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Novogratz's Crypto Trading Desk Lost $136M in Nine Months

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Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#41

Post by apo »

kilo_bravo_3 wrote: post #13

I like how cryptocurrencies were launched as an alternative to central banking, wresting control of money away from the government and big banks. An open and level playing field that would democratize how people transact financially with each other. And then the first thing the early adopters did was recreate the flawed financial institutions that surround "real" money so that they could pretend to be Gordon Gekko an…

Is there data on what percentage of cryptocurrency transactions are "Real, actual, humans buying and selling real, actual, things or compensating each other for their ideas and thoughts" and what percentage consists of "traders shouting at each other in the echo chamber"?

Exchanges use off-chain transactions. When you see a transaction on the block chain, it's very unlikely to be a settlement between two exchange customers because it's far more efficient for the exchange to settle on its own private ledger.

On-chain Bitcoin transactions incur fees. Aside from a group launching an attack on Bitcoin, there's little return for the cost of spamming the block chain.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#42

Post by apo »

Filligree wrote: post #18
kilo_bravo_3 wrote: post #13

I like how cryptocurrencies were launched as an alternative to central banking, wresting control of money away from the government and big banks. An open and level playing field that would democratize how people transact financially with each other. And then the first thing the early adopters did was recreate the flawed financial institutions that surround "real" money so that they could pretend to be Gordon Gekko an…

All you have to do is look at the buy/sell curves. Crypto is 80% market manipulation, 19% traders and maybe 1% genuine use.

Assuming you mean order book (=buy/sell curve), how do you arrive at 80% market manipulation numerically?

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#43

Post by [deleted] »

bhaak wrote: post #25
lordnacho wrote: post #12

The article is missing some critical details. What does the fund do? The article suggests they do arbitrage. Those opportunities actually tend to increase when things are volatile. Also while you can lose money doing it you wouldn't expect a precipitous collapse in NAV. If you discover you're slower than everyone else you can shut down. Volumes aren't necessarily correlated to price either, so that isn't entirely con…

This interview[1] sounds like they called bottom at 6k and then the floor fell out: "We thought it was a bear market. I went into it thinking in the long run crypto is going to be a real structural shift in the world and I can just hedge my portfolio. And to be fair, we did a really great job not losing money the first 60 percent down. What you forget is that a market like Bitcoin that’s down 84 percent has dropped 6…

[deleted]

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#44

Post by apo »

village-idiot wrote: post #37
apo wrote: post #36

Earlier quoted context omitted.

Lightning is never going to happen. It's happening right now: https://bitcoinmagazine.com/articles/progress-report-lightni...

For something that’s supposed to compete with Visa, $1m isn’t exactly “happening”. Edit: supposedly there is $62 billion worth of BTC sloshing around out there. If you take that number at face value, then close to .0016% of BTC has been committed to the lightning network. This is not “happening” by any stretch of the imagination.

You're right in that VISA volume will dwarf Lightning Network volume for a long time.

However, you made the provably false statement that Lightning "wasn't happening." That train has left the station, leaving a surprisingly large crowd on the platform yelling at passersby that it will never happen.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#45

Post by wpietri »

AznHisoka wrote: post #9
simias wrote: post #3

I mean, given how hard cryptocurrencies crashed this year is it really a surprise? The only way for him to make money would probably have been to short everything continuously but seeing how irrational and easily manipulated the cryptocurrency market has been in the past that seems rather foolish. Given his pedigree you'd think he'd know better than to bet on something that's 99% pure unbridled speculation and 1% act…

One of the best kept secrets in the hedge fund/financial industry is that most people really dont have a clue what they are doing. Sure they make bold predictions, appear on CNBC and use industry jargon. But at the end of the day, they arent much better than you or me at managing large amounts of money.

An opinion shared by Warren Buffett. He bet a hedge fund guy $1m that an index fund would beat a portfolio of hedge funds. Buffett won handily: http://longbets.org/362/

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#46

Post by robk »

paulie_a wrote: post #33
AznHisoka wrote: post #9

Earlier quoted context omitted.

One of the best kept secrets in the hedge fund/financial industry is that most people really dont have a clue what they are doing. Sure they make bold predictions, appear on CNBC and use industry jargon. But at the end of the day, they arent much better than you or me at managing large amounts of money.

It's always sad when I get my upwards of 10 percent by professionals. I personally get 500-1000 percent return year over year. I'm working with small amounts of money that if I lost entirely wouldn't be the end of the world. But some years they barely beat inflation.

How??

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#47

Post by wpietri »

dragontamer wrote: post #39
misiti3780 wrote: post #16

Earlier quoted context omitted.

to back this up, read the expose in the economist this week about family offices and how they all divesting from hedgefunds because the fees are ridiculous and they are doing no better than the S&P, usually worse when you take into account the onerous fees those mgrs are charging.

To be fair, when you have $100 Million, the goal of the game is not "growth", but holding onto that money. $100 million isn't much different from $108 Million (8% gains over the year)... or even $500 Million. In both cases, its still more than enough money to live on for the rest of your life. The S&P 500 has dropped 50% in the past (ie: 2008), and it doesn't make sense to risk that much money on that. You can't use…

> To be fair, when you have $100 Million, the goal of the game is not "growth", but holding onto that money.

What's your evidence for that? Sure, they don't want to lose, but nobody does. And if anybody likes to get richer, it is pretty clearly rich people. Even the charity-focused ones want to keep increasing their resources, as that lets them have more impact.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#48

Post by wpietri »

robk wrote: post #46
paulie_a wrote: post #33

Earlier quoted context omitted.

It's always sad when I get my upwards of 10 percent by professionals. I personally get 500-1000 percent return year over year. I'm working with small amounts of money that if I lost entirely wouldn't be the end of the world. But some years they barely beat inflation.

How??

You think he'll tell you for free? Nah. To learn the amazing secret to claiming to make a lot of money, you have to send him a lot of money. There are rules.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#49

Post by village-idiot »

apo wrote: post #44
village-idiot wrote: post #37

Earlier quoted context omitted.

For something that’s supposed to compete with Visa, $1m isn’t exactly “happening”. Edit: supposedly there is $62 billion worth of BTC sloshing around out there. If you take that number at face value, then close to .0016% of BTC has been committed to the lightning network. This is not “happening” by any stretch of the imagination.

You're right in that VISA volume will dwarf Lightning Network volume for a long time. However, you made the provably false statement that Lightning "wasn't happening." That train has left the station, leaving a surprisingly large crowd on the platform yelling at passersby that it will never happen.

Different definitions of "won't happen".

You're asserting that it can be turned on and it contains money. You're correct that indeed, there are some nodes containing some money.

I am asserting that the network will never be a functional way for large chunks of the population to move money around, because it is a bad design built on top of a bad currency. Under my definition, the fact that a few people interested in it have moved an infinitesimal amount of money around is mildly fascinating, but not of particular note one way or another.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#50

Post by dragontamer »

wpietri wrote: post #47
dragontamer wrote: post #39

Earlier quoted context omitted.

To be fair, when you have $100 Million, the goal of the game is not "growth", but holding onto that money. $100 million isn't much different from $108 Million (8% gains over the year)... or even $500 Million. In both cases, its still more than enough money to live on for the rest of your life. The S&P 500 has dropped 50% in the past (ie: 2008), and it doesn't make sense to risk that much money on that. You can't use…

> To be fair, when you have $100 Million, the goal of the game is not "growth", but holding onto that money. What's your evidence for that? Sure, they don't want to lose, but nobody does. And if anybody likes to get richer, it is pretty clearly rich people. Even the charity-focused ones want to keep increasing their resources, as that lets them have more impact.

> What's your evidence for that?

The worldwide bond / debt market exceeds $100 Trillion. While the worldwide stock market is only $69 Trillion (sum of top 60 exchanges)

https://www.visualcapitalist.com/all-of-the-worlds-stock-exc...

It is clear that Bonds are more popular than Stocks, by a factor of ~50% or so. The rich are buying up debt in far greater numbers than stocks. And EVERYONE knows that Bonds make less money.

I know some of it is cultural. My Chinese friends tend to own real-estate. But it seems like around the world, all major investors favor the lower-risks of Bond investing compared to Stocks.

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