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A joke that makes some people PAPER millionaires. People are ignorant about liquidity risk and just assume there will be buyers when they want to cash out.
by DebtDeflation 5y ago
A joke that makes some people PAPER millionaires. People are ignorant about liquidity risk and just assume there will be buyers when they want to cash out.
- vgeek 5y agoExactly. When you look at the depth of the order books (https://bittrex.com/Market/Index?MarketName=USDT-DOGE https://bittrex.com/Market/Index?MarketName=USDT-DOGE), even selling $1MM will shift the price down by nearly 50%.
- argvargc 5y agoThis is a valid point in general, but for top tier currencies such as Doge, there are literally hundreds of exchanges with such orderbooks so it's not a concern. Further, most large trades don't take place on exchanges public orderbooks, but on private OTC desks with separate books, for this reason. Generally, large buyers are matched OTC to large sellers at prices a little different to the on-market, but better than relying on on-market liquidity. The same happens in traditional finance, or anywhere. For example, if a taxi company wants to buy 1000 cars, they won't attempt to get them from the local yard.
- wickoff 5y agoBittrex is a dead exchange these days. On a particularly frothy day DOGE hit something like 80B in voilume across all pairs and exchanges.
- noxer 5y agoThe order books are not "real" its mostly bots who place and remove orders on the fly and they react to the price and to the price on other exchanges. There is no way to know how much the price would drop if someone sells for $1MM. also selling all at once, selling it over a few minutes or selling it over an few hours will drastically change the effect. No one who wants to maximize profit would sell fast if liquidity is low because obviously your average at lower then.
- josu 5y agoSomeone must be selling them at 30 cents, for other people to buy it. So some people are definitely making money.
- meowster 5y agoI used to be active in crypto subreddits. It's incredible how many people don't realize 'for every buyer, there is a seller'. A lot of the commenters did not grasp basic economics.
- eli 5y agoI wonder how often they're the same person
- graeme 5y agoYes but that doesn’t mean people are selling large amounts each day. What is the volume? And how much of it is wash trading?
- josu 5y agoThe volume has been huge, at some point it was the most traded perp on FTX. I don't think wash trading is that prevalent (except for maybe in some minor books on Binance).
- deleted 5y ago[deleted]
- camjohnson26 5y agoIt has made many people actual millionaires, there’s plenty of liquidity in Doge.
- Giorgi 5y agoThat can be said about any stock though... or you know... debit card and banks.