Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Number go down: the single trade that crashed Bitcoin

davidgerard.co.uk

Post reply on HN
Print view View original

21–30 of 36 posts

Re: Number go down: the single trade that crashed Bitcoin

#21

Post by topmonk »

vivekd wrote: post #17

These fluctuations have been a part of Bitcoin for a few years now. And while most people think it's no big deal I think it's absolutely fatal. It's fatal because bitcoin isn't supposed to be some kind of stock that you buy, sell and speculate on. It's supposed to be a currency and that's where it's supposed to get its value from. Unfortunately that's not how it's being used because unfortunately it's not a very good…

Do you think it would be possible to end up with two coexisting widely used currencies?

One currency like you say, traceable and hard to manipulate and another that preserves the anonymity that bitcoin provides but with a lot more fluctuation in the price? (Not to say that bitcoin is untraceable, but rather, suppose a currency with the same ideals of anonymity the creators held when they created Bitcoin)

Re: Number go down: the single trade that crashed Bitcoin

#22

Post by zwerdlds »

AznHisoka wrote: post #11

“The crypto blogs put forward all sorts of bad reasons — it’s capital flight from China! It’s Bakkt offering Bitcoin futures! It’s Flexa offering retail payments in crypto! It’s Microsoft experimenting with the blockchain! — even though this was really obviously a manipulated push like so many before.“ All reasons for the price to rise or drop are obvious in hindsight. I like to see pundits make these predictions bef…

pundits have been pointing to market manipulation for a while

Re: Number go down: the single trade that crashed Bitcoin

#23

Post by mrb »

zaroth wrote: post #7

Actually I’m kinda impressed someone put a market order to sell $30 million Bitcoin and the book filled it then and there. Yeah it moved the price. That’s a pretty big trade for BTC. Would BTC have cleared $30 million in actual trading volume a few years ago? Now the fun part, good luck getting the cash out of the exchange!

«Now the fun part, good luck getting the cash out of the exchange!»

Err... There are traders easily withdrawing tens of millions of USD every single week on Bitstamp. Bitstamp isn't MtGox.

Re: Number go down: the single trade that crashed Bitcoin

#24

Post by davidgerard »

logicchains wrote: post #19
village-idiot wrote: post #6

Earlier quoted context omitted.

The nominal market cap of BTC right now is about $129 billion. A $40m trade represents about 0.03% of the reported market cap. That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. Also, the slow speed of price propagation isn’t a sign that the market is thick, it’s a sign that the market is inefficient.

>That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. It was only the market on a single exchange, Bitstamp, which is extremelly illiquid compared to the largest exchanges. The problem was that Bitmex, a much more liquid exchange, bases the settlement price of its popular perpetual Bitcoin swap on an index of just two exchanges, Bitstamp and…

Coinbase's isn't much deeper.

The real problem is that the exchanges all have separate order books, and it's hard to arbitrage between them.

This is a recipe for volatility.

Re: Number go down: the single trade that crashed Bitcoin

#25

Post by davidgerard »

AznHisoka wrote: post #11

“The crypto blogs put forward all sorts of bad reasons — it’s capital flight from China! It’s Bakkt offering Bitcoin futures! It’s Flexa offering retail payments in crypto! It’s Microsoft experimenting with the blockchain! — even though this was really obviously a manipulated push like so many before.“ All reasons for the price to rise or drop are obvious in hindsight. I like to see pundits make these predictions bef…

I have been saying this is how it works for a while, so I claim my "I told you so".

> Better yet, buy

you wish

> or short sell BTC

Shorting you can trust turns out to be something Bitcoin doesn't have yet.

Re: Number go down: the single trade that crashed Bitcoin

#28

Post by antonvs »

bigiain wrote: post #14
antonvs wrote: post #5

Earlier quoted context omitted.

I'm not sure "thin" is the right word here. It took something like 20 minutes for someone to dump nearly $40 million worth of Bitcoin, and after the dust had settled, the price had dropped less than 12%. There are many other factors that lead to this sort of thing happening with Bitcoin, including the lack of regulatory oversight you mention.

Maybe. Remember it takes "something like 20 minutes" for _any_ bitcoin transaction to get two confirmations. That's kinda "the speed of light limit" for any transaction in bitcoin, whether it's 1 satoshi, or $40mil... (I don't know if this $40Mil "dump" was one transaction or a significant portion of the ~4000 you can fit into one block, if it was in a series of transactions averaging less than $10k, if couldn't have…

Someone else mentioned it, but just to reiterate - these aren't transactions on the blockchain, they're trades on an exchange. They happen essentially instantly, because all that's happening is the exchange is updating its internal customer account balances. The only time this hits the blockchain is when someone withdraws Bitcoin from the exchange.

Re: Number go down: the single trade that crashed Bitcoin

#29

Post by antonvs »

village-idiot wrote: post #6
antonvs wrote: post #5

Earlier quoted context omitted.

I'm not sure "thin" is the right word here. It took something like 20 minutes for someone to dump nearly $40 million worth of Bitcoin, and after the dust had settled, the price had dropped less than 12%. There are many other factors that lead to this sort of thing happening with Bitcoin, including the lack of regulatory oversight you mention.

The nominal market cap of BTC right now is about $129 billion. A $40m trade represents about 0.03% of the reported market cap. That a trade that small would cause the market to crash by double digit percentage points is absolutely a sign of a thin market. Also, the slow speed of price propagation isn’t a sign that the market is thick, it’s a sign that the market is inefficient.

That's not a relevant percentage. You'd need to look at the amount of Bitcoin that trades regularly.

Also, I wasn't saying anything about slow speeds. I was saying that the ability of the market, on a single smaller exchange, to absorb a $40 million trade in 20 minutes is not traditionally what you'd call a thin market.

Re: Number go down: the single trade that crashed Bitcoin

#30

Post by jacques_chester »

vivekd wrote: post #17

These fluctuations have been a part of Bitcoin for a few years now. And while most people think it's no big deal I think it's absolutely fatal. It's fatal because bitcoin isn't supposed to be some kind of stock that you buy, sell and speculate on. It's supposed to be a currency and that's where it's supposed to get its value from. Unfortunately that's not how it's being used because unfortunately it's not a very good…

> Have rules and tracking mechanisms in place to prevent manipulation of the money supply. And most importantly a widespread currency can't have anonymity. I'm not saying anonymity shouldn't be allowed in a currency. But widespread use of a currency requires being able to manually undo transactions that were done through fraud, the way banks and credit card companies can. This is why people tend to avoid making large payments in cash, they want a paper trail so it can be undone if necessary.

Regular money has basically all these features, plus the advantage of enormous institutional support (laws, systems, finance sectors, central banks, markets...)

Post reply on HN