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Slightly related: what kind of "trustable/auditable" public analytics are there on what contributes to the volume of Bitcoin trading from a "how authentic is i

Slightly related: what kind of "trustable/auditable" public analytics are there on what contributes to the volume of Bitcoin trading from a "how authentic is it" perspective? Peeling back the onion: I don't care if exchanges trade back and forth all day to simulate fake demand (volume/exchanges between wallets that aren't actually going to transactions for goods/services aka crypto isn't really being used at $26b/day). That doesn't explain to me the larger question: Who/what (entities, individuals, at what scale) are purchasing Bitcoin every day/week/month/quarter and holding on to it long enough for it to be up to $44k (166% year to date) How many individuals are contributing how many dollars and then holding the asset without speculatively turning around and selling it every single day? How much artificial vs non-artificial demand is there? How big of a role is the artificial demand? How is the artificial demand able to prop up (if it exists) $864b (current BTC market cap) worth of demand/assets?

junofan 3y ago
It’s objectively one of the best-performing assets in human history. Lots of funds are buying. What do you mean by “artificial demand”?
- I_Am_Nous 3y ago
  I believe they are referencing wash trading[1], where trades are made of a certain security but the buyers and sellers are the same person/group. This makes it appear like there is more demand for the security in the market, enticing buyers who look solely at trade volume. Forbes did some investigation[2] and found that a a lot of the trades that occur on exchanges are wash trades. So while it's clear that bitcoin is a cultural phenomenon it's hard to say exactly how much of the market is real and how much is a show to get more people holding bags and willing to pick up more. 1. https://www.investopedia.com/terms/w/washtrading.asp https://www.investopedia.com/terms/w/washtrading.asp 2. https://www.forbes.com/sites/javierpaz/2022/08/26/more-than-half-of-all-bitcoin-trades-are-fake/?sh=19d81046681f https://www.forbes.com/sites/javierpaz/2022/08/26/more-than-...
  - MuffinFlavored 3y ago
    > So while it's clear that bitcoin is a cultural phenomenon it's hard to say exactly how much of the market is real and how much is a show to get more people holding bags and willing to pick up more. And to the next layer: how effective it is at getting "people" (how many people/how many dollars) to "hold bags" (invest/purchase it/hold-on-for-dear-life)? How much of Bitcoin's ~160% runup/return this year so far can be attributed to regular Joe's investing their hard earned money into it? How can you quantify what portion/contribution of the probably... billion/trillion shift of money (from USD/EUR/whatever into BTC) it's taking to keep BTC at this $40k+ level? How is there new demand every day?
- MuffinFlavored 3y ago
  > It’s objectively one of the best-performing assets in human history. I feel like this ignores the question "should it be"? What purpose is it filling for society in its current state? I find it highly unlikely that 100% of its daily volume ($26b) is treating it as a currency (exchanging it for goods + services). I don't have the statistics but I'd go as far as to wager less than 50% of its volume is using it as a currency/vehicle for currency/vehicle for utility at all. Which goes back to the original question: just because it's one of the best performing assets of all time doesn't mean that it should be if you introduce logic + reason + facts around it, right? Who is using it for what currently and at what scale? Are 99.99% of people using it as a vehicle for speculative investment and nothing else? How many dollars are being pumped into it every day (inflows)? https://www.history.com/news/how-the-beanie-baby-craze-came-to-a-crashing-end https://www.history.com/news/how-the-beanie-baby-craze-came-...
  - codersfocus 3y ago
    > What purpose is it filling for society in its current state? It’s the greatest convenience-security ratio store of value. Precious physical things are not convenient. Fiat currency is not safe. (Don’t bring up consumer use cases. Bitcoin is a store of value, not a currency.)
    - MuffinFlavored 3y ago
      > It’s the greatest convenience-security ratio store of value. How? As an average (not doing anonymous things at crypto ATMs around the country, which might have cameras) US customer who wants to use it, you need to give Coinbase (exchange) a ton of banking + social security info, etc. (typical know-your-customer KYC validation flow, I think you even send then your driver's license)? And you are supposed to file whatever you do crypto wise on your taxes
  - deleted 3y ago
    [deleted]
  - heroprotagonist 3y ago
    > I find it highly unlikely that 100% of its daily volume ($26b) is treating it as a currency (exchanging it for goods + services). What happens if you apply this same criteria to, say, the US dollar? Should US dollars go away?
TacticalCoder 3y ago
> How much artificial vs non-artificial demand is there? I sure have no idea but there's demand and then there's supply. Supply of newly minted Bitcoins is going down by 50% in four months. I don't know who's buying all the coins but miners have costs to cover and it's known they exert a lot of pressure by selling part of their mined Bitcoins. That was Satoshi's great middle finger (I don't care if it's good or not: I see it as masterclass trolling): create something which, unlike, say, the USD, cannot be printed at will.
staplers 3y ago
> How big of a role is the artificial demand? That's determined by central banks. > How is the artificial demand able to prop up $864b worth of demand/assets? Ask yourself how central banks create money. Here's a hint: Over 90% of global currency is digital.
affyboi 3y ago
> I don't care if exchanges trade back and forth all day to simulate fake demand (volume/exchanges between wallets that aren't actually going to transactions for goods/services aka crypto isn't really being used at $26b/day). It sounds like you do care because you want to see “real” demand (unless I’m misinterpreting). This is the same reason wash trading is illegal in the regular markets

junofan 3y ago

It’s objectively one of the best-performing assets in human history. Lots of funds are buying. What do you mean by “artificial demand”?

I_Am_Nous 3y ago
I believe they are referencing wash trading[1], where trades are made of a certain security but the buyers and sellers are the same person/group. This makes it appear like there is more demand for the security in the market, enticing buyers who look solely at trade volume. Forbes did some investigation[2] and found that a a lot of the trades that occur on exchanges are wash trades. So while it's clear that bitcoin is a cultural phenomenon it's hard to say exactly how much of the market is real and how much is a show to get more people holding bags and willing to pick up more. 1. https://www.investopedia.com/terms/w/washtrading.asp https://www.investopedia.com/terms/w/washtrading.asp 2. https://www.forbes.com/sites/javierpaz/2022/08/26/more-than-half-of-all-bitcoin-trades-are-fake/?sh=19d81046681f https://www.forbes.com/sites/javierpaz/2022/08/26/more-than-...
- MuffinFlavored 3y ago
  > So while it's clear that bitcoin is a cultural phenomenon it's hard to say exactly how much of the market is real and how much is a show to get more people holding bags and willing to pick up more. And to the next layer: how effective it is at getting "people" (how many people/how many dollars) to "hold bags" (invest/purchase it/hold-on-for-dear-life)? How much of Bitcoin's ~160% runup/return this year so far can be attributed to regular Joe's investing their hard earned money into it? How can you quantify what portion/contribution of the probably... billion/trillion shift of money (from USD/EUR/whatever into BTC) it's taking to keep BTC at this $40k+ level? How is there new demand every day?
MuffinFlavored 3y ago
> It’s objectively one of the best-performing assets in human history. I feel like this ignores the question "should it be"? What purpose is it filling for society in its current state? I find it highly unlikely that 100% of its daily volume ($26b) is treating it as a currency (exchanging it for goods + services). I don't have the statistics but I'd go as far as to wager less than 50% of its volume is using it as a currency/vehicle for currency/vehicle for utility at all. Which goes back to the original question: just because it's one of the best performing assets of all time doesn't mean that it should be if you introduce logic + reason + facts around it, right? Who is using it for what currently and at what scale? Are 99.99% of people using it as a vehicle for speculative investment and nothing else? How many dollars are being pumped into it every day (inflows)? https://www.history.com/news/how-the-beanie-baby-craze-came-to-a-crashing-end https://www.history.com/news/how-the-beanie-baby-craze-came-...
- codersfocus 3y ago
  > What purpose is it filling for society in its current state? It’s the greatest convenience-security ratio store of value. Precious physical things are not convenient. Fiat currency is not safe. (Don’t bring up consumer use cases. Bitcoin is a store of value, not a currency.)
  - MuffinFlavored 3y ago
    > It’s the greatest convenience-security ratio store of value. How? As an average (not doing anonymous things at crypto ATMs around the country, which might have cameras) US customer who wants to use it, you need to give Coinbase (exchange) a ton of banking + social security info, etc. (typical know-your-customer KYC validation flow, I think you even send then your driver's license)? And you are supposed to file whatever you do crypto wise on your taxes
- deleted 3y ago
  [deleted]
- heroprotagonist 3y ago
  > I find it highly unlikely that 100% of its daily volume ($26b) is treating it as a currency (exchanging it for goods + services). What happens if you apply this same criteria to, say, the US dollar? Should US dollars go away?

TacticalCoder 3y ago

> How much artificial vs non-artificial demand is there? I sure have no idea but there's demand and then there's supply. Supply of newly minted Bitcoins is going down by 50% in four months. I don't know who's buying all the coins but miners have costs to cover and it's known they exert a lot of pressure by selling part of their mined Bitcoins. That was Satoshi's great middle finger (I don't care if it's good or not: I see it as masterclass trolling): create something which, unlike, say, the USD, cannot be printed at will.

staplers 3y ago

> How big of a role is the artificial demand? That's determined by central banks. > How is the artificial demand able to prop up $864b worth of demand/assets? Ask yourself how central banks create money. Here's a hint: Over 90% of global currency is digital.

affyboi 3y ago

> I don't care if exchanges trade back and forth all day to simulate fake demand (volume/exchanges between wallets that aren't actually going to transactions for goods/services aka crypto isn't really being used at $26b/day). It sounds like you do care because you want to see “real” demand (unless I’m misinterpreting). This is the same reason wash trading is illegal in the regular markets