161–170 of 359 posts
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All bitfinex has to do is prove they have the money. but they can't do that.
They have publicly refuted the claims, but people are still running around with pitchforks.
"Our bank is totally solvent, honest" doesn't work during a bank run. Real banks show their books to regulators.
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This "FUD" could be easily dismissed by showing a bank account statement containing these $814M. The fact that Bitfinex doesn't do that means they have something to hide or are in serious trouble.
No, it's pretty normal for private companies not to share that kind of data.
I found this comment, by Richard Berger on SeekingAlpha, compelling: > STOP! and think about what this author has revealed. Even IF Tether is NOT running a fraud, the arbitrage positions that automatically exist between Bitcoin and any tether are real and do create incentive to create an arbitraged feedback loop whereby a pegged tether between Bitcoin - any_generic_tether - USD does exist and self feeds, driving up B…
There's no reason arbitrage should push up the price of Bitcoin. Tether exists to normalize arb opportunities between exchanges. That's what it was created for. There is indeed a real question as to whether or not Bitfinex has issued more Tether than it has in reserve, or whether or not they will actually pay people out for their Tether tokens. But there is no 'arbitrage feedback loop' driving the price rise.
What things are created for and how they actually behave often diverge.
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All bitfinex has to do is prove they have the money. but they can't do that.
They have publicly refuted the claims, but people are still running around with pitchforks.
For all the bad press that Bitfinex gets, they're the only exchange that I know which lets you sign up for an account and start depositing, trading and withdrawing cryptocurrencies in less than 10 minutes. At least when my money is on Bitfinex, I know that I can take it all out at any time... With that kind of liquidity, I wouldn't care if Bitfinex was owned and operated by a colony of wild monkeys. I don't care if t…
I found this comment, by Richard Berger on SeekingAlpha, compelling: > STOP! and think about what this author has revealed. Even IF Tether is NOT running a fraud, the arbitrage positions that automatically exist between Bitcoin and any tether are real and do create incentive to create an arbitraged feedback loop whereby a pegged tether between Bitcoin - any_generic_tether - USD does exist and self feeds, driving up B…
That author is plain wrong and shows deep ignorance about bitcoin and the crypto-market. An unsustainable price of bitcoin will lead to the collapse of other exchanges since people cashing out on these exchanges requires enormous amount of real money. This will create a situation where the price of bitcoin in Bitfinex is higher than other exchanges by a big gap. This is not the case, actually the opposite is true: Bi…
For example, if suddenly everyone wants to sell BTC, the price would drop, at which point the exchange could buy the BTC at a much lower price, or not buy at all?
(unless they commit fraud, massively purchase BTC without having the actual money to back it, then not be able to wire money out of our accounts?)
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> Bitcoins can only be created via mining Why do people think that it's impossible for exchanges to do fractional reserve with bitcoin?
Because you can't lend out a Bitcoin you don't have, unlike fiat currency.
A bitcoin bank would work the same way. You deposit bitcoins by sending them to the banks wallet. They put a number in a database saying that you have 20 bitcoins in your account. If you then withdraw it, you will get a random selection of bitcoins they have in their wallet.
all the "safeguards" the financial instruments have, didn't stopped them from crashing the economy in 2008, bitcoin is actually a response to that, I did lost my job then and had quite a hard time, now the same bankers tell me what is fraud and what is not. In my country banks moved away from their social propose lending, and they just take high commissions for everything (eg. ATM commission for seeing how much I hav…
If you had securities investments in 2008, your money is fine, as long as you held it for a few years before or after 2008. Only if you cashed out stocks in 2009 or sold your last house in 2010 would you be hurting. For the larger economy, there's no reason to expect Bitcoin would promote general economic health/growth more than national fiat currency.
When something doesn't make sense, usually it's because information is missing. Every market participant knows that Tether doesn't prove their reserves, and yet the market exchange rate to USD stays in a tight band between 0.98 and 1.02 across multiple exchanges. If the market doesn't trust Tether, then it should trade at a deep discount to USD, not at parity. Similarly, the conventional wisdom says cryptocurrencies…
the market is extremely illiquid. even if you know it's a scam you have few options if you want to cash out. you can trade bitcoin for cash balances at various exchanges but actually withdrawing those balances is subject to miniscule daily/monthly withdrawal limits and if there's a run on the market those exchanges will almost certainly collapse. there's no significant over the counter market. you can swap your bitco…
Trading is dominated by smart money -- whales, arbitrageurs, etc. Coinbase may have a lot of newbies buying 0.002 BTC, but these aren't the ones trading Tether.
Whales and arbitrageurs have many facilities for withdrawing national currencies. They've completed the AML/KYC process. They have access to multiple banks in multiple countries.
If the smart money knows Tethers are fractional reserve, if they know cryptocurrencies are bubbling, wouldn't they withdraw?
Wouldn't the smart money put downward pressure on exchange rates?
And if the market is that illiquid, a little downward pressure would be magnified into even more severe price drops.
Since that's not happening with Tether, BTC or ETH, there must be another explanation.
Maybe the smart money knows something that isn't obvious to the rest of us.