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Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

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Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#221

Post by dheera »

vkoskiv wrote: post #35

Any exchanges accepting and trading Tether should be considered fraudulent.

They could always base themselves in a jurisdiction where it isn't considered fraudulent, then. The whole point of crypto is de-centralization, de-regulation, and anarchy. Anyone trading crypto should model the world on those assumptions and trade according to human behavior under anarchic conditions, not modeled according to the SEC-regulated world.

Yes, I understand the "problems" with Tether, but it has objectively succeeded in holding up its market price of ~$1 USD for more than a couple years now, so it has functionally served its purpose to its customers needing to make short-term exchanges. To a great degree the fact that the black box's inputs and outputs work is all that really matters, not what's inside the black box.

Might it implode one day? Maybe -- that's life in a financial anarchy. But that should be part of your model. For example, minimizing the time you hold USDT and using it purely as a medium to facilitate other transactions reduces your risk.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#222

Post by fourstar »

sek wrote: post #180

Prediction: Bitcoin will crash together with a general financial crisis / recession. People hold their bitcoin, because they don't know where else to put it right now. With low interest rates everybody is apparently doing well. If the market crashes, some people are worried, or have some assets outside of bitcoin which they have to offset. They will start to dump their bitcoin, but where is lower bound? There are no…

Then open up a short ;)

Keep in mind BTC is deflationary by nature and was the result of the last financial crisis/recession.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#223

Post by loeg »

Animats wrote: post #193
neiman wrote: post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

Tether is starting to look like a Madoff-scale Ponzi scam. What maintains the $1 price of Tether is a continual net inflow of cash. Tether is known not to be backed with sufficient real assets.[1] If there's a period of net outflow from Tether, the whole house of cards comes crashing down. [1] https://www.marketwatch.com/story/tether-reverses-claim-of-1...

Also: https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#224

Post by TremendousJudge »

technofiend wrote: post #57
iagovar wrote: post #2

The more I know about cryptos, the more I remain skeptical. The only people I know that uses cryptos seriously are acquaintancies from latin america, and none of them for storing value, with the exception of Venezuelans. Not even argentinians, that just buy as many dollars they can. IMO this is a thread worth reading on this topic: https://www.reddit.com/r/worldnews/comments/dj2jro/the_large...

>Not even argentinians, that just buy as many dollars they can. A friend from Argentina was lamenting to me that's not very much after new currency controls were imposed through December. https://markets.businessinsider.com/news/stocks/argentina-el... On Monday, the Central Bank of the Republic of Argentina moved to limit the amount of dollars that can be purchased to stanch large outflows of foreign reserves from th…

It's important to note that in Argentina there is a black market for dollars -- You can buy dollars at "blue" price, which is more expensive. This means that the government is subsidizing the difference.

After the primaries, the price of dollars started ballooning and the government (which was clearly set to lose in the national elections), set a price for purchasing USD and a USD 10,000 per month limit.

So what the Argentinian people did was as follows: get paid in ARS, buy as many USD as you can afford at the official (lower) price, then go to the black market and sell at a higher price, which netted them more ARS than they had at first. Repeat until you reach the USD10000 limit.

They call this "hacer puré" (make mashed potatoes), and caused the unofficial price to go even further up. This scheme is basically "free money" for the people at the cost of the federal reserves, but it's nothing new for the Argentinian economy (the 90s were crazy). After the national elections, the government cut back on the limit down to USD 200 per month, rendering the scheme unusable (for now).

Source: I live next to Argentina

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#225

Post by shadowgovt »

marcosdumay wrote: post #209
shadowgovt wrote: post #114

Earlier quoted context omitted.

Storing value is considered to be one of the three functions of money [ https://en.wikipedia.org/wiki/Money#Functions ]. And the fact that BTC's value fluctuates so wildly (in an era where fiat currencies like the dollar tend to remain a lot more stable) is one of the obstacles to mass adoption. It turns out that making a currency behave "gold-like" carried with it the disadvantages to the gold standard that induced…

I'm not saying that money isn't useful as a storage of value. What I am saying is that there is very little social benefit from that usage. To decide whether a currency is successful, one should look exclusively at its use as a means of exchange, ignoring any use as a storage of value or speculation target.

The social benefit to storing value is de-risking against the future (2). I keep some money in my bank account so that if I need to buy food for a month with no source of income I can(1). If the money in my bank account buys a third as much food tomorrow because it lacks stable value as a store, that's bad for society, because if I'm going to starve to death, I might as well use the remaining energy I have to burn some stuff down or eat the rich.

(1) Ideally, I of course live in a society that doesn't consider it acceptable to let people starve to death and has a secondary system for routing food from supply to necessity without demanding I exchange stored value for that food, lest I die because I have no measurable stored value. I'm using a simple model here, and we can probably move the particulars around to find something that a society doesn't provide which is considered valuable enough that people store up private wealth to acquire it (and lacking the ability to do so, would resort to burning the system down).

(2) There is probably an interesting question in whether such privatized de-risking against the future is actually a societal benefit (because of the risk that it becomes simple hoarding). Is that risk why you have discounted value-store as a societal benefit?

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#226

Post by wruza »

jcfrei wrote: post #191
7777fps wrote: post #24

Earlier quoted context omitted.

You're implying a single exchange moving the market needs cash to move it. If the ecosystem has decided one exchange is the lead price, then they manipulate the price without needing the underlying assets. Furthermore, bitcoin is one of the only markets I've seen which rewards "whales" instead of punishing them, because in most markets moving the market you will lose money to slippage. The market price will retract a…

> because in most markets moving the market you will lose money to slippage. The market price will retract after you bump it. That's not slippage. Slippage is when you get filled at a higher (or lower) price than you were expecting. Prices moving up when an asset is bought is normal on traditional exchanges as well.

I’ll second that, as there seems to be a strange connection between slippage and fundamentals in GP comment. 7777fps, can you please expand on that a bit more?

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#227

Post by donkeyd »

neiman wrote: post #201
DennisP wrote: post #192

Earlier quoted context omitted.

And it seems unlikely that Ethereum's 100X rise in 2017 had nothing to do with the ICO boom.

I also find it hard to believe that the whole cryptoboom of 2017 can be narrowed down to one dimensional Tether-Bitcoin analysis.

It's probably a combination of manipulation on an incredible scale and the media attention this surge caused. We all know multiple people who FOMO'ed into crypto and lost most of their money. So that surge definitely wasn't all manipulation, but I'm not at all surprised that manipulation was what triggered that madness.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#228

Post by Nursie »

lostmsu wrote: post #186
neiman wrote: post #157

It's impossible to have a discussion based on news reports, so here's a link for the original paper. I copied the title and abstract below. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066 I browsed through the paper. Their main result, if I understood correctly, is that they found "considerable evidence that Tether is used to purchase Bitcoin following Tether authorization and a drop in Bitcoin price, and…

> Rather than demand from cash investors Can't find how did they determine, that Tether was not bought with cash, so this statement is basically baseless.

The pattern of issuances to market make it highly unlikely.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#229

Post by mattferderer »

I recall reading a story in a book of a technique in horse racing where a person slowly makes a lot of bets to change the odds & then watches people poor in cash on what looks like a rising star. Then the initial person places a bet with better odds somewhere else.

I've always been curious how well this works in other markets, especially the smaller cryptocurrency alt coin markets.

Re: Lone Bitcoin Whale Likely Fueled 2017 Price Surge, Study Says

#230

Post by Nursie »

askmike wrote: post #216
anyfoo wrote: post #177

Earlier quoted context omitted.

The Internet was always at capacity. Until we had the pervasive networking we have today, there were always more people wanting to have Internet access more persistently and with more performance than what was available. Almost everyone who had the opportunity to use the Internet, would. As a result, enormous advances in technology were made to implement today’s pervasive networking. New use cases manifested immediat…

> Almost everyone who had the opportunity to use the Internet, would. I'm too young to have experienced this. But I've seen countless of clips and interviews of people claiming they would never use the internet because they can send post and use a telephone instead. "Computers are for geeks", etc. > New use cases manifested immediately all the time. Nobody ever said “we implemented this world wide network thing, now…

Nobody said that back then, no. They said there had been an over-exuberant market with people throwing stupid money at any old idea, but nobody was saying "the internet is a bust" or even "we don't know the use-cases" because there were a ton of other useful, successful things going on with it.

You said it yourself - you're too young to actually know a lot about that, but you use it to bolster your arguments anyway.

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