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that's plainly false. i'm not sure what exchange he was checking, but spreads for gdax (the biggest exchange) at the moment is 1 cent. https://i.imgur.com/JCQfmkc.png
>If you look at the spreads between exchanges — the different prices for one interchangeable bitcoin — you’ll see spreads of hundreds of dollars, and in volatile moments it can be in the thousands. that's plainly false. i'm not sure what exchange he was checking, but spreads for gdax (the biggest exchange) at the moment is 1 cent. https://i.imgur.com/JCQfmkc.png
By definition, if you have multiple exchanges - your liquidity is already fragmented. In the US Equity Market - you're also not obligated to route to dark pools - only exchanges have order protection. And maybe 30%+ of volume trades on the dark pools.
The bitcoin exchanges do publish market data - so its up to arbitrageurs to step in and bring markets in line. We're still in the early stages - and I expect bitcoin futures and wider adoption of new concepts (like continuous swaps) to alleviate some of the price differences.
Don’t most of the massive cash outs happen off-exchange between two parties agreeing on a price?
The article states "The singular “price” of Bitcoin doesn’t exist — it’s a made-up number." This is the same for every stock traded on any stock exchange in the world. The "singular price" is, in most cases, just the mean of the closest bid and offer listed on the exchange and is thus a "made-up number" On top of this, it obviously doesn't take into account everything from transaction costs to the fact that attempts…
While we do live in an age where stocks seem increasingly untethered from reality, that's still not remotely true.
Stocks are, in theory, based on the value of the company. Which is something you can calculate based on its assets and revenue.
Granted the math doesn't add up for a lot of companies right now, but that's an indication we're in a bubble not an invalidation of the concept of stocks.
The article states "The singular “price” of Bitcoin doesn’t exist — it’s a made-up number." This is the same for every stock traded on any stock exchange in the world. The "singular price" is, in most cases, just the mean of the closest bid and offer listed on the exchange and is thus a "made-up number" On top of this, it obviously doesn't take into account everything from transaction costs to the fact that attempts…
> This is the same for every stock traded on any stock exchange in the world. While we do live in an age where stocks seem increasingly untethered from reality, that's still not remotely true. Stocks are, in theory, based on the value of the company. Which is something you can calculate based on its assets and revenue. Granted the math doesn't add up for a lot of companies right now, but that's an indication we're in…
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(author here) This is targeted to the general public, who do actually need Finance 101, because they really don't know what they're getting lured into by the mindlessly positive articles and headlines in the mainstream press. Mostly written by people who don't understand either. I actually consider it seriously unethical to market cryptos as an investment to retail investors - they just do not understand the insane l…
But at the end of the day, how is it different from the current equities market? (aside from immature tools and imperfect infrastructure that is just shaping up). Stock market can tank 50% like it did in 2009 (together with the real estate market) and your average investor will be screwed just the same. Even tech and fundamental analysis gurus cannot explain the endless bull market we're on, how is getting lured into…
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No it doesn't apply to them. This is a popular argument from libertarians but unfortunately it is a purely ideological argument that has no basis in reality. The aforementioned currencies are backed by the value of their issuer's economies, those economies are real.
@patrick Every American participating in that economy must pay taxes every year on their income. The taxes must be paid in US dollars, even if the economic activity uses a different currency or barter. Therefore Americans must come up with a quantity of USD proportional to the size of the American economy every year (or "go to prison"), and provided that the total amount of USD in existence is bounded (this part is t…
Bitcoins are expensive to produce and if it hangs around very long it will have a long history also. So in the long run bitcoin could be a viable alternative to gold.
What these projects are trying to do and the things they've already achieved is just amazing and really exciting. When you actually use this stuff instead of just HODling it, you realize why it has value.
Should these crytpocurrencies actually cost this much at this point? Would bitcoin be any less useful if it was worth $5 instead of $20k? Probably not and definitely not. These things aren't the sort of assets we're used to. It's not like an equity share of the company that makes the car--it is the car. We need to actually start driving for it to be worth anything in the long term.
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Investing actually achieves something. When I make an investment in a company I'm providing capital that that company can use in various ways. In return I become an (very small) owner of the company. I get a say in how it's run (voting rights), and I get a share of the profit (in dividends). If you hold on to a stock like coca cola for 30 years, never looking at the stock price, and never sell, you'll actually make m…
1. the stock market, other than the IPO is a secondary market. You are not providing capital to the company but just paying another trader for his shares. 2. The majority of stocks do not provide (and will never) dividends and the majority of buyers have no voting rights. but you are right. For practical purposes, the stock market is not pure gambling. There are institutions that make it legitimate. Such as the SEC,…
Similarly, buying and holding Bitcoin has a range of effects that help the network and generate real wealth. Bitcoin is a services company, a payment network, a bank, and investment vehicle, a reflection of wealth in that economy, a notary, a liberated, sound money and a protest - all disguised as a get rich quick scheme.
