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If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

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Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#101

Post by JumpCrisscross »

account73466 wrote: post #87
JumpCrisscross wrote: post #83

Earlier quoted context omitted.

> The market cap for any security, by definition, is price-per-security number-of-securities Market cap is an equities concept. The market value of a series of bonds isn't the issuance's market cap. The notional value of all options on a symbol is only useful to operations/settlement folk. For Bitcoin, "market cap" is meaningless. It's too thinly and opaquely traded. Better would be flow of funds, i.e. value of new m…

>> It's too thinly and opaquely traded That claim about "thinly" contradicts the numbers given in my post above.

> That claim about "thinly" contradicts the numbers given in my post above

Most Bitcoin volume is non-economic [1]. Some of it is fraudulent printing. Some of it is wash trading.

That said, I don't doubt Binance's figures. The problem with taking a few trades and multiplying it by the outstanding coinage goes back to the aggregate being meaningless.

[1] https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#102

Post by 9nGQluzmnq3M »

buboard wrote: post #96
spookthesunset wrote: post #76

Earlier quoted context omitted.

> It remains a possibility that they are wash-trading. I'd say they all have every single incentive to wash-trade, front-run, and otherwise cheat the hell out of their system to their advantage. After all, they are completely unregulated and almost always operate well outside any jurisdiction who would care to go after them. I'd say you'd be silly to assume they aren't doing ultra-shady crap.

Their BNB coin used to pay fees outperforms bitcoin past year. Is that wash trading as well?

Not necessarily, it could be a Ponzi scheme instead.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#104

Post by mr_woozy »

Acrobatic_Road wrote: post #86
bduerst wrote: post #77

Earlier quoted context omitted.

>... Lightning only scales with the number of transactions, not users. Is the rest of the sentence that you quoted out of context. Did you not see the example?

>Lightning only scales with the number of transactions, not users. You seem to be poking at the need to open a lightning channel to get started using lightning and using the onboarding time to suggest that lightning cannot scale. First of all I think the way you made that argument is entirely disingenuous. Let's look at your first example: >* For 2 users to make 10,000,000 transactions between each other, it would ta…

I'd be interested in reading more about channel factories, got any useful links?

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#105

Post by mikeyouse »

whack wrote: post #68
mikeyouse wrote: post #38

Earlier quoted context omitted.

There's no such thing as a "market cap" for Bitcoin - seriously, give me a definition of "market cap" for Bitcoin that makes any sense at all compared to something like the future value of cash flows from UNH equity.

The market cap for UNH isn't calculated using future cash flows. The market cap for any security, by definition, is price-per-security * number-of-securities. Similar valuations also exist for gold-funds, which also have no cash flows. You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless. But that has nothing to do with the formula for c…

> The market cap for UNH isn't calculated using future cash flows.

Yes it is...

> The market cap for any security, by definition, is price-per-security number-of-securities.*

How do you think you get the price-per-security for a stock? If Apple has $100B in cash, why is their Market Cap $1.2T?

This is why people are skeptical of most things crypto... it really seems like there's hardly anyone in the community who understand fundamental financial concepts.

> You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless.

No - I'd just argue that it's completely misleading to try and assign a "market cap" to any asset other than a security and that people who rely on them are doing so to mislead rather to inform.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#106

Post by NovemberWhiskey »

account73466 wrote: post #49
hammock wrote: post #40

Earlier quoted context omitted.

Bitcoin is not a stock though. Forex markets do $5 trillion in daily volume against an $80 trillion base. For example.

Forex market are highly leveraged so it is better to compare them to Bitcoin Futures then. Bitcoin Futures have about $7 bil of volume today for $133 bil market cap (so the factor is similar). Obviously, trillions and billions are not on the same scale and I have no clue whether the factor should remain the same.

> Forex market are highly leveraged

Not really: spot and outright forwards are about $3tn of daily turnover in the OTC forex markets; with forex swaps amounting to about another $3.2tn.

There is about $100tn notional of OTC forex derivatives outstanding, but the actual total market value is only about $2.2tn. Exchange-traded forex futures and options have barely $170bn of daily average turnover of notional.

(all numbers courtesy of the Bank for International Settlements)

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#107

Post by mr_woozy »

bduerst wrote: post #84
pouta wrote: post #56

Earlier quoted context omitted.

Where can I read more about how you came up with those numbers? I didn't knew that side of lightning.

It's napkin math based on the Bitcoin network's hard limitations of 4-7 transactions/second, so assuming 5 tx/s, then there's 432K transactions/day limit. Since lightning requires Bitcoin to settle transactions between parties, it means that the more users there are making transactions, the more it needs bitcoin. If it's just a handful of users making a million transactions, then there's no problem since lightning wi…

>the more users there are making transactions, the more it needs bitcoin.

whot? why?

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#108

Post by Melting_Harps »

shepardrtc wrote: post #39
account73466 wrote: post #31

Bitcoin has about $133 bil marketcap. NYSE symbols with the twice (2X) this marketcaps according to Yahoo Finance: UNH (UnitedHealth Group) mcap: $262 bil, trading volume: $1.2 bil KO (COCA-COLA) mcap: $231 bil, trading volume: $0.6 bil MRK (MERCK) mcap: $225 bil trading volume: $0.7 bil Therefore, for Bitcoin to be tradeable as similar stocks it has to show $0.25-0.5 bil for $133 bil mcap or $0.5-1.0 bil for $250 bi…

I have a hard time believe its anything other than market makers providing the illusion of trades. Have you seen the price swings? If there was real volume and real transactions asides from trades, how would such insane swings be possible?

> I have a hard time believe its anything other than market makers providing the illusion of trades

Can you elaborate? I'm guessing you mean whales?

Also, how is this any better or different for that matter, for the most stock exchanges like NYSE when most of it is Algo based bit trading?

Bitcoin definitely suffers from volatility, how much you can attribute that to large holders (whales) is incredibly difficult; consider that the Japanese government, as were the US Marshalls, fill(ed) that role as they took over Mt. Gox and Silk Road respectively. Other local governments have also created large (relatively to a private individual) mining operations as job creator (Montana).

So, again, I'll first ask you to define what a Market is, and what exactly constitutes a Marker Maker, because what you're describing is not exactly clear nor is it intelligible given the context of what the aforementioned are and their roles in price discovery.

Re: If Bitcoin Looks Like It Isn’t Trading, It’s Because It Isn’t

#110

Post by bduerst »

Acrobatic_Road wrote: post #95
bduerst wrote: post #84

Earlier quoted context omitted.

It's napkin math based on the Bitcoin network's hard limitations of 4-7 transactions/second, so assuming 5 tx/s, then there's 432K transactions/day limit. Since lightning requires Bitcoin to settle transactions between parties, it means that the more users there are making transactions, the more it needs bitcoin. If it's just a handful of users making a million transactions, then there's no problem since lightning wi…

> If there's a million users making a handful of transactions, well, then lightning needs to settle a few million transactions on Bitcoin (which takes weeks). Sorry, but you seem to be entirely ignorant of how lightning works. Lightning does not need to settle transactions on Bitcoin. If I pay someone using lightning then that payment is as good as good. The person who received the funds could go on and pay someone f…

> If I pay someone using lightning then that payment is as good as good.

Lightning is an I.O.U. that is not good until you settle on Bitcoin. If you are not using Bitcoin to settle transactions, then you there is zero guarantee of getting paid. Stop spreading these lies about the Lightning network.

Trading I.O.U.s on an obscure network is not a payment solution outside of sending money between your friends. For businesses and other untrusted parties, they will settle immediately on Bitcoin which is why Lightning is not being used seriously today. The same way businesses don't trade in third party checks today.

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