The Bit Short: Inside Crypto’s Doomsday Machine • Hacker News Board

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

#81

Post by acoustic » Fri, Jan 15, 2021, 12:10 PM UTC

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/…

Those numbers are for all bank offices located in the Bahamas, most of which are foreign bank branches. The numbers in the row "By type of bank - Domestic banks" [1] appear consistent with the article.

[1] https://stats.bis.org/statx/srs/table/A5?c=BS&m=S&p=20202&o=...

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

#82

Post by furi » Fri, Jan 15, 2021, 12:15 PM UTC

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…

If the scheme described by the article really exists, then it represents a substantial fraction of the demand for BTC. It's true that such a scheme collapsing would drive demand for BTC from USDT holders up. That's of course assuming they could still trade their USDT. Tether (the company) cancelled $30 million worth of coins stolen from them a few years back which suggests if the company was seized the ability to trade USDT could be disabled. But it's also true that such a scheme collapsing would instantly drive demand for BTC from Tether (the company) to zero. If that demand really is almost 70% of all the demand for BTC then BTC's price should decline significantly.

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

#83

Post by gomox » Fri, Jan 15, 2021, 12:27 PM UTC

leppr wrote: post #79

gomox wrote: post #76

Earlier quoted context omitted.

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…

Lol. I hold precisely 0 BNB, and never did. These guys are execution masters, and the proof is in the pudding.

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

#84

Post by mckirk » Fri, Jan 15, 2021, 12:38 PM UTC

Thanks for this article, I've gotten out of crypto for the moment for the exact same reason.

The probability that something fishy is going on which would trigger a panic-sale when it's discovered is too high until we know more about the court case against Tether, imho.

Though all the people insisting on calling this FUD do make me wonder whether I'm seeing things or this is an "emperor's new clothes" situation.

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

#85

Post by Bellamy » Fri, Jan 15, 2021, 12:47 PM UTC

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.

And from the 3% of tether, probably 74% is actually been backed.

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

#86

Post by keypusher » Fri, Jan 15, 2021, 12:50 PM UTC

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!

Inflation is already here, it's just that the wealth hasn't "trickled down" into the middle/lower class so consumer goods haven't spiked yet. It will seep out eventually, but right now it's mostly still sitting in financial markets and corporate accounts. The trillions (yes, trillions) of dollars that have been pumped into the economy via QE and other fed programs don't just go away.

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

#87

Post by dannyw » Fri, Jan 15, 2021, 12:50 PM UTC

leppr wrote: post #79

gomox wrote: post #76

Earlier quoted context omitted.

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…

1. I don't hold BNB.

2. I have had way less problems with Binance than Coinbase, so I am a happy Binance customer.

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

#88

Post by leppr » Fri, Jan 15, 2021, 12:51 PM UTC

gomox wrote: post #83

leppr wrote: post #79

Earlier quoted context omitted.

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…

Lol. I hold precisely 0 BNB, and never did. These guys are execution masters, and the proof is in the pudding.

Sure, praise for their business execution is warranted. It might even be allocating so little resources to the surface product (UI/UX) that's allowed them to move so fast in other more important avenues like liquidity, diversity of offerings and customer support.

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

#89

Post by Bellamy » Fri, Jan 15, 2021, 12:52 PM UTC

rmtech wrote: post #67

We are due a cryptocurrency correction. The question is, how low will Bitcoin go on Tether collapse? $20k? $10k? Or will things get even crazier with $100k bitcoin crashing to $60k?

The tether market cap value that is in Bitcoin, so it's 3% + normal overreaction. My estimation: 9%.

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

#90

Post by leppr » Fri, Jan 15, 2021, 12:54 PM UTC

dannyw wrote: post #87

leppr wrote: post #79

Earlier quoted context omitted.

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…

1. I don't hold BNB. 2. I have had way less problems with Binance than Coinbase, so I am a happy Binance customer.

The bar is low with Coinbase, and I was replying to a specific unwarranted praise about Binance, already mentioning that it's indeed arguably the best exchange overall.