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Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

nytimes.com

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Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#81

Post by 3pt14159 »

bhouston wrote: post #67
cstejerean wrote: post #55

Earlier quoted context omitted.

Which evidence? Because around December when they were printing about a billion dollars worth of tether there was zero evidence it was backed by anything other than wishful thinking. Maybe that’s changed?

My theory is that it was initially not backed fully but after the fact it became backed. A billion or two dollars is not that much money to eventually get, especially if you also hold a lot of valuable BTC as a result of this manipulation. Basically the unbacked tether allowed them to purchase BTC and with the great price increases that become worth way more than the unbacked tether allowing them to leverage that to…

1. What proof do you have?

2. Even if this was their play from the beginning and they've actually pulled it off (I'm doubtful) why should we trust that they won't hit us with some other scam some point in the future?

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#82

Post by compcoffee »

lallysingh wrote: post #14
ejstronge wrote: post #4

Could we change the title to that of the article, "Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say"? It currently implies that the New York Times did independent research ("NYT and UT Austin: Bitcoin Prices Manipulated by Tether and Bitfinex") which does not seem to be the case. I think this is a subtle point but, with the tension surrounding 'fake news', it's critical to distinguish reporting on…

Do people take the 'fake news' claims seriously? Even here in HN?

>Do people take the 'fake news' claims seriously?

"Fake news" is now an argument against anything you disagree with. Trump pioneered the strategy, but now even Elon Musk is doing it.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#83

Post by jandrese »

craigc wrote: post #78
jandrese wrote: post #61

Earlier quoted context omitted.

Shouldn't it be incumbent on them to prove that they are backed by USD and not on me to disprove it? They are the ones making the extraordinary claim here. Given the little we do know about the company the most reasonable assumption is that it is a slightly reworked Ponzi scheme.

What makes the claim extraordinary? If I wanted to make an easily tradable form of USD on the blockchain, I would take a similar approach. Take deposits in US Dollars and issue an equal number of “dollar backed coins” on the blockchain that can then be sent around from exchange to exchange. Nothing about that seems extraordinary to me. It is very likely the federal reserve is going to do something very similar in the…

The extraordinary claim that people pumped billions of real US dollars into an upstart exchange with no proper accounting.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#84

Post by vkou »

gowld wrote: post #62
kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "of these two explanations— 1) Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or 2) Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to…

What's the difference between a real dollar and a fake dollar? All dollars are first-order fake.

Once Tether gets audited, indicted, etc, you'll be able to pay taxes with one, but you won't even be able to use the other as toilet paper.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#85

Post by compcoffee »

Consultant32452 wrote: post #68
ceejayoz wrote: post #34

Earlier quoted context omitted.

Real central banks regularly raise interest rates to prevent over-inflation of asset prices.

I think banks have an equal and opposite position. Our debts are their assets. Inflation reduces the value of their assets.

>Our debts are their assets. Inflation reduces the value of their assets.

And our assets are their debts.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#86

Post by bhouston »

3pt14159 wrote: post #81
bhouston wrote: post #67

Earlier quoted context omitted.

My theory is that it was initially not backed fully but after the fact it became backed. A billion or two dollars is not that much money to eventually get, especially if you also hold a lot of valuable BTC as a result of this manipulation. Basically the unbacked tether allowed them to purchase BTC and with the great price increases that become worth way more than the unbacked tether allowing them to leverage that to…

1. What proof do you have? 2. Even if this was their play from the beginning and they've actually pulled it off (I'm doubtful) why should we trust that they won't hit us with some other scam some point in the future?

Answers:

1. I have no proof, it is "my theory." 2. I wouldn't trust them in any way.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#87

Post by TeMPOraL »

spiorf wrote: post #79
Donzo wrote: post #74

Earlier quoted context omitted.

Real US Dollars have a very large arsenal with unimaginable destructive powers propping up their value. The dollars may be fake but the man with the gun who is standing behind them is very real.

This is the internet, and those weapons can't fire down here. Try, instead, to delete a two week old transaction from the bitcoin blockchain. You will find that even with military-sized funding, you can't. That's what is backing up bitcoin's value

You do not live on the Internet, you live in physical reality. Very much in reach of the police. Or a cruise missile.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#88

Post by mannykannot »

gowld wrote: post #62
kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "of these two explanations— 1) Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or 2) Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to…

What's the difference between a real dollar and a fake dollar? All dollars are first-order fake.

To paraphrase Woody Allen, as fakes go, it's one of the best.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#89

Post by billions »

rayuela wrote: post #76
paulpauper wrote: post #73

It's worth noting, SSRN is not peer reviewed, but the NYTimes by omitting this important fact, one can mistake this paper for having the same credibility and soundness as a peer-reviewed paper. Anyone can submit to SSRN. The editorial standards are almost non-existent.

Yeah it's like you omitting the fact that it was published by two reputable finance professors who's research specializes in financial market manipulation.

Are you saying they are biased because they see the world through the lens of their studies?

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#90

Post by craigc »

jandrese wrote: post #83
craigc wrote: post #78

Earlier quoted context omitted.

What makes the claim extraordinary? If I wanted to make an easily tradable form of USD on the blockchain, I would take a similar approach. Take deposits in US Dollars and issue an equal number of “dollar backed coins” on the blockchain that can then be sent around from exchange to exchange. Nothing about that seems extraordinary to me. It is very likely the federal reserve is going to do something very similar in the…

The extraordinary claim that people pumped billions of real US dollars into an upstart exchange with no proper accounting.

Ahhhh. Okay that makes more sense. Although at the time they did have accounting and audits. The last audit was September 2017, I believe.
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