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Cryptocurreny retailer BitPrime closes trading after running out of money
- llamataboot 4y agoIt has only just begun...
- version_five 4y agoMaybe... from what I see (which is limited), "crypto" is feeling the same downward pressure that other stocks like tech are feeling (someone just posted an article about that). But people still haven't come around to the "this is just BS" phase yet that needs to happen. All crypto under current operating models is worth zero, it doesn't need to be marked down, it needs to (and will) be recognized as a scam and written off. I don't see progress towards that out of any of the news I've seen.
- junofan 4y agoI don’t understand the go-to-zero case. Surely an open source, permissionless financial system has some value? There’s tons of value being captured in closed financial systems.
- the_gastropod 4y agoSurely an open source, battle-tested, massively widely used operating system like Linux has some value? There's tons of value being captured by closed operating systems.
- smabie 4y agoBut there is tons of value being captured by closed operating systems?
- the_gastropod 4y agoWindows is closed source and quite a profitable part of Microsoft’s business.
- Spooky23 4y agoSure, but it’s value is half of what it was this time last year.
- aaaaaaaaata 4y agoWhen it returns to "original" value +30%, will you return to this thread? Or are you only interested in discussing this when you can take a victory lap?
- Spooky23 4y agoI’m not “taking a victory lap”. You have a tech that supposed to be digital cash with gold properties that is insanely volatile, often takes a long time to settle and features opaque gas fees, etc. It’s a cool experiment, but it’s almost like Uber - something with great promise that delivered something lesser.
- Vladimof 4y agothe stock market crash indeed... looks like the market won't recover for 20 years
- 650REDHAIR 4y agoIt’s all a house of cards. I spent a little time in the industry and the most prominent voices are just snake oil salesmen and charlatans now. Anyone who truly believed from the beginning made so much money that it’s not worth the risk for them to be publicly involved in the community. It became an MLM for bros and basement-dwellers alike to gamble their stimulus checks on.
- Johnny555 4y agoAt least a house of cards has actual cards supporting it, it's not clear what's supporting cryptocurrency.
- geerlingguy 4y agoNFTs pointing to URLs of images of those cards.
- kd913 4y agoThe latter answer is simple. Tether and other stable coins printing money from nothing. They have statements that they are backed as equivalent to dollars but it is utter nonsense. Just yesterday tether printed another billion usdt. They were openly proven to have only 3% of their currency backed by USD by the NY AG but everyone just ignores that judgement. They never held under audit, have proven to not be backed by USD and refuse to disclose their holdings. Their CFO is an Italian surgeon who sold pirated copies of Windows. When eventually that falls, the entire space I figure will implode.
- thematrixturtle 4y agoThe good news that their bank Deltec's chairman created Inspector Gadget, so when trouble looms he can just "go go Gadget helicopter" and fly out of trouble! https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
- aaaaaaaaata 4y ago
- mckirk 4y agoRefreshing HN to find more signs of the cryptocalypse has definitely become a guilty pleasure of mine the last few days. I really don't wish for it, because so many people would get caught in the crossfire, but there's still that fascination for the 'train wreck in slow motion'.
- labster 4y agoAs a climate scientist (currently non-practicing) the cryptocalpyse is something I deeply wished for. If you want to make Ponzis that’s fine but there’s no reason to ruin the environment to do it. Tulips were a truly green asset bubble, maybe we could do them again. I feel sorry for the folks losing money, but not really because they still have more assets than I’ll ever have.
- Nursie 4y agoThe question is here - how can they run out of liquidity in the first place? Surely as an honest exchange platform you match buyers and sellers, and take a transaction fee? This implies they have been playing games with customer deposits. Which would be shocking for a cryptocurrency platform!
- djbusby 4y agoIf they didn't have an exact match for the deal maybe they just were the other party - waiting for the other side of the txn. So, in the middle they kept losing a bit on each deal as crypto dropped and poof...the market-maker funding pool is zero. Good news for $COIN?
- throwanem 4y agoThey could certainly use some right now.
- toxicFork 4y agoThey explain it pretty well in the article.
- readthenotes1 4y ago"Our overheads have exceeded our earnings for some time" You and I have a different idea of what " pretty well" means, unless I missed something.
- Nursie 4y agoFor some reason I missed that! This FAQ- "We don’t hold customer funds – at the time of the trade, we send the cryptocurrency directly to your wallet" I guess shows this isn't another Quadriga event. So that's good!
- Ygg2 4y agoWhat's a Quadriga event?
- soared 4y agoWould someone mind calming me by explaining why this is not a huge red flag, this isn’t the beginning of the end, and a theoretical crypto crash won’t throw the market into turmoil (or why the current market turmoil ain’t so bad)? I don’t have any kids to feed, just young dumb and tired of market crashes.
- ascendantlogic 4y agoIt sounds like it's a business that has run out of its own money at exactly the wrong time. There's no customer deposits on this exchange in terms of crypto accoording to their FAQ so this is a case of "startup runs out of money", not "crypto is going to zero"
- jimmydorry 4y agoMy speculation: It looks exactly like Robinhood (a liquidity issue), but without the faceless an unaccountable entity sitting behind them telling them to suspend trading. These guys appear to be acting as middlemen between their New Zealand customers and several exchanges. Bank transfers take days to finalize (and weeks to settle), so their business appears to be built around capitalizing on that time opportunity and allowing their customers to lock-in quotes without having to wait for their funds to appear in their exchange account if they dealt directly with an exchange. While the crypto markets are stable and the volume is predictable, everything is fine and they can maintain a balance on their exchanges and in their bank account. A sudden surge in volume (due to a massive price swing) means having to close shop and suspend trading while the transfer from exchange to bank account (or the other way) finalizes.
- gjvc 4y ago"The normalized insanity from the past several years is just beginning to unwind."
- imron 4y ago> or why the current market turmoil ain’t so bad You can buy the dip! /s
- seibelj 4y agoThis is not a product anyone has heard of. Negative crypto stories get a lot more play on HN than the legions of tech startups laying off workers, and FAANG stocks ruining RSU packages. The whole world of markets is being popped right now. For example pension funds are doing terribly: https://www.wsj.com/amp/articles/pensions-bad-year-poised-to-get-worse-11652175002 https://www.wsj.com/amp/articles/pensions-bad-year-poised-to... This has nothing to do with crypto and is going to hurt a lot of innocent people. Not a top concern for HN however.
- woah 4y agoGrubHub stock is down to $3 after a high of $20. Food is a scam.
- burnished 4y agoDo you know that GrubHub doesn't make food, their business model doesn't have anything to do with food, except in the most tangential sense?
- aaaaaaaaata 4y agoWhat does this have to do with perceived value based on today's market rate...?
- burnished 4y ago>>GrubHub stock is down to $3 after a high of $20. Food is a scam. It is a response to this statement. Grubhub and food are not linked.
- rchaud 4y agoNot a scam as such, but definitely a service that's been propped up with investor money, and is only now facing the realities of having to deliver real profits.
- Swenrekcah 4y ago
- rco8786 4y ago“Small startup closes after running out of money” is not a terribly catchy headline I guess.
- mdoms 4y agoIt's also less descriptive, accurate and precise.
- Lerc 4y agoI don't know about that. They include the word small. Judging from the original headline and HN story position, how big would you estimate this business to be?
- robocat 4y agoYou can estimate business size from: https://www.bitprime.co.nz/about-us/ https://www.bitprime.co.nz/about-us/
- deleted 4y ago[deleted]
- rco8786 4y agoYes true, but my point is more that the headline is purposefully catchy (which is fine, it's a headline) but the actual content is not really noteworthy in any way except that "cryptocurrency failing" gets people's attention. If BitPrime was a CRM SaaS that shut down and laid off all 6 of its employees or whatever nobody would think to write an article about it.
- krnlpnc 4y agoCanary in the coal mine
- KarlKemp 4y agoAnd that coal is needed to run a bunch of space-heaters made by NVIDIA.
- QuickMVP 4y agoWhere is the media what talked paper numbers as real valuations?
- phire 4y agoHmm... Bitprime have grown since the last time I was paying attention. 20 employees.... For some context, a few years ago, they only did OTC trades (you ask for a quote and have a few hours to confirm the price and send the funds), with quite a large minimum of a few thousand. You only really delt with them if you wanted to on-road or off-road large amounts of New Zealand dollars. They didn't even run their own crypto wallets or have any infrastructure. They would just run accounts on larger crypto exchanges (binance?) and manually confirm deposits. Looks like they have updated their process recently to be more automated so they can accept lower minimums, but their process apparently hasn't changed. They still don't hold customer funds and only trade between crypto and NZD. It's entirely possible they ran into problems because their model isn't compatible with large downward volatility. Or maybe an exchange froze their account?
- claytonjy 4y agoWho is the target market for such a service?
- samstave 4y agoyes ...?
- phire 4y agoThere are plenty of crypto exchanges that only deal with crypto. Or only have on/off ramps for some local currency that isn't really practical for people outside of that one country. Bitprime allowed people in NZ to easily transfer value in and out of those exchanges. Or directly into a wallet for other services (i.e. buying NFTs or paying ransomware), or to hoddle.
- tracer1 4y agoGenerally OTC desks are useful for large purchases. Let's say you want to acquire $100 million in Bitcoin - you could go to Coinbase and just do it, but you'd drastically move the market, have a really obvious candlestick, and an observant third party could look for large movements from Coinbase and potentially track your holdings / de-anonymize you. An OTC desk can be setup to spread the buy over several days / months, buy across markets, and optimize for best price execution. It's not necessarily a huge business, but a lot of businesses and high net worth individuals will use these types of services instead of trying to learn the skills themselves.
- rabuse 4y ago
- lostmsu 4y agoMonthly?
- burnished 4y agoTechnology forum has articles about controversial (polarizing!) technology topic. Tbh, the tenor here also isn't doomsday predictions, it's some "elaborate on the core value, any value" with some jaded cynicism akin to assuming any unknown telephone number is a scam call
- dehrmann 4y agoThis seems to be a small player, so it's not especially concerning, but when the Coinbase CEO says his company has "no risk of bankruptcy," it's one of those moments where I wonder why he felt he needed to say that. Sure, they reported it as a possible risk to the SEC, but then "nothing to see here, folks" doesn't inspire confidence.
- bau5 4y agoGrandstanding is commonplace in crypto. If you don't talk big and everyone else does, you sound like you lack confidence.
- cute_boi 4y agoI am amazed how dominos are falling one by one.
- smabie 4y agoThis is literally some no name small OTC desk that caters to the New Zealand retail market. It's success or failure doesn't really mean anything.
- cute_boi 4y agoYea, I know, but my opinion is based on multiple news not just this post :). https://community.intercoin.org/t/what-backs-a-currency-terra-luna-drops-nearly-100/2518 https://community.intercoin.org/t/what-backs-a-currency-terr...
- notananthem 4y agoCoinbase is gonna get rekt if their earnings and general operations are any indication
- mrtweetyhack 4y ago
- progx 4y agoIn a volatile market, when most of the trades happen, a trading platform run out of money. Aha.
- qeternity 4y agoWould not be surprised if they were keeping their treasury in UST as a number of other companies had been doing to earn 20% yield from Anchor.
- Damian21 4y ago[dead]