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I assume this is to control inflation to some degree. As an aside, the BTC USD rate has also jumped during this turmoil, and in many ways, it appears to mirror

by osrec 4y ago

I assume this is to control inflation to some degree. As an aside, the BTC USD rate has also jumped during this turmoil, and in many ways, it appears to mirror safe haven commodities quite closely. I find it interesting that an asset with such a "bad" reputation in the media is attracting investors during these unstable times.

JumpCrisscross 4y ago
> it appears to mirror safe haven commodities quite closely 100%. Crypto, broadly, behaved like a safe asset in the last weeks.
- pclmulqdq 4y ago
  *a safe asset with thin liquidity and $2 billion of cash injections from binance and bitfinex
  - JumpCrisscross 4y ago
    > a safe asset with thin liquidity and $2 billion of cash injections from binance and bitfinex Safe asset is in part a statistical designation: it holds value or goes up in times of financial stress [1][2]. Crypto did that in the last weeks. There is a second component of money-like stability that crypto does not meet. But it's interesting to see crypto rise while bank stability falters when, previously, Bitcoin was correlated with the S&P 500. [1] https://www.stlouisfed.org/on-the-economy/2018/december/safe-assets-us-economy https://www.stlouisfed.org/on-the-economy/2018/december/safe... [2] https://www.jstor.org/stable/2328809?seq=1#metadata_info_tab_contents https://www.jstor.org/stable/2328809?seq=1#metadata_info_tab...
    - pclmulqdq 4y ago
      Right, but what I'm saying is that the appearance of a "safe asset" relied on $2 billion of purchases and very thin liquidity in the market (allowing that $2 billion to have a larger than normal effect on price). Without the $2 billion of extra purchases, who knows whether it would have been a "safe asset" or not? My guess is "no."
      - JumpCrisscross 4y ago
        > without the $2 billion of extra purchases, who knows whether it would have been a "safe asset" or not? My guess is "no." I tend to agree. But external stabilization hasn't been a disqualifier for historical safe assets.
        notahacker 4y ago
        A track record of it failing to hold up under numerous other periods of market turmoil is pretty disqualifying though, as is its spectacular failure to achieve one of its stated goals of being an inflation hedge when we finally got around to experiencing significant inflation.
        JumpCrisscross 4y ago
        > track record of it failing to hold up under numerous other periods of market turmoil is pretty disqualifying though I agree. To be clear, I'm not declaring Bitcoin a safe asset. Just pointing out that it behaved like one in the preceding weeks. That's genuinely interesting. > its spectacular failure to achieve one of its stated goals of being an inflation hedge Correct. Though I'd be amiss not pointing out that equities, too, failed their traditional role as an inflation hedge in that time.
- deleted 4y ago
  [deleted]
tablespoon 4y ago
> I find it interesting that an asset with such a "bad" reputation in the media is attracting investors during these unstable times. Are people actually rationally using Bitcoin as a safe-haven, or are the Bitcoin maximalists irrationally fantasizing that this time they'll get some crisis that will fulfill their wildest dreams, so are piling more money into it?
- wslh 4y ago
  We will see but I think in a context with much uncertainty Bitcoin or other cryptocurrencies could be at the same level of uncertainty than the traditional economy and rising up.
- whimsicalism 4y ago
  I'm not sure the distinction between those two thoughts are as clear as you think. If money moves into it and the price tends to increase during inflationary times, then you would be rational to use it as a safe-haven, regardless of what other people are doing.
- onlyrealcuzzo 4y ago
  Tether printed $6B since SVB collapsed. It's not surprising prices are up. If you believe Tether's are real - then you believe the increase is real. If you believe Tether's are fake - then you believe the increase is fake. Same crypto story, different day.
scrlk 4y ago
BTC going up is probably due to Binance converting $1 bn of stablecoins: https://www.coindesk.com/markets/2023/03/13/binance-will-convert-1b-worth-of-busd-stablecoin-to-bitcoin-ether-bnb-and-other-tokens/ https://www.coindesk.com/markets/2023/03/13/binance-will-con... That's a lot of buying pressure.

by osrec 4y ago

JumpCrisscross 4y ago

> it appears to mirror safe haven commodities quite closely 100%. Crypto, broadly, behaved like a safe asset in the last weeks.

pclmulqdq 4y ago
*a safe asset with thin liquidity and $2 billion of cash injections from binance and bitfinex
- JumpCrisscross 4y ago
  > a safe asset with thin liquidity and $2 billion of cash injections from binance and bitfinex Safe asset is in part a statistical designation: it holds value or goes up in times of financial stress [1][2]. Crypto did that in the last weeks. There is a second component of money-like stability that crypto does not meet. But it's interesting to see crypto rise while bank stability falters when, previously, Bitcoin was correlated with the S&P 500. [1] https://www.stlouisfed.org/on-the-economy/2018/december/safe-assets-us-economy https://www.stlouisfed.org/on-the-economy/2018/december/safe... [2] https://www.jstor.org/stable/2328809?seq=1#metadata_info_tab_contents https://www.jstor.org/stable/2328809?seq=1#metadata_info_tab...
  - pclmulqdq 4y ago
    Right, but what I'm saying is that the appearance of a "safe asset" relied on $2 billion of purchases and very thin liquidity in the market (allowing that $2 billion to have a larger than normal effect on price). Without the $2 billion of extra purchases, who knows whether it would have been a "safe asset" or not? My guess is "no."
    - JumpCrisscross 4y ago
      > without the $2 billion of extra purchases, who knows whether it would have been a "safe asset" or not? My guess is "no." I tend to agree. But external stabilization hasn't been a disqualifier for historical safe assets.
      - notahacker 4y ago
        A track record of it failing to hold up under numerous other periods of market turmoil is pretty disqualifying though, as is its spectacular failure to achieve one of its stated goals of being an inflation hedge when we finally got around to experiencing significant inflation.
        JumpCrisscross 4y ago
        > track record of it failing to hold up under numerous other periods of market turmoil is pretty disqualifying though I agree. To be clear, I'm not declaring Bitcoin a safe asset. Just pointing out that it behaved like one in the preceding weeks. That's genuinely interesting. > its spectacular failure to achieve one of its stated goals of being an inflation hedge Correct. Though I'd be amiss not pointing out that equities, too, failed their traditional role as an inflation hedge in that time.
deleted 4y ago
[deleted]

tablespoon 4y ago

> I find it interesting that an asset with such a "bad" reputation in the media is attracting investors during these unstable times. Are people actually rationally using Bitcoin as a safe-haven, or are the Bitcoin maximalists irrationally fantasizing that this time they'll get some crisis that will fulfill their wildest dreams, so are piling more money into it?

wslh 4y ago
We will see but I think in a context with much uncertainty Bitcoin or other cryptocurrencies could be at the same level of uncertainty than the traditional economy and rising up.
whimsicalism 4y ago
I'm not sure the distinction between those two thoughts are as clear as you think. If money moves into it and the price tends to increase during inflationary times, then you would be rational to use it as a safe-haven, regardless of what other people are doing.
onlyrealcuzzo 4y ago
Tether printed $6B since SVB collapsed. It's not surprising prices are up. If you believe Tether's are real - then you believe the increase is real. If you believe Tether's are fake - then you believe the increase is fake. Same crypto story, different day.

scrlk 4y ago

BTC going up is probably due to Binance converting $1 bn of stablecoins: https://www.coindesk.com/markets/2023/03/13/binance-will-convert-1b-worth-of-busd-stablecoin-to-bitcoin-ether-bnb-and-other-tokens/ https://www.coindesk.com/markets/2023/03/13/binance-will-con... That's a lot of buying pressure.