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Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

davidgerard.co.uk

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Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#111

Post by [deleted] »

dredmorbius wrote: post #103
alasdair_ wrote: post #65

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…

No, it's the fact that the trading in Bitcoin is so thin. A modestly-large trade can completely swamp the markets. The NYSE sees on the order of a billion trades per day. The high over the past year is about 1.9, the low about 0.46. The dollar trade was $16 - $107 billion/day. I'm not finding transactional volume for bitcoin, but the dollar vollume has peaked at $2.5 billion, and until September, 2017, was under $500…

[deleted]

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#112

Post by 6nf »

davidgerard wrote: post #15

(author here) I originally submitted this with just the second part of the title, 'cos Part 1 doesn't deliver on "why you can't cash out". I expect two or three more parts, that answer the question: KYC/AML, oddly-convenient ineptitude, and hoo boy Tethers.

This article is completely overblown and full of made up nonsense. It's super easy to sell BTC and on a decent exchange like GDAX you can sell a million dollars via market order right now with less than $100 slippage. That's 0.5%. They will then send it to your bank account in 24 hours no problem whatsoever. I don't know where you are seeing a 5% spread but certainly not on the major exchanges. Spoofing and all that nonsense doesn't prevent anyone from selling at a decent price, I know this for a fact cause I've done it multiple times in the last few weeks.

You should buy and sell some BTC on a big exchange before you make these nonsense claims.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#113

Post by [deleted] »

icc97 wrote: post #45
scott00 wrote: post #40

Earlier quoted context omitted.

Crypto market cap doesn't mean the same thing as the market cap of a stock, but that doesn't mean it's meaningless. It approximates the total amount of wealth currently held in the form of a particular crypto, which is interesting to know in comparison to more traditional asset classes (stocks, bonds, gold, etc) as well as to other cryptos. If you also have some knowledge or an assumption about the velocity of money…

'approximate' is the key word as it's averaged over exchanges which is a big difference to standard market prices, as mentioned in the article: > Quoting a number like “$19699.46” to seven significant figures when your data’s got a 5% spread would get your high school physics teacher slapping you upside the head. It’s entirely deceptive. It should say something like “$19,700 plus or minus $500 depending,” and that li…

[deleted]

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#114

Post by 6nf »

cobookman wrote: post #97
rlpb wrote: post #23

> The delays — ten minutes to over an hour — and fees add enough friction to generate the spread between exchanges, even if you assume everyone’s using trading bots as quickly as possible. Can an arbitrager not simply hold both BTC and cash on multiple exchanges at once? When a price difference swings one way, sell on one exchange and buy on the other, without worrying about transferring anything between exchanges. W…

You can however gdax limits you to 10k/day of withdrawls from the exchange (be it usd or btc). And gdax has a 3-6 day wire transfer delay. You end up making more by simply hodling

> gdax limits you to 10k/day of withdrawls from the exchange (be it usd or btc).

That's just the default limit. You can ask for increases.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#115

Post by masonium »

tehlike wrote: post #31
nerdponx wrote: post #9

Fortunately, USD balances on GDAX are FDIC insured for US citizens [0]. I accept that I might not be able to cash out of cryptos in an emergency, due to liquidity or transaction times or something else, but I sure as hell will be able to get out any USD I might have in GDAX, which is a big confidence boost to me. They claim that all crypto deposits are "fully insured" as well, by a "syndicate of insurers through Lloy…

Black-swan events sounds less rare in digital world. I am also doubting if FDIC insurance is for the full amount, or the 250K that's often cited for banks.

"For US customers, your USD balance is covered by FDIC insurance, up to a maximum of $250,000."

You literally didn't even bother to click on the one link in that comment.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#116

Post by josephagoss »

davidgerard wrote: post #15

(author here) I originally submitted this with just the second part of the title, 'cos Part 1 doesn't deliver on "why you can't cash out". I expect two or three more parts, that answer the question: KYC/AML, oddly-convenient ineptitude, and hoo boy Tethers.

Tethers are total crap, please do an article about them.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#117

Post by sowbug »

dredmorbius wrote: post #103
alasdair_ wrote: post #65

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…

No, it's the fact that the trading in Bitcoin is so thin. A modestly-large trade can completely swamp the markets. The NYSE sees on the order of a billion trades per day. The high over the past year is about 1.9, the low about 0.46. The dollar trade was $16 - $107 billion/day. I'm not finding transactional volume for bitcoin, but the dollar vollume has peaked at $2.5 billion, and until September, 2017, was under $500…

24-hour trading volume for Bitcoin is $4.86 billion (https://www.coingecko.com/en/coins/bitcoin).

Most active NYSE stock last Friday was Bank of America, trading about $3.1 billion (http://www.wsj.com/mdc/public/page/2_3021-activnyse-actives....).

I don't understand why you'd compare a single security's trading volume to an entire stock exchange's volume. It is not a meaningful comparison.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#118

Post by nerdponx »

canoebuilder wrote: post #93
nerdponx wrote: post #9

Fortunately, USD balances on GDAX are FDIC insured for US citizens [0]. I accept that I might not be able to cash out of cryptos in an emergency, due to liquidity or transaction times or something else, but I sure as hell will be able to get out any USD I might have in GDAX, which is a big confidence boost to me. They claim that all crypto deposits are "fully insured" as well, by a "syndicate of insurers through Lloy…

Can we all take a moment to appreciate the irony here? You're enthused about dealing with cryptocurrencies for reasons of being insured by a centralized , third-party , who you've placed your trust in.

It's ironic, but I don't feel too bad about it.

1. For all of the things we mistrust the US government for, the FDIC is, as far as anyone can tell, rock-solid. If, by some catastrophe, the FDIC were no longer able to ensure deposits, we would likely all have much bigger problems than trying to get your cash out of GDAX.

2. It spreads risk. GDAX itself is a centralized authority. Instead of putting all my trust in one entity, I now only need one of GDAX or the SEC or the FDIC to be functional.

3. It brings legitimacy. For better or worse, your average person is not a crypto cyber hippie, and neither are executives at most traditional companies. If we are to start seeing crypto currency actually become useful as currency in the USA, rather than just the speculation instrument, we need adoption by both average people and business executives. When they see that one of the top exchanges is based in the USA, and is fully certified and regulated by the US government, it ought to help allay some fears about the safety and usefulness of digital currency.

4. Some things I don't trust the US government for any further than I can throw it. Other things, I trust it pretty thoroughly. This falls in the latter category.

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#119

Post by jcranmer »

dredmorbius wrote: post #103
alasdair_ wrote: post #65

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…

No, it's the fact that the trading in Bitcoin is so thin. A modestly-large trade can completely swamp the markets. The NYSE sees on the order of a billion trades per day. The high over the past year is about 1.9, the low about 0.46. The dollar trade was $16 - $107 billion/day. I'm not finding transactional volume for bitcoin, but the dollar vollume has peaked at $2.5 billion, and until September, 2017, was under $500…

> Before that date, roughly, more money moves through one stock exchange in a single day than all of Bitcoin in a year.

Calling the NYSE "just" one stock exchange isn't exactly a fair comparison. The NYSE is somewhere in the region of 20% of the total stock exchanges by market cap. It's twice the size of the next-largest stock exchange (NASDAQ), which is itself about twice as large as a "normal" large stock exchange (e.g., London or Tokyo).

Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

#120

Post by nerdponx »

cdoxsey wrote: post #53
twelve40 wrote: post #17

Earlier quoted context omitted.

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…

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…

What about forex trading?
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