10 ms·

Can someone explain why BTC going from 13k to 20k in a month isn't the yearly pump and dump?

by jayd16 6y ago

seibelj 6y ago
I posted this in the other thread from today that briefly hit the front page: Bitcoin is a social phenomena - no government or company backs it. The only reason it has value is if people value it. Bitcoin promoters have convinced people it's a store of value, like gold except digital. As the Cult of Bitcoin spreads, it doesn't take that many new enthusiasts to push the price up, as unlike literally all other commodities on earth, the supply of bitcoin is truly constrained and there cannot be anymore made in response to demand above the normal rate of inflation. This time, big money, institutions, and the very rich are coming in addition to the widespread purchase by retail. The price is going to rise a lot.
- arcticbull 6y ago
  Bitcoin is a Bitfinex and Tether phenomenon. Since the Tether article was posted a few weeks ago another $2B fake dollars have been generated and used to buy Bitcoin. This absolutely and completely dwarfs the pennies Square and PayPal threw into the wishing well.
  - seibelj 6y ago
    Tether is a cornerstone of the crypto industry. You can post some random blog posts here but Tether is actually used by trading firms, and can be minted and redeemed through their portal here https://app.tether.to/app/login https://app.tether.to/app/login The Tether FUD is so dumb, but it's the last straw being grasped by perma-bears.
    - arcticbull 6y ago
      lol go on redeem some. If you actually read their terms of service it specifically says tethers do not grant you any claim on their reserves. I’ve no doubt they’re used by exchanges that don’t want to comply with the law and follow AML/KYC. That’s the point. Don’t carry water for these scammers they literally don’t have a bank account and admitted in court [1] much of their reserves are IOUs and crypto. Audit or gtfo (to tether inc not you). [1] https://www.google.com/amp/s/www.theblockcrypto.com/amp/daily/24139/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin https://www.google.com/amp/s/www.theblockcrypto.com/amp/dail...
    - headmelted 6y ago
      Nonsense. Tether has never been redeemed, and even if it could be redeemed, there is no possible way that they could cover the balance of issued tethers. It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
      - seibelj 6y ago
        You have no idea what you are talking about and are just spreading more FUD. https://www.theblockcrypto.com/post/48857/former-head-of-circle-otc-says-theres-more-to-the-tether-narrative https://www.theblockcrypto.com/post/48857/former-head-of-cir... I worked with Dan, I worked at Circle, we redeemed / minted billions and billions with Tether.
        arcticbull 6y ago
        Oh I didn’t realize Dan was an auditor. Which of the big ones does he work at? KPMG? Deloitte? PwC? This is a classic strategy employed by scammers to legitimize a scam. You pick a prominent individual and you make the fraud work for them, so they can tell other people it’s legit. Their last auditor quit, half way through the audit. No audit, no legitimacy, period.
        headmelted 6y ago
        Respectfully this is a difficult claim to believe. If your claim is that you redeemed billions of dollars in tethers for fiat USD then that’s newsworthy. Even if that were the case though, it does nothing to prove that Tether is able to cover its commitments. Especially not with the additional $16B USD on the books.
      - gruez 6y ago
        >Tether has never been redeemed Why is this relevant when you can withdraw tethers for USD at any participating exchange? Or are you saying that None of the exchanges that support tether (eg. bitfinex) has never fulfilled a withdraw? >It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback. Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.
dustingetz 6y ago
Patio11's take: (2019) "Credit bubble? Yes, there can no longer be serious doubt about this: people bought Bitcoin with money that didn’t exist, pushing up the price of Bitcoin. A lot of people currently think they are richer than they are." https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ I'd be interested in reading a counter-take, most bitcoiners I know just look away.
- safog 6y ago
  Yes, free money inflates risky assets, but it's also just supply and demand. Mining rewards got halved, so miners can't sell as many BTC as used to do after mining a block, so the supply of BTC just went down significantly. The more macro stuff like worries about inflation due to the Fed printing $$$, easy money (0% interest rates), and yes, some FOMO speculation is increasing demand. As far as I'm concerned this is working as intended. This is not the first boom / bust and this won't be the last.
- lambdadmitry 6y ago
  Tony Arcieri's take is pretty good, too, and extremely succinct https://twitter.com/bascule/status/1329580017446047748 https://twitter.com/bascule/status/1329580017446047748
- cheaprentalyeti 6y ago
  I'm late for an appointment, but... I'm reminded of the example of the closing years of the Kuomintang in China, where they were suffering from massive hyperinflation. Small businesses and co-ops would bet temporary loans from the central government in its banknotes but immediately change it to silver if possible to do business with, so they wouldn't have to deal with the debasement of the real currency over the course of the year.
- anythingdude321 6y ago
  Tether has accounting problems and remains a systemic risk. But this is mitigated by several factors. First, they are semi-audited and most educated guesses suggest they are collateralized one-to-one with $ at 70% or more. Second, tethers have become less systemically important over time, as other, better audited (or collateralized) stables have taken market share — this trend will likely continue. Third, tether brr doesn't compare to Fed brr and never will be able to, so ultimately, this won't matter in the long run.
miguelmota 6y ago
The PayPal integration of cryptocurrencies had a huge positive impact. Also more large institutions are diversifying their portfolio into Bitcoin.
nostrademons 6y ago
It's probably more reflective of inflation and the dollar losing value, which is the natural consequence of dropping interest rates to zero and pumping $6T more into the economy. TSLA has gone from $191 to $576 since June, GOOG from $1394->$1761, AMZN $2478->$3143, ZM $262->$466. Where I'm at restaurant meals have gone from about $13/plate to $20/plate, and houses have gone from ~$1.6M -> $2.1M. BTC's rise isn't all that out of line with any of those. I think you're seeing investors rush out of dollars and into anything that'll have hard value in the digital economy going forward. Inflation doesn't hit all markets evenly, so you may not see it in your paycheck yet (if you still have a paycheck) and areas without a lot of people seeing money come in won't have prices rise as much. But I think you should read this as a currency crisis for the dollar, not a bubble for Bitcoin.
- arcticbull 6y ago
  Inflation has a specific definition with reference to the cost of a set basket of goods and rent. An increase in the price of assets and assets alone as a result of an increase in money supply is not inflation.
  - sjwalter 6y ago
    You are talking specifically about consumer price inflation, which is as you state a well-specified concept based on a (hilariously disconnected from reality) weighted basket of goods and how the basket's price changes over time. Inflation as a concept itself is much broader than this. The comment you're replying to is referring to asset price inflation, which has been happening hardcore. You seem to be saying since the Fed's stupid basket hasn't shot up in price (based on what they're saying), that inflation hasn't happened?
    - arcticbull 6y ago
      I’m saying CPI inflation (which is what people mean when they say inflation) has not gone up. I suggest that to prevent confusion among the readers that folks using a nonstandard (or at least non-colloquial) definition of inflation should make that clear.
calebm 6y ago
Bitcoin is a hedge on the US dollar, so people probably suspect the economy will go down since Biden won.
- optimalsolver 6y ago
  Is that why Dow hit 30,000? Because investors are bearish on a Biden economy?
  - pashamur 6y ago
    Holding stocks is also a hedge on the USD, not unlike bitcoin. Perhaps the market is expecting more money printing.
X6S1x6Okd1st 6y ago
More on ramps and institutional investors buying in seems to be a big part of it.
- lambdadmitry 6y ago
  This "institutional investors" meme is a bit like God: no one can prove it, but it gives its believers all the hope. There is no evidence of that happening on massive scale and no reason for them to do so.
  - jakupovic 6y ago
    https://www.microstrategy.com/en/bitcoin https://www.microstrategy.com/en/bitcoin or https://www.bloomberg.com/news/articles/2020-11-29/guggenheim-fund-reserves-right-to-put-up-to-10-in-bitcoin-trust https://www.bloomberg.com/news/articles/2020-11-29/guggenhei... it's everywhere :(
  - leppr 6y ago
    https://www.coindesk.com/investment-giant-alliancebernstein-now-says-bitcoin-has-role-in-investors-portfolios https://www.coindesk.com/investment-giant-alliancebernstein-... American institutions are definitely going in. It's a solid ponzi, why would they shun that one when they went in all the others?
mrlala 6y ago
It's all bullshit speculation. And rich people / institutions doing whatever they can to "make money" no matter what. Am I saying crypto has no value at all and never will? No- but it's stupid that the "drive" for people to create new cryptos and hold current crypto is to uh.. make money off of it vs a currency like USD? That's stupid as hell. Crypto that is not pegged to something like USD is made for gambling and to make the rich richer. If I were to "gamble" $1000 in crypto the last few years sure, maybe I make 50-100k. Whoopdydoo. Yeah that's great but it's not like mega life altering. Rich people can be like "Oh I'm going to throw $1 million into this.. oh look, I just made $50-100 million, now I can take this and buy a bunch of new businesses or buy my new mega mansion somewhere!". It's just sickening, honestly.
- anythingdude321 6y ago
  that...doesn't make any sense. return 50x is returning 50x. many people would be thrilled to have 50-100k. It means a better house, maybe better schools, better food, better life. and that's just in America! Envy is the thief of joy
- Siira 6y ago
  The more money people throw at crypto the more risk they are taking. It’s actually the most equitable investment I know, open to almost anyone, and same return rates regardless of amount invested.

Can someone explain why BTC going from 13k to 20k in a month isn't the yearly pump and dump?

by jayd16 6y ago

Can someone explain why BTC going from 13k to 20k in a month isn't the yearly pump and dump?

I posted this in the other thread from today that briefly hit the front page: Bitcoin is a social phenomena - no government or company backs it. The only reason it has value is if people value it. Bitcoin promoters have convinced people it's a store of value, like gold except digital. As the Cult of Bitcoin spreads, it doesn't take that many new enthusiasts to push the price up, as unlike literally all other commodities on earth, the supply of bitcoin is truly constrained and there cannot be anymore made in response to demand above the normal rate of inflation. This time, big money, institutions, and the very rich are coming in addition to the widespread purchase by retail. The price is going to rise a lot.

arcticbull 6y ago
Bitcoin is a Bitfinex and Tether phenomenon. Since the Tether article was posted a few weeks ago another $2B fake dollars have been generated and used to buy Bitcoin. This absolutely and completely dwarfs the pennies Square and PayPal threw into the wishing well.
- seibelj 6y ago
  Tether is a cornerstone of the crypto industry. You can post some random blog posts here but Tether is actually used by trading firms, and can be minted and redeemed through their portal here https://app.tether.to/app/login https://app.tether.to/app/login The Tether FUD is so dumb, but it's the last straw being grasped by perma-bears.
  - arcticbull 6y ago
    lol go on redeem some. If you actually read their terms of service it specifically says tethers do not grant you any claim on their reserves. I’ve no doubt they’re used by exchanges that don’t want to comply with the law and follow AML/KYC. That’s the point. Don’t carry water for these scammers they literally don’t have a bank account and admitted in court [1] much of their reserves are IOUs and crypto. Audit or gtfo (to tether inc not you). [1] https://www.google.com/amp/s/www.theblockcrypto.com/amp/daily/24139/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin https://www.google.com/amp/s/www.theblockcrypto.com/amp/dail...
  - headmelted 6y ago
    Nonsense. Tether has never been redeemed, and even if it could be redeemed, there is no possible way that they could cover the balance of issued tethers. It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback.
    - seibelj 6y ago
      You have no idea what you are talking about and are just spreading more FUD. https://www.theblockcrypto.com/post/48857/former-head-of-circle-otc-says-theres-more-to-the-tether-narrative https://www.theblockcrypto.com/post/48857/former-head-of-cir... I worked with Dan, I worked at Circle, we redeemed / minted billions and billions with Tether.
      - arcticbull 6y ago
        Oh I didn’t realize Dan was an auditor. Which of the big ones does he work at? KPMG? Deloitte? PwC? This is a classic strategy employed by scammers to legitimize a scam. You pick a prominent individual and you make the fraud work for them, so they can tell other people it’s legit. Their last auditor quit, half way through the audit. No audit, no legitimacy, period.
      - headmelted 6y ago
        Respectfully this is a difficult claim to believe. If your claim is that you redeemed billions of dollars in tethers for fiat USD then that’s newsworthy. Even if that were the case though, it does nothing to prove that Tether is able to cover its commitments. Especially not with the additional $16B USD on the books.
    - gruez 6y ago
      >Tether has never been redeemed Why is this relevant when you can withdraw tethers for USD at any participating exchange? Or are you saying that None of the exchanges that support tether (eg. bitfinex) has never fulfilled a withdraw? >It’s the mother of all Ponzi schemes, clearly, and is definitely going to implode in the next big pullback. Sounds like a great way to make a lot of money. Tether is currently trading 1:1 with USD (yes, even at exchanges that offer real USD). It should be easy to short-sell a bunch of tether, and buy it back when in collapses. And unlike short-selling stocks, your downside should be relatively low as tethers can't realistically go above their current price.

dustingetz 6y ago

Patio11's take: (2019) "Credit bubble? Yes, there can no longer be serious doubt about this: people bought Bitcoin with money that didn’t exist, pushing up the price of Bitcoin. A lot of people currently think they are richer than they are." https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ I'd be interested in reading a counter-take, most bitcoiners I know just look away.

safog 6y ago
Yes, free money inflates risky assets, but it's also just supply and demand. Mining rewards got halved, so miners can't sell as many BTC as used to do after mining a block, so the supply of BTC just went down significantly. The more macro stuff like worries about inflation due to the Fed printing $$$, easy money (0% interest rates), and yes, some FOMO speculation is increasing demand. As far as I'm concerned this is working as intended. This is not the first boom / bust and this won't be the last.
lambdadmitry 6y ago
Tony Arcieri's take is pretty good, too, and extremely succinct https://twitter.com/bascule/status/1329580017446047748 https://twitter.com/bascule/status/1329580017446047748
cheaprentalyeti 6y ago
I'm late for an appointment, but... I'm reminded of the example of the closing years of the Kuomintang in China, where they were suffering from massive hyperinflation. Small businesses and co-ops would bet temporary loans from the central government in its banknotes but immediately change it to silver if possible to do business with, so they wouldn't have to deal with the debasement of the real currency over the course of the year.
anythingdude321 6y ago
Tether has accounting problems and remains a systemic risk. But this is mitigated by several factors. First, they are semi-audited and most educated guesses suggest they are collateralized one-to-one with $ at 70% or more. Second, tethers have become less systemically important over time, as other, better audited (or collateralized) stables have taken market share — this trend will likely continue. Third, tether brr doesn't compare to Fed brr and never will be able to, so ultimately, this won't matter in the long run.

miguelmota 6y ago

The PayPal integration of cryptocurrencies had a huge positive impact. Also more large institutions are diversifying their portfolio into Bitcoin.

nostrademons 6y ago

It's probably more reflective of inflation and the dollar losing value, which is the natural consequence of dropping interest rates to zero and pumping $6T more into the economy. TSLA has gone from $191 to $576 since June, GOOG from $1394->$1761, AMZN $2478->$3143, ZM $262->$466. Where I'm at restaurant meals have gone from about $13/plate to $20/plate, and houses have gone from ~$1.6M -> $2.1M. BTC's rise isn't all that out of line with any of those. I think you're seeing investors rush out of dollars and into anything that'll have hard value in the digital economy going forward. Inflation doesn't hit all markets evenly, so you may not see it in your paycheck yet (if you still have a paycheck) and areas without a lot of people seeing money come in won't have prices rise as much. But I think you should read this as a currency crisis for the dollar, not a bubble for Bitcoin.

arcticbull 6y ago
Inflation has a specific definition with reference to the cost of a set basket of goods and rent. An increase in the price of assets and assets alone as a result of an increase in money supply is not inflation.
- sjwalter 6y ago
  You are talking specifically about consumer price inflation, which is as you state a well-specified concept based on a (hilariously disconnected from reality) weighted basket of goods and how the basket's price changes over time. Inflation as a concept itself is much broader than this. The comment you're replying to is referring to asset price inflation, which has been happening hardcore. You seem to be saying since the Fed's stupid basket hasn't shot up in price (based on what they're saying), that inflation hasn't happened?
  - arcticbull 6y ago
    I’m saying CPI inflation (which is what people mean when they say inflation) has not gone up. I suggest that to prevent confusion among the readers that folks using a nonstandard (or at least non-colloquial) definition of inflation should make that clear.

calebm 6y ago

Bitcoin is a hedge on the US dollar, so people probably suspect the economy will go down since Biden won.

optimalsolver 6y ago
Is that why Dow hit 30,000? Because investors are bearish on a Biden economy?
- pashamur 6y ago
  Holding stocks is also a hedge on the USD, not unlike bitcoin. Perhaps the market is expecting more money printing.

X6S1x6Okd1st 6y ago

More on ramps and institutional investors buying in seems to be a big part of it.

lambdadmitry 6y ago
This "institutional investors" meme is a bit like God: no one can prove it, but it gives its believers all the hope. There is no evidence of that happening on massive scale and no reason for them to do so.
- jakupovic 6y ago
  https://www.microstrategy.com/en/bitcoin https://www.microstrategy.com/en/bitcoin or https://www.bloomberg.com/news/articles/2020-11-29/guggenheim-fund-reserves-right-to-put-up-to-10-in-bitcoin-trust https://www.bloomberg.com/news/articles/2020-11-29/guggenhei... it's everywhere :(
- leppr 6y ago
  https://www.coindesk.com/investment-giant-alliancebernstein-now-says-bitcoin-has-role-in-investors-portfolios https://www.coindesk.com/investment-giant-alliancebernstein-... American institutions are definitely going in. It's a solid ponzi, why would they shun that one when they went in all the others?

mrlala 6y ago

It's all bullshit speculation. And rich people / institutions doing whatever they can to "make money" no matter what. Am I saying crypto has no value at all and never will? No- but it's stupid that the "drive" for people to create new cryptos and hold current crypto is to uh.. make money off of it vs a currency like USD? That's stupid as hell. Crypto that is not pegged to something like USD is made for gambling and to make the rich richer. If I were to "gamble" $1000 in crypto the last few years sure, maybe I make 50-100k. Whoopdydoo. Yeah that's great but it's not like mega life altering. Rich people can be like "Oh I'm going to throw $1 million into this.. oh look, I just made $50-100 million, now I can take this and buy a bunch of new businesses or buy my new mega mansion somewhere!". It's just sickening, honestly.

anythingdude321 6y ago
that...doesn't make any sense. return 50x is returning 50x. many people would be thrilled to have 50-100k. It means a better house, maybe better schools, better food, better life. and that's just in America! Envy is the thief of joy
Siira 6y ago
The more money people throw at crypto the more risk they are taking. It’s actually the most equitable investment I know, open to almost anyone, and same return rates regardless of amount invested.