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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

#71

Post by dragonwriter »

comboy wrote: post #28
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

OK, yes, that's a fair point. But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC. Also we've been there (mtgox's willy etc). I don't think bitcoin will be much less volatile any time soon. https://www.youtube.com/watch?v=XbZ8zDpX2Mg

> But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC

People trying to get out of USDT into BTC because the USDT:USD parity assumption collapses will boost BTC:USDT prices, but probably not enough to avoid dropping BTC:USD, because it would be less than the USDT:USD drop, is the idea.

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

#72

Post by jdjfjtkfkf »

The real USDT/USD market is not the Kraken one (or similar ones), but the implied synthetic market creating by arbing BTC/USDT and BTC/USD.

Companies like Alameda trade billions arbing this synthetic USDT/USD market close to peg:

https://twitter.com/AlamedaTrabucco/status/13487730276395622...

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

#73

Post by EliRivers »

dylkil wrote: post #49

>But during the same period, total issued Tethers increased by almost $5.4 billion — going from $4.6B to $10B >The implication was shocking: there weren’t nearly enough dollars in all the domestic banks in the Bahamas to >back the Tethers that were floating around in the crypto market. Doesn't match up with whats shown here[1], Bahamas banks are holding 110bn in customer deposits. [1] https://stats.bis.org/statx/srs/…

Upvoted for coming armed with an actual fact related to the article, disagreeing with the author's premise based on some actual evidence. Might be right, might be wrong, but it's something other than just more opinion. Wish I could upvote more than once.

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

#74

Post by nik_s »

The author implies that the recent growth in tether's market cap is an indication of an incoming exit scam.

A cursory glance at Coinbase's USDC's market cap [1] shows that it too is growing at almost exactly the same pace as tether's [2]. I think most players in this market would agree that Coinbase, for all of it's failings, is unlikely to be planning an exit scam at this point.

It doesn't disprove the whole thesis, and some elements of it might have merit, but at least one element of it seems weak to me.

[1] https://coinmarketcap.com/currencies/usd-coin/

[2] https://coinmarketcap.com/currencies/tether/

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

#75

Post by leppr »

BelenusMordred wrote: post #54
tim333 wrote: post #37

Earlier quoted context omitted.

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…

> 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?

Assuming you have enough collateral, you currently even get paid money to hold a short.

As to your general point, I'd avoid holding the view that a 7 or so years old business can't fail as any kind of general truth. I know many smart people who are extremely bullish on cryptocurrencies, with huge investments. None of them think Tether will not fail one day. Everyone is playing the current market as a bubble.

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

#76

Post by gomox »

leppr wrote: post #46
ur-whale wrote: post #34

Really good article, recommended read for anyone interested in crypto. For me, it's almost 100% aligned with what I've felt was going on with Tether in the last 2 years. Also, it sort of crystallized an answer to a question I've had about Binance for quite a while: how did they manage to get so big, so fast. Answer: easy, they never had to establish proper on and off ramps to the traditional banking system and lured…

> it sort of crystallized an answer to a question I've had about Binance for quite a while: how did they manage to get so big, so fast. ... No, Binance didn't get big because of Tether or leverage. It was already eating most of the crypto-only exchanges volume when altcoins were almost exclusively paired with BTC and before it acquired its perpetual futures business. The main reason they managed to attract so many us…

Also Binance is quite simply a better exchange. It works flawlessly even when the market is hot. The quality of what they've developed and the speed at which they did it makes the average silicon valley team look like 7 year olds.

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

#77

Post by leppr »

rmtech wrote: post #70
BelenusMordred wrote: post #54

Earlier quoted context omitted.

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…

How do you short Tether?

FTX exchange. Unavailable to US residents though.

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

#79

Post by leppr »

gomox wrote: post #76
leppr wrote: post #46

Earlier quoted context omitted.

> it sort of crystallized an answer to a question I've had about Binance for quite a while: how did they manage to get so big, so fast. ... No, Binance didn't get big because of Tether or leverage. It was already eating most of the crypto-only exchanges volume when altcoins were almost exclusively paired with BTC and before it acquired its perpetual futures business. The main reason they managed to attract so many us…

Also Binance is quite simply a better exchange. It works flawlessly even when the market is hot. The quality of what they've developed and the speed at which they did it makes the average silicon valley team look like 7 year olds.

Most of what they developed is customization over white label solutions (that's how the main exchange was started), and acquisitions. The UI is a convoluted mash-up of different systems. Try using their margin trading. They're spending very little on in-house software development compared to their revenue and the average SV company of that size, and it shows.

> It works flawlessly even when the market is hot.

That's factually false. It holds up better than Coinbase sure, that's not hard, but it very frequently gets overwhelmed during volume spikes. The web UI and the various price feeds often fall behind. The orderbook feed falls out of sync even during normal usage hours. The more robust part of their stack, the trading API, rarely goes down though, I'll give you that.

I guess your comment makes my point about BNB. It's a great way to keep customers loyal and engaged. I do agree that overall it is the best cryptocurrency exchange, but let's not use HN as a shilling avenue.

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

#80

Post by traumivator »

nik_s wrote: post #74

The author implies that the recent growth in tether's market cap is an indication of an incoming exit scam. A cursory glance at Coinbase's USDC's market cap [1] shows that it too is growing at almost exactly the same pace as tether's [2]. I think most players in this market would agree that Coinbase, for all of it's failings, is unlikely to be planning an exit scam at this point. It doesn't disprove the whole thesis,…

Check the volume for USDC/USDT. It has been increasing the last couple of weeks.

So one could argue that people are trading largely unbacked USDT for backed and audited USDC. Which increases the demand for USDC and the USDC minting.

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