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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

#201

Post by joejerryronnie »

kgwgk wrote: post #162
Bucephalus355 wrote: post #134

Earlier quoted context omitted.

Whenever some kind of good has a truly limited supply, that can fuel the most massive of bubbles by making the “bubble” look rational at first. The bubble hides itself under the guise of being about “supply and demand”. The one thing that leaps to mind is the Japanese real estate speculation in the 1980’s. Everyone claimed, very logically, that Japan is a mountainous island with very limited space, so real estate wou…

It was said at the time that the Imperial Palace was worth more than all the real estate in California. https://amaral.northwestern.edu/blog/how-much-was-japanese-i...

They should have sold the Imperial Palace and bought California

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

#202

Post by mythrwy »

Every time a bubble pops it seems people look for someone to blame that isn't the themselves, (i.e the people who rushed out and put more than they could afford to lose on a risky FOMO decision). I don't know about Tethers involvement, but that is what makes a bubble at the end of the day, not sure how much "manipulation" is needed once it gets started.

Expecting these types of articles will sell pretty well in coming weeks/months as people nursing their wounds look for the "people responsible".

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

#204

Post by joejerryronnie »

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

If the world's financial stability is at risk due to crypto-currency, you will see how easy it is for the government to effectively shut down the internet. What good is the bitcoin blockchain when all ISPs have been locked down and the only internet traffic is going directly through military run equipment?

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

#205

Post by SilasX »

Retric wrote: post #105
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…

Fraud seems to be easier than you might think. For comparison Bitcoin is about the size Madoff was dealing with. Bitcoin is still loose change in terms of the global economy.

Yeah, I would think that legit value creation is the harder problem.

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

#206

Post by ericb »

jrkatz wrote: post #182
ericb wrote: post #168

Earlier quoted context omitted.

No no, if you can acquire a $6,000 bitcoin for $0 and sell it, your scam has a 100% margin. It is still profitable whenever you can run the scam, at whatever price above $0.

Right, but if they acquire $6000 for 20000 tether (that they paid $0 for), and promise that tether is full redeemable for $20000, they are $14000 short when the tether holder comes knocking.

So long as the printing press keeps running, the solution is to print yourself another 14000 in tether, convert to BTC and sell the BTC for 14000 in real USD.

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

#207

Post by andrewla »

456hdsaq234g wrote: post #187
ufo wrote: post #177

Earlier quoted context omitted.

One problem with the market price for tethers is that it is actually very hard to sell them for USD. For example, Bitfinex does not allow USD withdrawals, only Bitcoin withdrawals.

not too hard. kraken and bittrex both do USD/USDT pairs (which, at 1.0 is a good metric of USDT health)

True for Kraken (although their USD withdrawal policies are very restrictive, so not a huge improvement over getting your money from Bitfinex).

Bittrex has a public pair between Tether and "True USD" [1], but their fiat USD market is not yet available to the public, and I don't know where we can find pricing data for the non-public market.

[1] https://bittrex.com/Market/Index?MarketName=USDT-TUSD

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

#208

Post by FireBeyond »

Animats wrote: post #173
FireBeyond wrote: post #128

Earlier quoted context omitted.

And right beneath that, "Our reserve account is regularly audited". By whom? Where can anyone see these audits, for transparency's sake?

Tether fired their auditor for asking too many questions.[1] [1] https://www.coindesk.com/tether-confirms-relationship-audito...

Tether fired their auditor for _wanting to conduct an audit_, and not being willing to "rubber stamp these bank statements for us and call it good".

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

#209

Post by nishantvyas »

jaredklewis wrote: post #169
sbov wrote: post #149

Earlier quoted context omitted.

> Curiously, at the height of the housing crisis homes were about 5.5 times the median national income. In San Francisco right now (another place where supply looks limited by the water) homes there are 17.2 times the median national income. You're comparing national home prices in Japan vs national income in Japan. Then you're comparing local prices in SF to national income in the USA. You're then comparing these co…

In 2016, it seems SF median household income was $96,677 [1] and that the median house price was $1.31 million [2]. Couldn't find more recent number for income. That a 13.6 median price to income ratio. 2018 median house price is $1.61 million, so for wages to keep up the 2018 median income would need to be $118,382 to maintain the 13.6 ratio. Edit: I agree with parent it probably still doesn't make sense to compare…

You also have to account the rise in population, which translates to higher demand. Not sure Japan had similar Demand/Supply to SF before bust.

The average annual gain in SF since 2010 came to 11,173 persons, and the median is 10,824. The overall population increase of 78,593 amounts to an estimated spike of more than 9.75 percent. For comparison, that’s a higher year-over-year increase than seven of the ten most populous counties in the country, including number-one ranked Los Angeles County (up 0.1 percent since 2016), Orange County (0.4 percent), and San Diego County (0.6 percent).

Breakdown of how the city has grown since the last full census in 2010, with SF’s official population of 805,770 at the time:

2011: +10,524 (816,294) 2012: +14,112 (830,406) 2013: +10,486 (841,270) 2014: +11,988 (853,258) 2015: +13,062 (866,320) 2016: +9,783 (876,103) 2017: +8,260 (884,363)

1. https://sf.curbed.com/2018/3/26/17165370/san-francisco-popul...

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

#210

Post by joe_the_user »

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…

Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation.

Creating money by printing is not a new thing. Making people believe that the money you've created with whatever hocus-pocus is real and that investment X will just spew money indefinitely is not at all a new thing. It is one very standard old thing.

That by itself doesn't prove bitcoin is this. But in analyzing investment that's rocketing up in value, one should remember that what Hyman Minsky called "speculative finance", ie, bubbles, should not be excluded or treated as "something really weird". "Are X many people really that foolish?" Well, how often has this happened before? There is an answer to that question.

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