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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

#251

Post by davidgerard »

empath75 wrote: post #191
bufferoverflow wrote: post #125

This article is pure FUD with lies. 1) The spread is not "plus or minus $500", it's a lot less. See for yourself: http://bitcoinity.org/markets/bitstamp/USD At this particular moment the spread is $23 on Bitstamp, zero on GDAX, $11 on Bitfinex, zero on Kraken, zero on it it (where "zero" is something under a dollar, there's not enough precision to display it). 2) Yes, you can cash out, a lot. There are dozens of huge…

You can’t get dollars out of bitfinex.

I had a commenter on the original post claiming he'd gotten millions of dollars out of Bitfinex two months ago! I pointed out this was actually news, and asked who the sending bank was.

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

#252

Post by davidgerard »

DennisP wrote: post #173
kensey wrote: post #137

Earlier quoted context omitted.

How recently is “recently”? It seems (to me as an outside observer) that it’s gotten notably harder to get national-currency money out of exchanges in the last, say, 6 months, because (I’m guessing) as the price goes on an upward run, more people who bought low are trying to sell to realize those gains, which triggers higher transaction volume, which suddenly prompts correspondent banks to look at exactly what all th…

I resigned about a month ago. Coinbase and Gemini, for example, are U.S. exchanges that strictly follow money transmission regulations and AML/KYC. They're not likely to have banking problems, at least under the current regime. If you go with a sketchy foreign exchange so you can stay anonymous, you're more likely to run into problems.

Yep. In fact, Gemini's value proposition is that it's as rules-following and upright as a crypto exchange can be - they want to market to serious money who aren't interested in cowboy exchanges.

Unfortunately, this has left them with much lower volumes than the more cowboy exchanges ...

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

#254

Post by paulryanrogers »

coldtea wrote: post #146
g09980 wrote: post #131

Earlier quoted context omitted.

But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Instead, the article seems like FUD that would confuse non-tech users into thinking they couldn't cash out their 0.5 BTC at the price they're seeing on their exchange (they can.)

> But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Yes. But if one thinks Bitcoin, with its distribution of holders, price volatility, and "quality" of trading implementations etc has the same tolerances as the regular stock market (which indeed can crash too), one is beyond deluded. It's l…

Did you mean Hummer?

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

#255

Post by victor106 »

arcticfox wrote: post #22
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…

But the stock market - in general - has ridiculously profitable and powerful entities behind it. No matter what happens to investor confidence, ownership of Apple is going to be very valuable because they generate a ridiculous amount of profit. Cryptos, on the other hand, are entirely based on investor confidence.

Cryptos imho are equal to gold not stocks

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

#256

Post by rgoldade »

JumpCrisscross wrote: post #208
rgoldade wrote: post #61

Earlier quoted context omitted.

Of course.. if you could take a short position against the coin, you could hedge and eliminate your risk.

> if you could take a short position against the coin How can you short it? CBOE futures only exist for one exchange. What if that exchange’s price stays steady while others crash? Or that exchange goes up while others crash, thereby triggering margin calls while you lose money? Sure, the situation will eventually rectify itself. In the short term, however, you’re broke.

Margin accounts? It seems like many crypto exchanges offer this. Isn't the example you described the perfect arb situation where you would short sell on the expensive exchange and buy on the cheap exchange?

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

#257

Post by SilasX »

adventured wrote: post #75
smokeyj wrote: post #52

Earlier quoted context omitted.

Is it a solved issue for equities? How do you know the shares you purchased are valid?

It's solved to an extraordinarily high degree. 99.999% or greater. There are fringe cases that pop up from time to time and make headlines; the reason they make headlines, is because trillions of dollars in equities trade hands every year in the US, and such cases are very rare. It's because there's an established system of trust, liability, responsibility, regulation and oversight in the network, assuming you're usi…

IIRC there was the issue with fake shares of Overstock being traded:

http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol...

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

#258

Post by celticninja »

pc86 wrote: post #236
celticninja wrote: post #210

Earlier quoted context omitted.

Exchange A price is $1000 Exchange B price is $1250 Makes sense to buy on A and sell on B for a nice profit. So I buy 3 coins on A and send them to Be, sell on B and have a nice $750 profit. Now you need to get fiat from B to A and this is where you hit your bottleneck.

Assuming you can legally operate on both A and B in your country, isn't it a matter of sending your $3750 from B to your bank then depositing $3750 from your bank to A? Obviously that step alone (fiat B => bank => fiat A => crypto A) could take well over a week before fiat in B is back to crypto in A. I know I'm missing something because a lot of people a lot smarter than me are in this space. I just don't know what…

Not every exchange has perfect withdrawal to fiat methods. Wex.nz doesn't have the facility to move fiat to a bank account. Bitfinex you cannot withdraw USD others only allow EUR withdrawals etc.

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

#259

Post by dredmorbius »

sowbug wrote: post #117
dredmorbius wrote: post #103

Earlier quoted context omitted.

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.

If you wanted a fair comparison, we wouldn't be comparing exchanges at all, but total financial transactions. That is if we're going to treat Bitcoin as a currency and not some sort of asset transfer vehicle.

Visa International handles 300 million transactions/day, and $3 trillion/year.

Or you could look at total US GDP or GWP (gross world product), which are in very rough numbers, $17 trillion and $70 trillion respectively.

Bitcoin at a $5 billion daily trade is 1/8 the US financial transactions market, and roughly 1/40th that of total global trade.

Honestly, that's higher than I'd have expected, but it's also in vastly greater trade blocks than most daily purchases.

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

#260

Post by sowbug »

dredmorbius wrote: post #259
sowbug wrote: post #117

Earlier quoted context omitted.

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.

If you wanted a fair comparison, we wouldn't be comparing exchanges at all, but total financial transactions. That is if we're going to treat Bitcoin as a currency and not some sort of asset transfer vehicle. Visa International handles 300 million transactions/day, and $3 trillion/year. Or you could look at total US GDP or GWP (gross world product), which are in very rough numbers, $17 trillion and $70 trillion respe…

Yeah, I was thinking the same thing after leaving the prior comment. There is exchange-to-other-currency volume (largely BTC as store of value), and then there is exchange-as-money volume (BTC as currency).

In theory you subtract the former from the total transaction volume ($4.6B over last 24 hours according to https://blockchain.info/stats). Unfortunately that gives me a negative number ($4.6B - $5.4B = negative), which at first suggests the methodology is wrong, but then I remember that not all currency-exchange transactions happen on-chain. Send BTC to GDAX, then buy/sell/buy/sell/buy/sell, then receive $$$... all that could be as little as a single blockchain transaction.

I'm sure someone has tried to determine how much of BTC traffic is closed-loop within the BTC ecosystem. I doubt it's much. Anyway, I'm ratholing.

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