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

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

#101

Post by JackFr » Fri, Jan 15, 2021, 2:01 PM UTC

spottybanana wrote: post #51

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.

Honestly I don't care about articles that support my skepticism, they largely bore me as well. What made this article and others like so amusing is the tremendous irony of demanding regulation, irony that the author seems completely oblivious to.

Do I regret missing out on all of the crypto gains I could have had? Honestly I don't really think about it that often and when I do it's largely because I work in tech and I'm often forced to work with people who won't shut up about it. But I lived through similar periods with the first dotcom bubble, and the housing market in the run up to the financial crisis. I don't like 'greater fool' investing as a strategy (but certainly some people have gotten very rich with it) so no I guess I don't regret it.

(One sidelong observation there are a lot more paper gains than realized gains. I've worked with a number of bitcoin millionaires. But if I filter the count to those who have > $1mm in USD, in a US domiciled bank, the number drops top zero. Who knows? Maybe it's adverse selection. Maybe the real winners aren't working anymore.)

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

#102

Post by tim333 » Fri, Jan 15, 2021, 2:26 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…

>short tether or bitcoin today for a fraction of a penny on the dollar

I shorted tether one time, on Kraken, and it was horrendously expensive, like 25% per annum. Do you know where it can be done cheaply?

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

#103

Post by anfogoat » Fri, Jan 15, 2021, 2:42 PM UTC

dannyw wrote: post #18

This is nothing more than FUD designed to benefit a short position. The reason why exchanges like Binance and Bybit have their inflows from Tether... is because (as the author explains) they only take Tether! Why do they only take Tether? Because US banking is incredibly expensive and a regulatory nightmare. Why do people use Tether exchanges, over Coinbase? Not just because of leverage, but also because many do not…

> Why do people use Tether exchanges, over Coinbase? Not just because of leverage, but also because many do not AML/KYC, especially if you only deal with crypto. A LOT of people in the crypto community don't like to pay taxes, and we've known this from day one.

I don't know if evading taxes is the main reason but it is definitely not the only one. Going through KYC is an embarrassing and demeaning experience, unless you like prancing in front of a camera.

It is also close to equivalent to just plastering your picture and ID all over the public Internet as that is exactly where they'll end up when your exchange of choice is eventually broken into.

Just another gift from the anointed ones.

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

#104

Post by leppr » Fri, Jan 15, 2021, 2:45 PM UTC

tim333 wrote: post #102

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…

>short tether or bitcoin today for a fraction of a penny on the dollar I shorted tether one time, on Kraken, and it was horrendously expensive, like 25% per annum. Do you know where it can be done cheaply?

https://ftx.com/en/trade/USDT-PERP

Slightly positive predicted funding at the moment, which means you would get paid for shorting.

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

#105

Post by mathgenius » Fri, Jan 15, 2021, 2:50 PM UTC

csomar wrote: post #50

I'd be very careful to take advice from this guy. 1. He's definitively bad at investing. He doesn't have an investment strategy, and probably never heard of portfolio re-balancing. 2. He got in lucky and made some good returns. Now he thinks he is a genius because of that, and as a result can predict the next market move. 3. He didn't do good market research. For example, most of the volume in USDT is faked by the ex…

> For example, most of the volume in USDT is faked by the exchanges.

I agree this volume cannot be trusted. Much like the asian volume in 2017 turned out to be mostly fake. I find it hard to believe that Binance got so big so fast.

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

#106

Post by frankenst1 » Fri, Jan 15, 2021, 3:03 PM UTC

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…

Sidenote: It currently costs miners ~$10K to produce 1 BTC.

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

#107

Post by ur-whale » Fri, Jan 15, 2021, 3:50 PM UTC

andyjohnson0 wrote: post #99

ur-whale wrote: post #47

Earlier quoted context omitted.

Please do your darndest to legally pay the least amount taxes possible and find every opportunity to change the system so taxes are lowered: you tax money will, in the vast majority of the cases, be wasted Stop feeding the beast. Starve it every opportunity you have.

How about paying your taxes and "doing your darndest" to change the system so that tax revenue is spent wisely for the benefit of the whole of your society?

I prefer not to play games that I know are rigged against me.

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

#108

Post by ur-whale » Fri, Jan 15, 2021, 3:54 PM UTC

piva00 wrote: post #95

ur-whale wrote: post #47

Earlier quoted context omitted.

Please do your darndest to legally pay the least amount taxes possible and find every opportunity to change the system so taxes are lowered: you tax money will, in the vast majority of the cases, be wasted Stop feeding the beast. Starve it every opportunity you have.

I prefer to support Swedish's society and just pay my due taxes, thank you. The beast here is responsible for a lot of the quality of life we enjoy, public services included.

[flagged]

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

#109

Post by H8crilA » Fri, Jan 15, 2021, 4:24 PM UTC

keypusher wrote: post #86

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.

Where's the inflation in the Eurozone? They're way ahead of the US. Or even better, Japan, "printing" like a madman since the 90s, uhm where is that inflation you mentioned?

But yes, they don't go away, such things actually cause deflation because they prevent recession-cleansing of inefficient organizations, keep property prices high, cripple people and organizations with debt, ...

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

#110

Post by not2b » Fri, Jan 15, 2021, 4:40 PM UTC

It seems that this guy decided to go heavily into Bitcoin because of a mistaken belief that seems all too common: "At the time, I saw a market dislocation and the likelihood of significant dollar inflation due to the US Government’s likely response to the unfolding pandemic."

He thought that government responses to severe crises that inject lots of money into the economy will cause "significant dollar inflation". In the real world, over the full year of 2020 inflation was 1.4% in the US (food costs went up a bit more, energy costs went down). Failure to inject money into a failing economy results in massive deflation. That's because money was rapidly disappearing from the economy. Money isn't created primarily because governments print it; whenever a bank creates a loan money is created, and when they call in loans money disappears. Central banks control the money supply by regulating banks, and their goal is to keep things stable.

Source: https://www.bls.gov/news.release/cpi.nr0.htm