7 ms·

The price of all crypto is managed. All exchanges have a huge % of wash trading to hold up prices, and insiders with giant ownership stakes manipulate markets.

by jasmer 3y ago

The price of all crypto is managed. All exchanges have a huge % of wash trading to hold up prices, and insiders with giant ownership stakes manipulate markets. All exchanges are either a scam, or 'implicitly colluding' with shady things. BTC is ironically not a very free market in that sense, moreover, because nobody needs it for anything, it has a buy-hold characteristic. If people needed BTC for things (which would force some liquidity ops) then we'd see a price that reflected something. Crypto markets are essentially 'schemes' of one kind or another, they serve no purpose other than to be a hustle. If people want to play dumb games, that's fine, as long as they are doing it legally and it doesn't rope in a lot of external players.

ceejayoz 3y ago
Precisely this. It's like being pleased about the value of your Madoff holdings. Looks great, on paper, until too many people try to cash out at once.
- pfisch 3y ago
  I mean you could say that about any stock or bank. If everyone tries to cash out it goes to 0.
  - pid-1 3y ago
    Stocks have value because they are cash flow generating assets, so if you sell low enough it will make economic sense for someone to buy, except for some liquidity catastrophe.
    - MicropenisMike 3y ago
      What about commodities then, like oil? It was not too long ago that the price for a barrel of oil was negative $40.
      - pid-1 3y ago
        Oil is a regular good that is priced according to supply and demand expectations. Goods can have negative prices due sharp drops in demand (a lot of X was produced, but no one wants to buy x and you are paying to store it).
  - moralestapia 3y ago
    Banks shouldn't ... in principle.
    - anonporridge 3y ago
      Fractional reserve banks (which is all modern banks) should in principle. The whole point of fractional reserve banking is to leverage people's trust in banks to try to generate faster growth and profits.
  - ceejayoz 3y ago
    There's substantial difference between a bank run and a Ponzi collapsing.
    - charcircuit 3y ago
      In both cases current assets < current liabilities. Both require getting a loan to pay out the depositors. Both make no sense to loan money to as they will have no way to afford the payments to be worth loaning to over someone else.
      - ceejayoz 3y ago
        > In both cases current assets < current liabilities. That there are some things the same does not make them the same. You and I are both humans, but we are not the same person. In a Ponzi collapse, all assets are typically < even current liabilities, let alone all of them. Unlike a bank run involving temporary liquidity issues, a Ponzi is never going to be able to pay everyone out.
        charcircuit 3y ago
        To the customer it's the same. People don't want to be told that they will get their funds in a few years, they want it now. Liquidating all your assets is going to reduce the total value of all of your assets to potentially below your liabilities. If it doesn't good job, that means the bank is safe against bank runs, but if not they aren't.
        ceejayoz 3y ago
        That’s an absurd assertion. No, to a customer, a bank run is rapidly dealt with via the FDIC; we just had a great example of this with SVB. Madoff’s victims were not so lucky.
        charcircuit 3y ago
        >we just had a great example of this with SVB. They were acquired by another bank. Someone could similarly acquire a Ponzi scheme and pay out the people who wished to withdraw.
  - hiq 3y ago
    One thing though is that is unlikely that everyone would cash out below a certain price for a stock can be sold for parts. There would be at least some people realizing that they might as well hold, liquidate the company and make a profit out of it. So in practice there's a floor for the stock price (as long as assets > liabilities or similar). That's not the case of BTC. Its value is completely depends on confidence. At no price can you be sure that you'll make a profit, you can only guess that it'll go back up, so there's no such floor.
  - ksherlock 3y ago
    Behind a stock you've got a company with cash flow and assets. If nothing else you can sell off the office furniture. Crypto is backed by ... a prime number written on a piece of paper (minus the paper)?
  - rurp 3y ago
    That's not really true, assuming it's a real company/bank with assets and revenue. If the stock is based on something with actual value there will many parties willing to buy the stock even if all of the current shareholders want to sell.
MuffinFlavored 3y ago
> All exchanges have a huge % of wash trading to hold up prices Even "knowing this" (I mean, none of us have really any proof just at what scale it's happening at and... the same things happens in the S&P500 with high frequency trading algorithms/bots trading back and forth, hedge funds, institutional investors, etc.) I don't feel like I can confidently explain who/how many people really dollar cost average into Bitcoin that can prop it up to $10k, $20k, $30k, etc. Where/who are the buyers? How many people across the world are actively STILL investing directly into BTC to the point where it's up 80-90% YTD?
- jasmer 3y ago
  Finance is extremely regulated even if there are shenanigans, Crypto is just an excuse to do finance without oversight, which means it's mostly shady. Every attempt to peel away the onion layer reveals mass problems. It's like saying 'we have no hard proof that all this Mafia gangs revenue came from illegal activity!'. What I'm saying is, the point of crypto is hustle, there is no real economy, and the players are all shady as can be. Literally nobody knows where the Binance guy even is! Why would the Binance guy want to hide from global authorities? Regular bank CEO's don't. It's mafia-adjacent the whole way down, with a lot of small dupes and kids playing with some amount of money. There is no 'there there' in the value creating sense that we might want to see. If you told me BTC was 95% regular people using it for business and 5% shady, I'd say we need to work on that problem. But it's only 5% 'useful' and the rest is just layers of scam and fraud. We need to dump crypto, and if we want to try that experiment again - because I think there might be value there - we can give it a new name and keep it clean from the start.
- rationalist 3y ago
  > none of us have really any proof just at what scale it's happening at True, but there was an exchange a few months ago that turned off trading for customers for whatever reason, but the exchange forgot to turn of its bot and you could see a perfectly-formed, gradually-increasing, stair-stepping pattern in it's price chart.
  - syspec 3y ago

by jasmer 3y ago

ceejayoz 3y ago

Precisely this. It's like being pleased about the value of your Madoff holdings. Looks great, on paper, until too many people try to cash out at once.

pfisch 3y ago
I mean you could say that about any stock or bank. If everyone tries to cash out it goes to 0.
- pid-1 3y ago
  Stocks have value because they are cash flow generating assets, so if you sell low enough it will make economic sense for someone to buy, except for some liquidity catastrophe.
  - MicropenisMike 3y ago
    What about commodities then, like oil? It was not too long ago that the price for a barrel of oil was negative $40.
    - pid-1 3y ago
      Oil is a regular good that is priced according to supply and demand expectations. Goods can have negative prices due sharp drops in demand (a lot of X was produced, but no one wants to buy x and you are paying to store it).
- moralestapia 3y ago
  Banks shouldn't ... in principle.
  - anonporridge 3y ago
    Fractional reserve banks (which is all modern banks) should in principle. The whole point of fractional reserve banking is to leverage people's trust in banks to try to generate faster growth and profits.
- ceejayoz 3y ago
  There's substantial difference between a bank run and a Ponzi collapsing.
  - charcircuit 3y ago
    In both cases current assets < current liabilities. Both require getting a loan to pay out the depositors. Both make no sense to loan money to as they will have no way to afford the payments to be worth loaning to over someone else.
    - ceejayoz 3y ago
      > In both cases current assets < current liabilities. That there are some things the same does not make them the same. You and I are both humans, but we are not the same person. In a Ponzi collapse, all assets are typically < even current liabilities, let alone all of them. Unlike a bank run involving temporary liquidity issues, a Ponzi is never going to be able to pay everyone out.
      - charcircuit 3y ago
        To the customer it's the same. People don't want to be told that they will get their funds in a few years, they want it now. Liquidating all your assets is going to reduce the total value of all of your assets to potentially below your liabilities. If it doesn't good job, that means the bank is safe against bank runs, but if not they aren't.
        ceejayoz 3y ago
        That’s an absurd assertion. No, to a customer, a bank run is rapidly dealt with via the FDIC; we just had a great example of this with SVB. Madoff’s victims were not so lucky.
        charcircuit 3y ago
        >we just had a great example of this with SVB. They were acquired by another bank. Someone could similarly acquire a Ponzi scheme and pay out the people who wished to withdraw.
- hiq 3y ago
  One thing though is that is unlikely that everyone would cash out below a certain price for a stock can be sold for parts. There would be at least some people realizing that they might as well hold, liquidate the company and make a profit out of it. So in practice there's a floor for the stock price (as long as assets > liabilities or similar). That's not the case of BTC. Its value is completely depends on confidence. At no price can you be sure that you'll make a profit, you can only guess that it'll go back up, so there's no such floor.
- ksherlock 3y ago
  Behind a stock you've got a company with cash flow and assets. If nothing else you can sell off the office furniture. Crypto is backed by ... a prime number written on a piece of paper (minus the paper)?
- rurp 3y ago
  That's not really true, assuming it's a real company/bank with assets and revenue. If the stock is based on something with actual value there will many parties willing to buy the stock even if all of the current shareholders want to sell.

MuffinFlavored 3y ago

> All exchanges have a huge % of wash trading to hold up prices Even "knowing this" (I mean, none of us have really any proof just at what scale it's happening at and... the same things happens in the S&P500 with high frequency trading algorithms/bots trading back and forth, hedge funds, institutional investors, etc.) I don't feel like I can confidently explain who/how many people really dollar cost average into Bitcoin that can prop it up to $10k, $20k, $30k, etc. Where/who are the buyers? How many people across the world are actively STILL investing directly into BTC to the point where it's up 80-90% YTD?

jasmer 3y ago
Finance is extremely regulated even if there are shenanigans, Crypto is just an excuse to do finance without oversight, which means it's mostly shady. Every attempt to peel away the onion layer reveals mass problems. It's like saying 'we have no hard proof that all this Mafia gangs revenue came from illegal activity!'. What I'm saying is, the point of crypto is hustle, there is no real economy, and the players are all shady as can be. Literally nobody knows where the Binance guy even is! Why would the Binance guy want to hide from global authorities? Regular bank CEO's don't. It's mafia-adjacent the whole way down, with a lot of small dupes and kids playing with some amount of money. There is no 'there there' in the value creating sense that we might want to see. If you told me BTC was 95% regular people using it for business and 5% shady, I'd say we need to work on that problem. But it's only 5% 'useful' and the rest is just layers of scam and fraud. We need to dump crypto, and if we want to try that experiment again - because I think there might be value there - we can give it a new name and keep it clean from the start.
rationalist 3y ago
> none of us have really any proof just at what scale it's happening at True, but there was an exchange a few months ago that turned off trading for customers for whatever reason, but the exchange forgot to turn of its bot and you could see a perfectly-formed, gradually-increasing, stair-stepping pattern in it's price chart.
- syspec 3y ago