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Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

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Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#61

Post by coralreef »

jcoffland wrote: post #51
Scott_Sanderson wrote: post #34

Earlier quoted context omitted.

No one is buying those tethers. Bitfinex is printing them and using them on their own exchange's margin trading market. They use it to wash trade the price up or down as desired. There is some evidence they have been wash trading down to trigger stop loss sell orders and buying the cheap coins. Then they wash trade up and sell.

This is pure speculation.

The relationship between Bitfinex and Tether is real though, executives have positions and board seats in both companies.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#62

Post by askafriend »

zone411 wrote: post #55
empath75 wrote: post #10

You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.

Sorry, but what? What exchange is printing billions of $ of unbacked Bitcoins?

He's right. It's Bitfinex and it's been going on for a while now. A ton of people have called them out and they've largely ignored everyone. They've promised an audit and no audit has materialized in the years since they've promised one.

There's a fantastic anonymous twitter account that's been calling them out for months now and gathering pretty damning evidence: https://twitter.com/Bitfinexed

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#63

Post by jonknee »

jcoffland wrote: post #50
bufferoverflow wrote: post #26

Earlier quoted context omitted.

I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?

Tethers are used on exchanges that don't deal in dollars. Traders who want to sell Bitcoin for USD sell them instead for USDT (Tether). Theses are the people who are buying the newly issued Tether. New Tethers are issued so that USDT stays very close to $1. This works great as long as Bitcoin continues to go up relative to the dollar. If/when Bitcoin goes down significantly theses same exchanges would need to buy up…

> New Tethers are issued so that USDT stays very close to $1.

That's the problem, new Tethers should only be issued when $1 USD is sent to the issuer and deposited in its audited bank account.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#64

Post by jonknee »

bufferoverflow wrote: post #52
Scott_Sanderson wrote: post #34

Earlier quoted context omitted.

No one is buying those tethers. Bitfinex is printing them and using them on their own exchange's margin trading market. They use it to wash trade the price up or down as desired. There is some evidence they have been wash trading down to trigger stop loss sell orders and buying the cheap coins. Then they wash trade up and sell.

That answer doesn't make any sense. Bitfinex is buying bitcoins from itself? Could you please explain in more detail?

People get upset when you print USD, so Bitfinex instead creates USDT out of thin air and then uses it to buy BTC on its exchange. This would be OK if the Tether was actually backed by USD reserves dollar for dollar, but there is zero evidence that this is the case.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#65

Post by zone411 »

askafriend wrote: post #62
zone411 wrote: post #55

Earlier quoted context omitted.

Sorry, but what? What exchange is printing billions of $ of unbacked Bitcoins?

He's right. It's Bitfinex and it's been going on for a while now. A ton of people have called them out and they've largely ignored everyone. They've promised an audit and no audit has materialized in the years since they've promised one. There's a fantastic anonymous twitter account that's been calling them out for months now and gathering pretty damning evidence: https://twitter.com/Bitfinexed

Bitfinex prints Tethers, not Bitcoins.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#66

Post by bufferoverflow »

jonknee wrote: post #64
bufferoverflow wrote: post #52

Earlier quoted context omitted.

That answer doesn't make any sense. Bitfinex is buying bitcoins from itself? Could you please explain in more detail?

People get upset when you print USD, so Bitfinex instead creates USDT out of thin air and then uses it to buy BTC on its exchange. This would be OK if the Tether was actually backed by USD reserves dollar for dollar, but there is zero evidence that this is the case.

I understand that, but my question is why would anyone buy USDTs in such quantities? The total is now close to a billion dollars, as far as I understand.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#67

Post by qbrass »

bufferoverflow wrote: post #26
empath75 wrote: post #10

You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.

I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?

Think of it like casino chips. The house is giving them out instead of money when you win, hoping you'll lose them playing instead of cashing out. That way they only need the money they expect to have to cash out instead of the value of the chips on the floor.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#68

Post by sandworm101 »

cgmg wrote: post #33
sandworm101 wrote: post #14

Earlier quoted context omitted.

Shorting requires two parties. Someone has to loose the bet. If either that person doesn't hang around or the escrow fund disappears mtgox-style, your savvy short position also goes up in smoke. Or maybe, during the crash, the exchange decides to settle up with you by giving you bitcoins. That transfer should only take a few days/weeks during the panic of a real crash. Enjoy the ride. Wall Street is correct in saying…

> That too late thing is coming sooner than later. Not saying it's not coming, but can you estimate the time frame? Otherwise, this statement basically contains zero information.

A month. Bitcoin has in the last few weeks become next to useless as a currency. 30+$ to get a trade executed within an hour is unacceptable. So it isn't currency anymore. It is now just an investment vehicle. Skyrocketing price + no underlying use/value means this looks more and more like a pyramid. When the pure investors start pulling out their profits (a monthly thing) only to find that more difficult than anticipated, the panic selling will start.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#69

Post by jusonchan »

So what do you guys think of this?

I believe all BTC trading spikes are driven by some of the existing owners swapping coins and cash every now and then to keep the trading volume high. It is in their best interest to get the prices bounce back higher whenever it goes down.

Once the price is manipulated higher, they can sell and keep the cash when someone who thought BTC is the next "I-Dont-Know-What-It-Is-But-Its-Going-Higher-Everyday" buys it. Since there are no regulators to protect against market manipulation, it's a fairly easy thing to do 'legally'.

As per GDAX you only need 10s of millions of dollars worth of coins to manipulate and mint money on this. Ordinary folks can't do it, but those who have been holding a few thousand or tens of thousands of coins can easily do this. The bitcoin billionaire brothers for example can do this. Buy every low priced limit order until it hits the price they want and then sell it off based on the frenzy buying on the back of the "always-bouncing-back-safe-harbor-currency".

Rinse and repeat every time price takes a dip.

I hope at some point someone will step into regulate things around bitcoin so that the real market demand will determine its prices. I read an article that people are mortgaging their homes to buy BTC.

If nothing changes, we might be looking at a sequel of the movie "The Big Short"

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#70

Post by bufferoverflow »

qbrass wrote: post #67
bufferoverflow wrote: post #26

Earlier quoted context omitted.

I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?

Think of it like casino chips. The house is giving them out instead of money when you win, hoping you'll lose them playing instead of cashing out. That way they only need the money they expect to have to cash out instead of the value of the chips on the floor.

But you buy casino chips, because you don't have a choice. With crypto you have tons of options, especially on Bitfinex.
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