is a disgusting mess and I don't touch it anymore. Do not fuck with cryptocurrency. It is entirely bought and paid for.
jaltekruse 7y ago
I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable, but I see that happening only when technical and social hurdles are overcome to make it as widespread and scalable as the current credit card system for everyday transactions. Unfortunately for current cryptocurrencies, they just don't have what it takes to compete with decades of trust to get everyone to put their daily spending money in them, that is what will make a future system valuable. The current role they play as a speculative investment seems quite silly to me, literally they only thing they are good for is transactions, if you can't do that effectively I don't see value in the tokens at all. Imagine if someone started a stock exchange and listed a single stock, their own, the stock for the exchange itself, and no one else's. While you can buy some things with bitcoin or ethereum, it's nowhere near widespread, so that really seems to be effectively what it functions as for now, which looks very bizarre on its face. Unfortunately for the people who do want to get rich, if there is an eventual winner in crypto, their rise will probably look something like what we see now, limited buy in from speculators followed by some inflection point, so it's entirely possible buying this dip of ethereum or some other coin might be the right thing, but I'm just not sure any of them are ready yet. Even with SegWit and other stuff happening in bitcoin, it just isn't clear to me that becoming a cash or credit card replacement system is even the goal anymore, which seems like they are just riding on their first mover advantage to prop up the value more than anything at this point. Note: reposting this from the stock trading halt discussion after its parent appears to have been deleted.
- gwbas1c 7y ago
  > I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable Probably, but whatever it is, it won't be Bitcoin and some magic software updates won't make your Bitcoins turn into whatever cryptocurrency-ish thing wins. The other thing to remember is that cash doesn't appreciate in value. (In the US, we typically have 4% inflation every year.) If a cryptocurrency is going to work for day-to-day commerce, its value needs to be rather steady. (Either low inflation or low deflation.) This means you can't just stick a bunch of cryptocurrency in your wallet and expect it to make you rich overnight. (Note: We don't have a lot of experience with deflation as "normal" in modern economies, so if crypocurrency comes with low deflation, like we have low inflation, we'll all have to adjust our expectations with money.)
3fe9a03ccd14ca5 7y ago
It’s amazing that anybody believed these cryptos were any kind of hedge against the market. It was pure speculation. Always was.
- notyourday 7y ago
  I believe you mean gambling, not speculation.
d-d 7y ago
It will be interesting seeing how cryptocurrency performs during and after worldwide panic surrounding the coronavirus, the fed printing a trillion USD and so forth. I was astonished when Bitcoin rose above $30 so calling it a "crash" at $6,000 might be somewhat accurate short-term, but anything over $0.00 for randomized bits on a hard drive will always seem bananas to me.
- JTon 7y ago
  Europeans of old thought the same when they saw the Chinese using paper money as a medium of exchange :) I do understand your point though
- shawnz 7y ago
  > anything over $0.00 for randomized bits on a hard drive will always seem bananas to me. I'll happily buy the randomized bits making up your debit card number and PIN for $0.00
nonamenoslogan 7y ago
GASP you mean internet-only money I can't readily/easily/conveniently/privately spend isn't worth as much as you told me it was when I bought it? I thought we were going to the moon, gentlemen?
- chillwaves 7y ago
  Please do not comment as if this were Reddit.
  - nonamenoslogan 7y ago
    Thank you, I hadn't realized you were appointed the comment police. For the record--I usually reserve comments with detailed technical jargon and buzzwords specifically for Reddit; I just don't follow any magic-internet-money sub-reddits.
    - ggffryuuj 7y ago
      Can someone please flag this person?
      - nonamenoslogan 7y ago
        Ahh, zero sense of humor. Sorry to step on your -6 karma and bitcoin-lust with my pithy comments.
        icedchai 7y ago
        Indeed. You must've missed the memo. I know I did. The Internet is a safe space for serious business now. It's no longer just the fun world of lol cats, memes, and pr0n. We have serious things now. Like Facebook. And Snapchat.
        TrumpMyGuns 7y ago
        these people are idiots. i come here just to laugh at their existence.
thefounder 7y ago
Bitcoin is so 2009...how do we still have news about it? Are there people still waiting for an "exit"?
m3kw9 7y ago
Crypto crashing at a time like this is actually tell me its true colors
- OGWhales 7y ago
  That the crypto market is largely controlled by the exchanges?
deleted 7y ago
[deleted]
ackbar03 7y ago
I've been trying to avoid looking at my bitcoin portfolio lol. I agree the volatility in its price makes it far from ideal as an alternative currency. That being said what keeps me invested (a relatively small portion) is looking at places like Venezuela and a few other pockets of areas where the monetary system has collapsed or undergone hyper-inflation, bitcoin is being used as a means of exchange, albeit still rather limited. That goes to show the proof of concept works. Hence I think there is somewhat of a chance that there could be a more widespread use case for it, especially as the ecb and possibly the fed start flooding the markets with liquidity again.
- webninja 7y ago
  I hold a small amount of it and BSV as a hedge against the Fed flooding the market with liquidity too. Emphasis on small amount. Crypto usually rallies when the Fed undergoes extensive QE for a long period of time but the current popular crypto’s have flaws.
csomar 7y ago
I actively trade crypto. Today's crash was due (from what I'm seeing) to a massive Bitmex contract liquidation (probably in the $100m-300m range). The market, with panic, couldn't get the price in sync across all exchanges. At some point the difference between two exchanges is close to $1000/btc. Very profitable if you know what you are doing. You can AMA.
- OGWhales 7y ago
  I saw that the large majority today was lost on longs, with shorts being much less active. Do you believe it’s likely that the crash was intentional with the large exchanges pushing the price down on various exchanges to make money off the leveraged longs? Obviously panic plays into this as well. I’m not one to get involved in any type of trading personally, as I don’t trust myself, so this is outside of my space. Please excuse and correct me if I misused any terminology or don’t understand stuff. Some of my family is heavily invested in crypto, so I like to know what is going on. Anyway, does my assessment sound accurate to you? I would love to see you expand on this.
  - csomar 7y ago
    > I saw that the large majority today was lost on longs, with shorts being much less active. Given that Futures now have the most open interest, I'd say the long/short ratio is practically equal these days in Bitcoin land. > Do you believe it’s likely that the crash was intentional with the large exchanges pushing the price down on various exchanges to make money off the leveraged longs? No. Only bad traders will say that! I don't think there is any kind of price meddling from the exchanges themselves. Any exchange that does that will end up burning to the ground eventually (and there were exchanges that did that). The reason is, a single exchange will unlikely be able to move the price to the sought after direction. Given that trading is distributed through multiple exchanges that are in different jurisdiction, I can hardly see them colluding to manipulate the price. > Some of my family is heavily invested in crypto, so I like to know what is going on. God help them.
    - OGWhales 7y ago
shadowprofile77 7y ago
All of the crypto fans and hardcore fanatics kept saying it: "Bitcoin is digital gold don't you know? It's what's going to shoot to the moon as all that terrible icky fiat collapses in a major crisis! You just wait and see".. Well here we are. certified 100% organic Unfolding Global Pandemic and the cute bonus of teetering on the brink of a global recession. And what does Bitcoin do with all the rest of its cousins?...... It simply shits the bed. This was your shining moment crypto, and so far you've turned out even worse than the stock market.
strin 7y ago
The fact that Bitcoin is marketed as the “new gold” is a double-edged sword. Because of the hype, it’s too volatile to become gold.
edf13 7y ago
Some of this could be you can’t spend crypto to buy food in a crisis... cash is still king. When everything gets locked down cash is what you need
- onlyrealcuzzo 7y ago
  Banks won't accept your Bitcoin when you get margin called. You need to sell for real money.
- SuoDuanDao 7y ago
  Funnily enough, farmer's markets are some of the few places I've seen 'crypto accepted' signs in my city.
hurricanetc 7y ago
There is zero value in crypto as a currency with this kind of volatility. It would be equivalent to trying to buy coffee at Starbucks with shares of Boeing stock.

236 points by lossolo 7y ago

I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.

qqn 7y ago
Exactly
majormajor 7y ago
My take on the selloff is people looking for liquid cash. Very similar to stockpiling home supplies. People are looking for stuff they can use or trade in the very short term because they don't know how bad it would get. It's a lot harder to do that today with crypto. I haven't seen anyone with strong reason to believe that companies are gonna be that much worse off a year from now than they were a month ago, or for the four years after that, so I don't see a reason to sell stocks based on expected company performance anymore than to sell crypto - but in the short term, everyone's stockpiling immediate goods.
- rabuse 7y ago
  Exactly. It's like here in Florida, when the systems go down after a hurricane, cash is king in the digital age.
- Finnucane 7y ago
  That sorta depends. The energy companies are getting squeezed by the oil price war, and they are heavily leveraged and dependent on high prices. A lot of companies loaded up on cheap debt, so the banks are screwed if liquidity issues mean defaults.
- isk517 7y ago
  I wouldn't be surprised if there was significant amount of sell off occurring because people are looking to start stockpiling home supplies. I've known more than a few conspiracy minded people that collect crypto currencies due to a belief that it will be a safe haven in the event of a government collapse, and the current Corona virus panic is probably causing a lot of them to realize that all of the bitcoin in the world may not be enough to get you a single roll of toilet paper if that time ever came.
- agumonkey 7y ago
  IIUC the metatheory is that in times of crisis btc would strengthen and become more fiat than fiat.. so far it's not. But who knows ... maybe people will leverage the events to move forward on crypto in the next weeks...
- comicjk 7y ago
  The average company a few years from now will probably be as profitable as the average company last year. But that's survivorship bias: some of the companies from last year might not be around anymore, and it's hard to predict which. I think that fear might be driving lower valuations.
jfengel 7y ago
One possibility is that it's because the stock market seems like a good buy for speculators right now. The stock market does have an underlying value long-term, in that stocks are pieces of companies that produce products. The true value of that is always uncertain, but various measures indicate that it may be approaching reality (after a long, overheated bull market). Crypto is more purely speculative, with no real underlying value aside from the hope that it will some day become the fiat currency of some nation. (Fiat currencies have a "value" in that they are the only thing a government will accept.) So it's possible that people are seeing bargains in another market. They need to move through fiat currency in order to buy it, but they don't hold it long enough for inflationary measures by central banks to affect it.
helen___keller 7y ago
> especially when "print more money" seems to be the fed's response to this The simple answer is that the quoted text isn't even a concern in your average investors head. Also why gold isn't doing great, and why the US dollar is doing just fine. People are escaping equities specifically, not the dollar. edit: If i had to guess, people are probably looking to maximize cash on hand with the goal of "buying the dip" when it looks like the market is going to bottom out.
rossdavidh 7y ago
Just an hypothesis (which applies to the stock market as well): if you already thought things were overvalued, but were just waiting for the right moment to cash out, then whether this moment makes rational sense or not, you get out now because you were going to get out soon anyway. Also, you may think everyone else is going to be "irrational" in this way, and wish to get out before they do. Sort of like buying toilet paper because you're worried about everybody else hoarding toilet paper.
- colechristensen 7y ago
  People have been saying for a while the stock market was ripe for a downturn. It had been in one of the longest periods of consistent gains ever. Lots of things were overvalued and with the double hit of a pandemic which is certainly already having economic effects and an oil war within OPEC, one tends to think that companies are going to start making significantly less money (compound with aging population not being replaced with young people). Jumping off a burning ship isn't necessarily irrational.
tomp 7y ago
Say you have an extra tampon and want a banana. I want a tampon but don't have a banana. What would you rather accept from me in exchange for a tampon, $cash or some BTC in your online crypto wallet? What do you believe has better chance of being exchangeable for a banana, from someone else?
- SuoDuanDao 7y ago
  What's the window on that question? I believe that QE has baked hyperinflation into the USD cake by now, that doesn't mean I expect it to hit main street by June.
  - tomp 7y ago
    Has it? QE has been happening for the last 10 years already, and inflation hasn't (in products; asset prices have inflated though).
    - SuoDuanDao 7y ago
      Precisely. My interpretation is that we would have had a deflationary cycle over the last decade had it not been for QE. Main street prices have remained fairly stable, but it looks to me like assets have priced in a strong future currency devaluation. I still think that devaluation is likely to happen.
glofish 7y ago
because bitcoin is not money, it is an asset, it is a property that can be traded for money but its value fluctuates and is not tied to anything other than people's perceived future value in it (which can be valuable, don't get me wrong there, all I am saying that it will change all the time)
- lawn 7y ago
  What should be considered money is subjective and the value of all money comes from people's perceived future value in it. Even gold coins and dollar notes.
  - Barrin92 7y ago
    there's a fairly objective definition of a currency. it's a store of value and it's a means of transaction. Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. Also, there is a clear difference in underlying value. Bitcoins value is entirely speculative. The US dollars value is guaranteed by the US government, which in turn is underpinned by real economic assets of the American economy and its firms and so on. Which are very much real and not imaginary.
    - lawn 7y ago
      No, that's not the definition of a currency. Money has different functions, where store of value, unit of account and medium of exchange are the popular ones. And they have different properties, such as acceptable, fungible, durable and divisible and others (properties also differ.) The big point is that these are subjective, and exists on a scale, and they vary from community to community. Cigarettes can be considered a currency in some prisons for example. > Bitcoin is not really a means of transaction except for illegal ones where people are willing to accept the high fees. I never mentioned Bitcoin. There are many other cryptocurrencies with low fees. And I've bought VPNs, VPS, domains and computers with them, purchases that are completely legal. > The US dollars value is guaranteed by the US government The dollar will only hold value as people believe that the government can manage the dollar correctly, so my statement still holds. There's nothing intrinsically valuable with a dollar note.
wayoutthere 7y ago
I have a hypothesis that Bitcoin post-2018 is largely held by a handful of major banks as a way to sidestep anti money laundering rules. It's widely known (and proven in court) that the major banks routinely serve billionaire-class criminals (real criminals like drug cartels and terror groups) and large crypto holdings and prop trading operations allow them to move money on and off their books with relative ease. A slowdown in money laundering activity (as would be expected during an extended period of restriction of goods and services) would lead to a rapid drop in crypto prices.
- simonh 7y ago
  I think this is a misunderstanding about how banks work. The board of directors or CEO of HSBC didn’t decide to get into the cartel money laundering business. Rather, some middle managers decided to turn a blind eye to some dodgy transactions, which got past the Bank’s AML controls, which were not up to scratch. I’m not justifying anything, they reneged on their legal responsibilities, but banks aren’t conscious entities that decide things like that. Also it’s highly unlikely a bank could hold vast BTC reserves without the regulators finding out about it. Anyway BTC is used for money laundering, but that doesn’t require holding reserves. Most money laundering transactions transit into and out of BTC very quickly. The only reason to keep BTC for very long is speculation.
- OGWhales 7y ago
  I believe a more likely theory for the crash was the large exchanges pushing the price down on various exchanges to make money off the leveraged longs and then pair that with panic and you see this price plummet.
Finnucane 7y ago
The money that they are injecting is only going to be a momentary stopgap against the coming credit collapse.
dageshi 7y ago
During the financial crisis circa 2007-8 gold also sold off initially when a lot of gold bugs believed it should rise higher given the financial markets instability. The reason was that people needed to sell their "winners" in order to cover their "losers". Stocks were down, they sold gold which was way up at that point to cover some of the losses and get cash.
- colechristensen 7y ago
  One winner of an investment strategy is regularly rebalancing your portfolio to a set of fixed ratios between asset classes. Let's say you want a 1:1 cash value ratio between stocks and gold. If stocks go up and gold goes down: sell stocks, buy gold. If stocks crash and gold spikes: sell gold, buy stocks. It's an easy way to buy high and sell low without going to extremes.
deleted 7y ago
[deleted]
baby 7y ago
If you understand that the market is just a reflection of human emotions, then you understand what happened to the cryptocurrency market. Panic spreads, and it is not rational.

mrlala 7y ago

Hopefully this starts to kill the notion that crypto is some magical thing that people should gamble with. If it can't go up during a global crisis or EVEN be resilient.. then it's proven it's just a house of cards. Crypto technology itself has value, but not in most of it's current forms as some magical gambling currency/asset.

jiveturkey 7y ago

> Last Saturday, ahead of the traditional market rout caused by Opec, PlusToken scammers moved a little over $100 million worth of bitcoin to so-called mixers, designed to disguise the origin and destination of the coins. > The fraudsters may have then sold off the bitcoins, causing prices to fall as supply flooded the market, according to Singhal. May have? Is this anything more than pure speculation? I mean, I am a very, very big fan of using time to correlate events ("what changed"), so the mixing is certainly a signal, but how good of a signal? Why highlight PlusToken vs bitcoin holders en masse wanting to get cash out thanks to the market downturn?

vidanay 7y ago

Wait...aren't crypto currencies supposed to be the favored monetary instrument during times of crises?

simonswords82 7y ago
Not as much as cold hard cash.
- wiredfool 7y ago
  I think Toilet Paper is the preferred currency now.
  - LargeWu 7y ago
    I know your comment is, at least somewhat, in jest, but it's kind of true. My wife's boss has been spending a good bit of his workdays lately tracking and buying gold. But not buying physical gold. Just buying a promise from some agent that he owns some gold. Of course, that's not going to do him any good in a crisis; you can't eat gold, you can't drink it, pretty sure you can't wipe your ass with it. You can only trade it. And when resources become scarce, utility becomes far more important than value. And gold certificates, or whatever, will become even less desirable.
    - wiredfool 7y ago
      Yeah, that was only half a joke. At some point, the only things that are worth anything are things that have utility. Money isn't intrinsically useful, it's only useful in what others will trade for it. The Postman, while it was resoundingly mocked as a movie, was a really chilling book that dealt with what happens when you get to that point.
  - vlan0 7y ago
    Unless you're a bidet user.
    - 7y ago

unhashable 7y ago

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin and Gold is there. That is the staying power of scarcity via well known stock to flow ratios. I'm glad Bitcoin is not inversely correlated to equities, because that would mean Bitcoin went down in an equities uptrend. Being non-correlated is superior: Bitcoin marches to it's own drum. All this being said: cash is king in times of uncertainty. Bitcoin is a speculative bet that "money without masters" will become an essential part of the future monetary system. We're a long way from that still. Advice in good times and bad: maintain a deep safety net and don't get too nuts with debt or leverage.

im3w1l 7y ago
Why is there a liquidity crisis?
- Infinitesimus 7y ago
  Watch the Fed's actions: (eg: https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-billion-into-short-term-bank-funding-expand-types-of-security-purchases.html https://www.cnbc.com/2020/03/12/fed-to-pump-more-than-500-bi... ) The Fed has been very active in repo markets since last fall and has aggressively ramped up operations. As an armchair fake-economist, that sort of thing signals that banks are reducing loans between themselves because they don't want to be low on cash when stuff hits the fan. Reducing in available loans -> pretty high interest rates -> Fed stepping in to float the cash and buy some bonds. Perhaps someone closer to the money will chime in here with corrections/details but this smells like the big banks expect unpleasant times ahead (remember this started before Covid19)
  - mardifoufs 7y ago
    Repos aren't exactly bond buybacks, they are more like temporarily loaning cash in return of a treasury bond. It has a neutral effect on the Fed's balance sheet. So overall, the money supply stays the same. It does help keep liquidity available since few banks/Institutional investors keep any significant cash reserve which is usually okay, but can be dangerous if there is a sudden run for cash. And if anything, the Fed interventionist policies are a good sign. You could argue that it is bad for the Fed to intervene in the economy during bull markets and periods of economic growth, but for situations like these the Fed can be a huge factor in avoiding a collapse of credit and liquidity. If credit stays available there is little reason to believe the economy will be affected by anything more than what the virus directly causes. So structural collapse of the financial system/job market like that of 2008 is unlikely as long as credit is readily available to corporations and banks.

ErikAugust 7y ago

One of the supposed benefits of holding cryptocurrency that has been peddled is that it is a strong hedge against a down turn in traditional securities. Here we have a new, real data point to the contrary.

zionic 7y ago
I still think this is true in a "traditional" bear market where companies are doing poorly. I don't think is applies when the entire market is panic selling to acquire supplies.
- wgjordan 7y ago
  This is the first bear market (drop of 20% from a recent peak in broad-based index) Bitcoin or the crypto-currency market has ever seen, 'traditional' or not, so it's really uncharted territory.
  - allovernow 7y ago
    This. Everyone is speaking so authoritatively as though they knew crypto was not a hedge. This is the first real such test that crypto has seen. Yes, it appears to have failed, but no one could have predicted this with any certainty.
    - OGWhales 7y ago
      Looking at the leveraged trading, which is generally controlling the price of the market in crypto… you see the large majority of people went long and lost big on it. Very few went short. To me it seems much more likely the large exchanges just dumped in order to make a killing off the leveraged longs. So in short people did actually believe in it as a shore of wealth and exchanges manipulated this belief in order to selfishly profit. This isn’t something that was easy to predict, my comment is obviously a reflection of what happened today but I think it’s the most logical explanation.
  - nicky0 7y ago

econcon 7y ago

Where is all this cash going? If stock is down, crypto is down. Where is all cash?

0x1221 7y ago
It's in cash.
glofish 7y ago
does not need to go anywhere, cash is a form of storage

sna1l 7y ago

Bitcoin market is like the regular equities market...without the halting capabilities

adventured 7y ago
> Bitcoin market is like the regular equities market No it's not. The Bitcoin market is the exact opposite: it's unnecessary and of little consequential tangible value to the real economy. The regular equity markets have a large share of the productive output of nations behind them, including the employment and taxation that goes with that. Companies that actually produce goods and services. In many cases goods and services that people and other businesses have to purchase or otherwise heavily depend on. None of that is true about Bitcoin. It could disappear tomorrow and other than the lost capital trapped in it, it wouldn't matter in a meaningful way; and it wouldn't matter at all to the average person. The masses of people do not need it, they do not depend on it. Government revenue does not depend on it. The lives of billions of people do not depend on it. Now, for comparison, shut down the top five farm tractor manufacturing companies. Shut down Airbus and Boeing. Shut down Walmart, Costco, Target, and Amazon. Shut down every dental office. Shut down every auto manufacturing company and witness the industrial effects including unemployment. Close every power plant. Shut down the telecom companies and every media company. Shut down every publicly traded energy company. Close every publicly traded bank and financial firm. Close every publicly traded agricultural company including the major food producers. Compare that to Bitcoin vanishing tomorrow. By comparison, it would have zero consequence, it would not matter at all in any grand scheme of things.
- gwbas1c 7y ago
  > It could disappear tomorrow and other than the lost capital trapped in it, it wouldn't matter in a meaningful way; and it wouldn't matter at all to the average person. That's because Bitcoin is a zero-sum game. No value is created or lost, it's basically just a big game of poker.
  - backupcavalry 7y ago
    This. Stocks can still generate dividends. The only way you 're making money from Bitcoin investments is if some other sucker buys it off you for more than you spent.

elorant 7y ago

I hope this whole madness will come to an end so that GPU prices will start deflating.

netsharc 7y ago
(Pick an appropriate meme template) GPU prices goes down... As China is shut down and can't make mew GPUs. Linus Tech Tips has a good video what the shutdown affects: it suppliers of suppliers are slowed down due to quarantine, then they're in trouble too: https://www.youtube.com/watch?v=SPoPwrQwm_g https://www.youtube.com/watch?v=SPoPwrQwm_g

iamaelephant 7y ago

People still talk about Bitcoin as though it's a real market and not completely manipulated by a handful of key players? Ok then.

sandov 7y ago
If you know how to ride the wave, you can still make money.
sudouser 7y ago
exaclty, it is owned by less than 1.000 people, I would bet you can count the key players with one hand.
dntbnmpls 7y ago
That's true of the stock market and every other market. For stocks, a bunch of market makers of major financial firms set the "market" for these stocks. The same for forex, commodities, you name it.

shiado 7y ago

I have made a large amount of money trading cryptocurrency over the years. This correlation is spurious at best. These stories are so wrong it is hilarious. The price action of crypto is unlike any other market. What we have seen over the last month is massive legs down caused by whales flooding the market at specific times. These bart patterns are so obvious I can't believe people can't draw these incredibly easy to see conclusions. Crypto is pure manipulation. This coronavirus panic happens to coincide with a period right before the block reward halving where it is in the interest of miners to drop the price as much as possible as to make the mining operations of competitors infeasible leaving them with a larger slice of the mining pool.

paulgb 7y ago
> This coronavirus panic happens to coincide with a period right before the block reward halving where it is in the interest of miners to drop the price as much as possible Besides selling at market the handful of coins they mine, by what mechanism can miners control the price?
sparkie 7y ago
Ok, this is completely silly. No miners have the luxury of the price dropping, as it could make all of them insolvent. They depend on Bitcoin's exchange rate increasing so that the revenue generated from the block reward exceeds the cost of electricity to run the miners. They're not working large enough profit margins to take such risks. It's non-workable anyway. If any miner has to drop out of the race, they still have an inventory of mining equipment to auction off. The highest bidder is simply going to put that equipment to reuse immediately, so there will be no meaningful reduction in overall hash rate. Any miner who attempted to cause the price of bitcoin to slump has simply shot themselves in the foot. If the dollar cost of Bitcoin does not continue to increase sufficiently over time, Bitcoin is dead and every businessman who took out loans to buy mining equipment is going to default.
- shiado 7y ago
  Long term large scale miners with massive reserves of BTC (you could literally get 50BTC for ten minutes of CPU mining on your laptop when BTC started) can crash the price on a whim with a small percentage of their reserves due to the lack of volume in the BTC market in combination with the liquidations from ridiculous amounts of leverage people are using in crypto (binance and bitmex are >100x to unqualified investors) which causes accelerated declines when the price drops even slightly. They can use this as a short term strategy to force miners with less profitable operations (higher electricity costs, worse equipment) to liquidate their coins at a lower price and cease mining temporarily allowing the more profitable miners to enjoy less competition and the ability to buy the coins at a reduced price. Even if the operation starts up again after the market pumps the superior miner has increased their proportion of coins allowing them to swing the market even greater, and sell coins to get better equipment (the newest bitmain miners), and the bagholders who bought the worse equipment or have more expensive electricity naively set themselves up for failure. The entire crypto space relies on long term pumping and dumping as well as short term "barting" to liquidate leveraged traders. I didn't even mention bitmain patent fuckery and the likely collusion of key players with the BTC devs to purposely not scale BTC to increase transaction fees which benefits miners. The whole thing is a disgusting mess and I don't touch it anymore. Do not fuck with cryptocurrency. It is entirely bought and paid for.

jaltekruse 7y ago

I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable, but I see that happening only when technical and social hurdles are overcome to make it as widespread and scalable as the current credit card system for everyday transactions. Unfortunately for current cryptocurrencies, they just don't have what it takes to compete with decades of trust to get everyone to put their daily spending money in them, that is what will make a future system valuable. The current role they play as a speculative investment seems quite silly to me, literally they only thing they are good for is transactions, if you can't do that effectively I don't see value in the tokens at all. Imagine if someone started a stock exchange and listed a single stock, their own, the stock for the exchange itself, and no one else's. While you can buy some things with bitcoin or ethereum, it's nowhere near widespread, so that really seems to be effectively what it functions as for now, which looks very bizarre on its face. Unfortunately for the people who do want to get rich, if there is an eventual winner in crypto, their rise will probably look something like what we see now, limited buy in from speculators followed by some inflection point, so it's entirely possible buying this dip of ethereum or some other coin might be the right thing, but I'm just not sure any of them are ready yet. Even with SegWit and other stuff happening in bitcoin, it just isn't clear to me that becoming a cash or credit card replacement system is even the goal anymore, which seems like they are just riding on their first mover advantage to prop up the value more than anything at this point. Note: reposting this from the stock trading halt discussion after its parent appears to have been deleted.

gwbas1c 7y ago
> I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable Probably, but whatever it is, it won't be Bitcoin and some magic software updates won't make your Bitcoins turn into whatever cryptocurrency-ish thing wins. The other thing to remember is that cash doesn't appreciate in value. (In the US, we typically have 4% inflation every year.) If a cryptocurrency is going to work for day-to-day commerce, its value needs to be rather steady. (Either low inflation or low deflation.) This means you can't just stick a bunch of cryptocurrency in your wallet and expect it to make you rich overnight. (Note: We don't have a lot of experience with deflation as "normal" in modern economies, so if crypocurrency comes with low deflation, like we have low inflation, we'll all have to adjust our expectations with money.)

3fe9a03ccd14ca5 7y ago

It’s amazing that anybody believed these cryptos were any kind of hedge against the market. It was pure speculation. Always was.

notyourday 7y ago
I believe you mean gambling, not speculation.

d-d 7y ago

It will be interesting seeing how cryptocurrency performs during and after worldwide panic surrounding the coronavirus, the fed printing a trillion USD and so forth. I was astonished when Bitcoin rose above $30 so calling it a "crash" at $6,000 might be somewhat accurate short-term, but anything over $0.00 for randomized bits on a hard drive will always seem bananas to me.

JTon 7y ago
Europeans of old thought the same when they saw the Chinese using paper money as a medium of exchange :) I do understand your point though
shawnz 7y ago
> anything over $0.00 for randomized bits on a hard drive will always seem bananas to me. I'll happily buy the randomized bits making up your debit card number and PIN for $0.00

nonamenoslogan 7y ago

GASP you mean internet-only money I can't readily/easily/conveniently/privately spend isn't worth as much as you told me it was when I bought it? I thought we were going to the moon, gentlemen?

chillwaves 7y ago
Please do not comment as if this were Reddit.
- nonamenoslogan 7y ago
  Thank you, I hadn't realized you were appointed the comment police. For the record--I usually reserve comments with detailed technical jargon and buzzwords specifically for Reddit; I just don't follow any magic-internet-money sub-reddits.
  - ggffryuuj 7y ago
    Can someone please flag this person?
    - nonamenoslogan 7y ago
      Ahh, zero sense of humor. Sorry to step on your -6 karma and bitcoin-lust with my pithy comments.
      - icedchai 7y ago
        Indeed. You must've missed the memo. I know I did. The Internet is a safe space for serious business now. It's no longer just the fun world of lol cats, memes, and pr0n. We have serious things now. Like Facebook. And Snapchat.
      - TrumpMyGuns 7y ago
        these people are idiots. i come here just to laugh at their existence.

thefounder 7y ago

Bitcoin is so 2009...how do we still have news about it? Are there people still waiting for an "exit"?

m3kw9 7y ago

Crypto crashing at a time like this is actually tell me its true colors

OGWhales 7y ago
That the crypto market is largely controlled by the exchanges?

deleted 7y ago

[deleted]

ackbar03 7y ago

I've been trying to avoid looking at my bitcoin portfolio lol. I agree the volatility in its price makes it far from ideal as an alternative currency. That being said what keeps me invested (a relatively small portion) is looking at places like Venezuela and a few other pockets of areas where the monetary system has collapsed or undergone hyper-inflation, bitcoin is being used as a means of exchange, albeit still rather limited. That goes to show the proof of concept works. Hence I think there is somewhat of a chance that there could be a more widespread use case for it, especially as the ecb and possibly the fed start flooding the markets with liquidity again.

webninja 7y ago
I hold a small amount of it and BSV as a hedge against the Fed flooding the market with liquidity too. Emphasis on small amount. Crypto usually rallies when the Fed undergoes extensive QE for a long period of time but the current popular crypto’s have flaws.

csomar 7y ago

I actively trade crypto. Today's crash was due (from what I'm seeing) to a massive Bitmex contract liquidation (probably in the $100m-300m range). The market, with panic, couldn't get the price in sync across all exchanges. At some point the difference between two exchanges is close to $1000/btc. Very profitable if you know what you are doing. You can AMA.

OGWhales 7y ago
I saw that the large majority today was lost on longs, with shorts being much less active. Do you believe it’s likely that the crash was intentional with the large exchanges pushing the price down on various exchanges to make money off the leveraged longs? Obviously panic plays into this as well. I’m not one to get involved in any type of trading personally, as I don’t trust myself, so this is outside of my space. Please excuse and correct me if I misused any terminology or don’t understand stuff. Some of my family is heavily invested in crypto, so I like to know what is going on. Anyway, does my assessment sound accurate to you? I would love to see you expand on this.
- csomar 7y ago
  > I saw that the large majority today was lost on longs, with shorts being much less active. Given that Futures now have the most open interest, I'd say the long/short ratio is practically equal these days in Bitcoin land. > Do you believe it’s likely that the crash was intentional with the large exchanges pushing the price down on various exchanges to make money off the leveraged longs? No. Only bad traders will say that! I don't think there is any kind of price meddling from the exchanges themselves. Any exchange that does that will end up burning to the ground eventually (and there were exchanges that did that). The reason is, a single exchange will unlikely be able to move the price to the sought after direction. Given that trading is distributed through multiple exchanges that are in different jurisdiction, I can hardly see them colluding to manipulate the price. > Some of my family is heavily invested in crypto, so I like to know what is going on. God help them.
  - OGWhales 7y ago

shadowprofile77 7y ago

All of the crypto fans and hardcore fanatics kept saying it: "Bitcoin is digital gold don't you know? It's what's going to shoot to the moon as all that terrible icky fiat collapses in a major crisis! You just wait and see".. Well here we are. certified 100% organic Unfolding Global Pandemic and the cute bonus of teetering on the brink of a global recession. And what does Bitcoin do with all the rest of its cousins?...... It simply shits the bed. This was your shining moment crypto, and so far you've turned out even worse than the stock market.

strin 7y ago

The fact that Bitcoin is marketed as the “new gold” is a double-edged sword. Because of the hype, it’s too volatile to become gold.

edf13 7y ago

Some of this could be you can’t spend crypto to buy food in a crisis... cash is still king. When everything gets locked down cash is what you need

onlyrealcuzzo 7y ago
Banks won't accept your Bitcoin when you get margin called. You need to sell for real money.
SuoDuanDao 7y ago
Funnily enough, farmer's markets are some of the few places I've seen 'crypto accepted' signs in my city.

hurricanetc 7y ago

There is zero value in crypto as a currency with this kind of volatility. It would be equivalent to trying to buy coffee at Starbucks with shares of Boeing stock.