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Your post assumes that there's no manipulation of the market occurring, an assumption we know to be false.
by mdoms 5y ago
Your post assumes that there's no manipulation of the market occurring, an assumption we know to be false.
- csomar 5y agoI don’t think the miners can manipulate their energy bill, salaries, rent, hardware costs, etc…
- Clewza313 5y agoThe OP's assumption was that $42M in fiat has to enter every day to keep prices stable. Manipulation can definitely keep prices stable without a net fiat inflow... until one day it can't, because as you note the bills have to be paid in fiat, not Tether etc.
- graeme 5y agoI should be clear that I actually agree with this. The sketch I laid out above would be what is required for long run stability. I’m in fact more inclined to the view that prices aren’t sustainable and will collapse and fraud has propped it up. You still need a $42 million a day outflow to satisfy miners if they are all selling. But this money could be coming from balances on exchanges etc rather than new entrants. So yes, seems stable until suddenly it becomes clear the reserves aren’t there and money people believed is real, isn’t. There is, for example, a vast gulf between the amount of money people think they have on Binance and the amount of money that actually exists on Binance. One of these days they’ll to Mt. Gox…
- jkhdigital 5y agoYeah man, just sprinkle a little magic manipulation dust on that market and watch it go NUTS! Attributing a phenomenon to some high-level concept with no attempt to explain how the observed characteristics of said phenomenon can be causally linked to a concrete, specific instantiation of said high-level concept is, depending on the context, more commonly called a "superstition" or a "conspiracy theory".
- Clewza313 5y agoSeriously? The specific instantiation of the high-level concept is the proliferation of stablecoins, most notably Tether, which has printed $62 billion and counting. It doesn't require a conspiracy theory to note that being able to literally print money would be incredibly lucrative for everybody involved, and many concerns have been raised about the extent to which these coins are backed by fiat, since if they aren't, that would hugely inflate crypto valuations.
- jkhdigital 5y agoI’m well acquainted with the shady dealings of Tether and Bitfinex, but that is still not a concrete, causal explanation for an observed phenomenon.
- nikanj 5y agoSure they can, stealing electricity has been one of the tools of trade for mining operations
- graeme 5y agoI did mention that and said it was a stretch to assume. The exercise is nonetheless useful, I think, just to get a base idea of what numbers would have to be IF markets were working normally. It's also probably a maximum on net new money entering the market with stable prices, come to think of it. Though I'm inclined to agree with your view that actually the markets are net negative, being held aloft by Tether/exchanges, and will be vulnerable to a swift collapse when the money runs out. I'm just not sure $100 million is the amount to do it.