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The Bit Short: Inside Crypto’s Doomsday Machine

crypto-anonymous-2021.medium.com

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Re: The Bit Short: Inside Crypto’s Doomsday Machine

#51

Post by spottybanana »

JackFr wrote: post #33

I’ve always been, and remain still, a skeptic of all things crypto. I typically skip the crypto-focused articles on HN. I’m sure glad I didn’t today. > The US Treasury should enforce 100% reserve requirements on all USD-pegged crypto stablecoins, with mandatory audits. Laughter is really the best way to start my day.

So, you are glad to see articles that support your viewpoint?

Don't you regret at all missing all the gains you have made along the years by not buying small amount of BTC? In the end the guy who wrote this article made quite good amount bu buying BTC low and selling high. Lets see how it ages.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#52

Post by ur-whale »

yeneek wrote: post #32
quickthrower2 wrote: post #23

Earlier quoted context omitted.

If tether is pumping BTC then it’ll stop pumping BTC when it’s taken away. Weak hands will fold and then there will be a crash

Tether market cap is 24bil, Bitcoin market cap is 714bil. Its just 3%. I think that Tether isn't inflating BTC that much. The institutions that buy BTC like PayPal, Square, JPMorgan have much bigger effect on Bitcoin than Tether.

This is addressed in the article.

Basically the market cap of BTC is not relevant here, but rather the daily volume.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#54

Post by BelenusMordred »

tim333 wrote: post #37
comboy wrote: post #6

I don't get it. tether sucks. If you hold tether it may turn into air. But your bitcoin is still bitcoin. Also, when tether is going down wouldn't you want to sell it thus creating pressure in btc/tether market and value of of tether/btc going up? It's always been clear to me that USD/BTC and USDT/BTC are two different markets. USDT is just another cryptocurrency. Many of them were scams and disappeared and many more…

The argument basically is tether has been inflating the price of bitcoins. If tether collapses bitcoins will still be there but may trade at $3000/coin rather than $38000. Comparing with gold it's like the price has been inflated by people buying it with forged dollar bills. That said the author seems a bit new to this all with his shock at finding Bob is likely being scammed. Bitcoin has been linked with scams almos…

Why on Earth would $100 billion worth of Tether rushing for a conversion into anything else drag _down_ the price of BTC? Or any other coin for that matter?

Have you actually sat down and thought about this, even if 99% waited and cashed out over weeks, that 1% is still a huge injection into the ecosystem.

People have been shown time and time again that the money is there, the peg can hold, the underlying company is also a cryptoexchange that can print cash simply by existing and all haters have left is attaching their ego to this notion and clinging to the dream of it going bankrupt over night. And the more they are wrong the more they desperately cling to this idea.

Tether had $1B stolen from them when it was a significant % of their assets, along with the US govt taking other funds in the NYAG case and they easily survived, if not thrived.

These comments/stories on HN have been here for years and they don't age well, it's hilarious to watch.

You can all go short tether or bitcoin today for a fraction of a penny on the dollar, and yet, don't :/

Why not do it, you can hold a bitcoin future going short for the next year less than a coffee per / $1k, why not do that? Would surely make a great story.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#55

Post by yeneek »

yeneek wrote: post #32
quickthrower2 wrote: post #23

Earlier quoted context omitted.

If tether is pumping BTC then it’ll stop pumping BTC when it’s taken away. Weak hands will fold and then there will be a crash

Tether market cap is 24bil, Bitcoin market cap is 714bil. Its just 3%. I think that Tether isn't inflating BTC that much. The institutions that buy BTC like PayPal, Square, JPMorgan have much bigger effect on Bitcoin than Tether.

JackFr Fair point. Thank you.

Well, it will be an interesting week for sure.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#56

Post by maxbond »

leppr wrote: post #36
maxbond wrote: post #25

Earlier quoted context omitted.

Tether will almost certainly collapse, and then you'll have a lot of bitcoin chasing very few dollars. There is likely to be a stampede for dollars, which becomes a vicious cycle deflating the price of Bitcoin - the liquidity is consumed (Bitfinex is printing Tether because there aren't enough dollars to go around at unbanked exchanges, afterall) at the same time the downward volatility dramatically increases the per…

There are some Defi options on Ethereum that could allow you to short BTC with a USDC [1] collateral, like dYdX [2]. You would need to keep a small amount of ETH to operate the smart contracts, which could fluctuate in dollar value, but even after a black swan event, there's no reason that this decentralized infrastructure would not still be running, allowing you to redeem the USDC to real dollars. [1] Circle dollars…

I appreciate the idea, but I neglected to mention (c) is legal in the US. Speculating on bubbles is just out of my league, and I'm okay with that.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#57

Post by Erlich_Bachman »

PaulAJ wrote: post #48

So if I understand this correctly, you can go to one of these pyramid scheme exchanges, tank up on highly leveraged tethers, and then go sell them on Kraken. Do this often enough and you will drain the resources of the pyramid scheme, causing it to collapse. So you make a profit and provide a social good all on one smooth move. Have I got that right?

How exactly do you plan to make a profit in this scenario?

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#58

Post by ur-whale »

H8crilA wrote: post #5

> For the rest of 2020, my inflationary thesis looked right Just to make it clear: there's absolutely no broad inflation almost everywhere in the world, certainly not in the United States. It may still come, but inflation is not why Bitcoin is on such a tear. Look at CPI or PPI of you don't believe me. Although this does remind me of the Green Lumber Trader story from Taleb. Congrats on the trade!

>there's absolutely no broad inflation

If your measuring stick is fiat, then sure there isn't any inflation.

However, you're using a measuring stick whose length isn't constant.

If you use Gold as your measuring stick, then things change.

If you user Bitcoin as your measuring stick, things change dramatically.

If you use real estate - can you still say there is no inflation ?

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#59

Post by leppr »

PaulAJ wrote: post #48

So if I understand this correctly, you can go to one of these pyramid scheme exchanges, tank up on highly leveraged tethers, and then go sell them on Kraken. Do this often enough and you will drain the resources of the pyramid scheme, causing it to collapse. So you make a profit and provide a social good all on one smooth move. Have I got that right?

You can do this indeed but that'll cost you money as USDT is valued slightly below 1 USD, and you will incur slippage the larger your amount is. The best way to withdraw large amounts of Tether's to USD is through their platform itself, for a fixed ~$1000 fee.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#60

Post by ur-whale »

atemerev wrote: post #43

It is not “doomsday machine”, it is “Tuesday”. Yes, Bitcoin is volatile, and crypto markets are manipulated (just like all other markets, e.g. tech stocks with Softbank-originated program trading right now). If tomorrow Bitcoin will cost $10000, nobody will be surprised. Neither if it will be $70000. We are not building crypto systems for speculation.

This.

If you're really interested in Bitcoin and the crypto space, paying attention to the price should only be relevant because it is volatile and slows down adoption.

Its absolute value is essentially boring.

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