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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

#261

Post by faffe »

mikewarot wrote: post #251
dnp100 wrote: post #224

Earlier quoted context omitted.

Deflation is a wonderful thing. It means more people can buy more stuff. It should be one of the primary goals of our civilization.

>Deflation is a wonderful thing. It means more people can buy more stuff. The problem is if you know your money is going up in value, why would you buy stuff with it? You'd hold on to it even harder... thus increasing the deflation, as people lose their jobs, homes, and society falls apart... but hey... your hoard is going up in value. Deflationary spirals kill people.

I believe the deflation virtue described above refers to the capacity to a business in democratising a product or service that used to be expensive. The growth here ( typical example is Uber) of the company called mes with a deflation of the price.

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

#262

Post by cocothp »

gomox wrote: post #96
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…

There's a very strong point to be made that shorts in a rigged market are not a good idea, because squeezing the shorts is easy for the money printers (who plausibly have visibility over the liquidation price points), whereas the odds of actually collecting in a black swan crash are slim to none.

I'm having a hard time wrapping my head around how squeezing Tether or Bitcoin would work in this case. Could you please explain?

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

#263

Post by leppr »

tim333 wrote: post #260
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.

I think you can attribute a lot to the founders background. Previously he'd built trading systems for the Tokyo stock exchange, Bloomberg and >In 2005, he moved to Shanghai where he founded Fusion Systems, known for "some of the fastest high-frequency trading systems for brokers." (wikipedia) He presumably knew his stuff.

Sure would be nice if he applied his supposed trading systems expertise to Binance... quite ironic that his current exchange is one of the slowest on the market: https://latency.azidyn.com/

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

#264

Post by ur-whale »

piva00 wrote: post #256
ur-whale wrote: post #108

Earlier quoted context omitted.

[flagged]

Sweden isn't socialist (quite far from it, one of the freest markets in the world), and I wasn't born nor raised here. So the two core assumptions of your comment are dead in the water.

>Sweden isn't socialist

Say you make the yearly local equivalent of 150k USD, what is your income tax rate in Sweden?

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

#265

Post by dragonwriter »

piva00 wrote: post #256
ur-whale wrote: post #108

Earlier quoted context omitted.

[flagged]

Sweden isn't socialist (quite far from it, one of the freest markets in the world), and I wasn't born nor raised here. So the two core assumptions of your comment are dead in the water.

> Sweden isn't socialist

The transition from the system described in the 19thC as “capitalism” to the modern mixed economy was an adoption of socialism (while it wasn't mostly adopted as a coherent program but instead a series compromises between different factions, as a deliberate program it would have been a form of what Marx described—and opposed—as “bourgeois socialism”. And the Nordic .model, including the form in Sweden, leans into some of the socialized elements more heavily than is typical, with notably strong social safety nets and public pensions.

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

#266

Post by piva00 »

ur-whale wrote: post #264
piva00 wrote: post #256

Earlier quoted context omitted.

Sweden isn't socialist (quite far from it, one of the freest markets in the world), and I wasn't born nor raised here. So the two core assumptions of your comment are dead in the water.

>Sweden isn't socialist Say you make the yearly local equivalent of 150k USD, what is your income tax rate in Sweden?

Tax rate doesn't have any relationship to socialism, what's your point?

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

#267

Post by gomox »

cocothp wrote: post #262
gomox wrote: post #96

Earlier quoted context omitted.

There's a very strong point to be made that shorts in a rigged market are not a good idea, because squeezing the shorts is easy for the money printers (who plausibly have visibility over the liquidation price points), whereas the odds of actually collecting in a black swan crash are slim to none.

I'm having a hard time wrapping my head around how squeezing Tether or Bitcoin would work in this case. Could you please explain?

Say you think Tether USD (USDT) is worthless and is being printed willy nilly to prop up the price of Bitcoin. As a corollary, you are basically forced to assume that large exchange owners are aware of this fact because quite simply there is no other way for fraud to happen at such a large scale without their knowledge, since exchanges KYC their customers and are aware of their balances and trade volumes.

So you find an exchange that will allow you to short the BTC/USD (not USDT) pair and take a position. The liquidation price of your short is known to the exchange operators. If your position is large enough to create a problem for the whole scheme, the exchange owners can inform the Tether printers of your liquidation price, which they can use to squeeze you out, because they know exactly how high the price has to be to trigger your margin call.

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

#268

Post by Majromax »

JSavageOne wrote: post #242
Majromax wrote: post #189

> Now fast-forward one year. In March of 2020, I bought a large amount of Bitcoin. 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. I'm frustrated by this statement. If you predict inflation in the USD that is not currently priced into the market, then there are already plenty of conventional ways to make m…

You're frustrated by the fact that he invested in an asset that 4-5x'd his money in 10 months? Ok...

Yes, because it did so for the wrong reason.

"I thought that Apple stock was overvalued, so to short it I bought a lottery ticket" is nonsense, even if the lottery ticket wins.

Portfolio construction isn't about picking the biggest winner. It's about finding the optimal rate of return for a given amount of risk tolerance. "I think we're due for hyperinflation" is a statement of risk aversion; bitcoin is not usually the risk-averse answer because it's correlated with so many other risky things as well.

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

#269

Post by tzone »

There seem to be quite a lot of misunderstandings in this post. Not sure how familiar author really is with inner workings of crypto markets.

First thing first, is Tether sketchy? Yeah, pretty sketchy. But not for the reasons provided in the article.

USDT is the most traded asset against other crypto because it is the easiest vehicle to use for all sorts of arbitrage. USDT is available to trade with on every non-US exchange and it is the easiest asset to move around. As overall market size increases, it makes sense that demand for USDT is increasing because it is used in most of the trading/arbitraging/etc...

When looking for highest USDT/USD trading volume, it isn't Kraken that you should be looking at, but Curve. Curve is a DEX that does largest amounts of stable coin trading volume. Curve also has incredible liquidity depth. Right now, you can go there and exchange: 10 million USDT to 9.99 million USDC in a single transaction. USDC can be cashed out for USD very easily and is regulated not just by regular US regulators but also NY financial department too, which is the most aggressive regulator to ever exist probably. If you wanted to, you would be able to cash out billions of USDT to other NY regulated stable coins in a single day.

While USDT is certainly very sketchy, it is the dominant market player specifically because of its sketchiness (and due to it being the first one). USDT's independence from US regulators is a huge plus for most of the major non-US crypto players. Those players would be more worried about holding USD (or USDC) directly, because they are more worried about US government freezing their funds, rather than Tether going insolvent.

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

#270

Post by skybrian »

Infinitesimus wrote: post #173
huitzitziltzin wrote: post #161

Earlier quoted context omitted.

>House prices aren't included and we've seen prices balloon over the last decade Depending on exactly what you mean, this is not a great criticism of the CPI. House prices are excluded on purpose. Housing costs are included (including for housing equivalent to what an owner owns). CPI does include housing expenses: "The CPI represents all goods and services purchased for consumption by the reference population (U or…

Thanks for the extra context - I should have been more clear. CPI does capture OER and rental costs as you show. I get that mortgage costs and the like aren't considered as consumption ( rightly so ) but that makes the measure inaccurate when assessing prices people pay to live day to day. Rental prices are generally a more applicable indicator for most of the population as the BLS says but the rising costs of houses…

I think what you're missing is that many people are not paying market price for housing, because they bought their houses a long time ago. If they have mortgages, they were set by the home price when they bought.

CPI is an average. The people who have owned their own homes for years are dragging down the average for the cost of living. You can't get the cost of living that they have if you buy today.

Averages can mislead. It's like the old joke about average income in a room when Bill Gates is in the room.

By changing who is included in the average, it might be possible to construct a CPI that's more relevant to you?

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