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What's Happening with Bitcoin Prices

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Re: What's Happening with Bitcoin Prices

#81

Post by tehlike »

cantrip wrote: post #20
RexetBlell wrote: post #12

Earlier quoted context omitted.

Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?

Tether are, ostensibly, backed by $1 in a bank somewhere. Having a dollar token is very useful, since you can move in and out of crypto trading positions into a stable store of value, good old USD. Converting to real money takes a long time so you can't react to the market, and is also taxable and often has other fees on top.

Converting to another coin is also taxable. Similar to selling a stock.

Re: What's Happening with Bitcoin Prices

#82

Post by tehlike »

runeks wrote: post #43
RexetBlell wrote: post #12

Earlier quoted context omitted.

Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?

In my experience, no one has a satisfying explanation for this. Nor why this would affect the USD price of bitcoin.

Bitfinex can become insolvent, which means people cannot cashout their usdt's. Prices may crash.

Re: What's Happening with Bitcoin Prices

#83

Post by tehlike »

runeks wrote: post #43
RexetBlell wrote: post #12

Earlier quoted context omitted.

Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?

In my experience, no one has a satisfying explanation for this. Nor why this would affect the USD price of bitcoin.

Also you can trade among yourself and create the illusion of hot market, suck a lot of people in, and use the funds from these people to stay afloat.

Re: What's Happening with Bitcoin Prices

#84

Post by tech6 »

indubitable wrote: post #25

I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm…

Any thoughts on why this unprecedented appreciation this week ? I believe bitcoin has increased by 2K $ per day.

Re: What's Happening with Bitcoin Prices

#85

Post by gt_ »

thisisit wrote: post #79
gt_ wrote: post #75

Earlier quoted context omitted.

The difference between “new coin” and “grant token” is eluding me here.

"Grant token" is the command for generating new token/coin.

OK. Maybe i am assuming there have been no new Tether tokens because the “granter” decided not to grant anymore, but it has actually been a market response?

I am wondering... if they can grant new tokens, why havent they? Lack of demand?

Re: What's Happening with Bitcoin Prices

#86

Post by 59nadir »

gt_ wrote: post #78
59nadir wrote: post #74

Earlier quoted context omitted.

Supporting something because you like the idea of it is not smart, no. It's honorable and a great thing to do, but in terms of investments it's certainly not smart. I didn't mean "dumb money" as in all the people who invested in Bitcoin are dumb, but rather that these were not well thought out investments with sound rationales.

OK. Thanks for clarifying. You mean to say it’s not smart investing . You are judging intelligence based on purely selfish outcomes. I understand now.

Intelligent people can be stupid investors. I'm not judging anyone's intelligence at all. An investment made with no sound rationale by a Nobel prize winner is effectively dumb money.

Re: What's Happening with Bitcoin Prices

#87

Post by antonvs »

samsonradu wrote: post #56
eximius wrote: post #6

Earlier quoted context omitted.

Issue Tether (it is issued, not mined), trade Tether for Bitcoin, BTC price in Tethers increases, due to stated and believed peg of Tether to USD, BTC raises in USD price due to arbitrage executioners. More details: https://seekingalpha.com/article/4129543-bitcoin-one-way-go-...

Failing to understand how you could peg Tether to the USD and have people believe you. I was under the impression that pegging to a currency is something only a very big player, with close to unlimited resources can achieve, see People's Bank of China, Swiss Bank etc. Among others, you have to defend the currency against speculators and that requires a lot of capital. Even the Bank of England failed to maintain the p…

> Failing to understand how you could peg Tether to the USD and have people believe you.

In principle, it's simple: people pay you USD for Tether, you charge them a small percentage fee, put the remaining USD in a reserve account, and issue the buyer a corresponding amount of Tether. You do the reverse to buy Tether back from people.

For the trust issue, you get a reputable company to audit your reserves and Tether/USD transactions.

If you do this, no defense of anything is needed - if someone wants to sell Tether, they can always come back to the company that issues it and exchange their Tether for some of the dollars in the reserve account at an exchange rate of 1:1 minus fees.

In practice however, the auditing and transparency for Tether is not sufficient to be sure that this is what's actually happening. So the "having people believe you" part is definitely an issue right now.

> Even the Bank of England failed to maintain the peg to the German Deutschmark some years ago.

That's not the same kind of peg, at all. A Tether is just supposed to be a proxy for a USD. The pound and Deutschmark were two otherwise completely independent currencies, so the idea of pegging one to the other was dubious to start with. Here's a brief article which covers some of the issues with that peg: https://www.investopedia.com/ask/answers/08/george-soros-ban...

Re: What's Happening with Bitcoin Prices

#88

Post by thisisit »

gt_ wrote: post #85
thisisit wrote: post #79

Earlier quoted context omitted.

"Grant token" is the command for generating new token/coin.

OK. Maybe i am assuming there have been no new Tether tokens because the “granter” decided not to grant anymore, but it has actually been a market response? I am wondering... if they can grant new tokens, why havent they? Lack of demand?

Maybe market response, maybe due to increase focus from people on the "granter" account. It can be n-number of things.

Re: What's Happening with Bitcoin Prices

#89

Post by gt_ »

thisisit wrote: post #88
gt_ wrote: post #85

Earlier quoted context omitted.

OK. Maybe i am assuming there have been no new Tether tokens because the “granter” decided not to grant anymore, but it has actually been a market response? I am wondering... if they can grant new tokens, why havent they? Lack of demand?

Maybe market response, maybe due to increase focus from people on the "granter" account. It can be n-number of things.

I understand. Thanks. I was assuming things!

Re: What's Happening with Bitcoin Prices

#90

Post by gt_ »

59nadir wrote: post #86
gt_ wrote: post #78

Earlier quoted context omitted.

OK. Thanks for clarifying. You mean to say it’s not smart investing . You are judging intelligence based on purely selfish outcomes. I understand now.

Intelligent people can be stupid investors. I'm not judging anyone's intelligence at all. An investment made with no sound rationale by a Nobel prize winner is effectively dumb money.

I am suggesting there are some rationales for investing in cryptocurrency besides investor profit. I am not arguing for their popularity, but that they do exist. They seem to ascribe different value systems that you might not be considering. In the current market situation, they are probably fairly irrelevant or undermined, but maybe not so in past terms.
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