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An anatomy of Bitcoin price manipulation

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Re: An anatomy of Bitcoin price manipulation

#261

Post by syntheweave »

tyrfing wrote: post #160
benreesman wrote: post #94

Eh 20-ish years ago the shit happening on Island and Archipelago would blow most people’s minds. Undocumented, conditional, non-displayed order types. Routine wash trading. Shear-but-don’t skin multi-venue arbitrage. The ECNs were the Wild West. Smoke-filled dark pools. Island and Arca are NASDAQ and NYSE now. But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have du…

With crypto these days alpha is still very easy since it's a small backwater. Microstructure is all complete bullshit (and has been as long as these markets existed), and leverage is basically unlimited. A huge sell order is more likely to indicate buying than selling, for example. At least liquidation cascades don't literally hit 0 like they have in the past, which is an improvement. There are also all sorts of unpu…

When I got into crypto back in 2013 I resolved myself to long-term holds with self-custody(before HODL was even a meme) precisely because I had seen how bad things got in pink sheet trading a few years prior and had the losses to prove it - I already had no faith in regulated markets, therefore I knew it was only going to be more blatant in crypto.

But if I held over the long term and carefully looked for the macro picture, I would sidestep manipulation, because it's ultimately the product of people sitting in front of a whiteboard trying to make their play happen within the span of the next business quarter, whereas my bet is on crypto as an asset class.

The plan has worked reasonably well; it's had huge ups and equally huge downs, so I have not quite "won" yet, but I have definitely not lost.

Re: An anatomy of Bitcoin price manipulation

#262

Post by muttantt »

benreesman wrote: post #94

Eh 20-ish years ago the shit happening on Island and Archipelago would blow most people’s minds. Undocumented, conditional, non-displayed order types. Routine wash trading. Shear-but-don’t skin multi-venue arbitrage. The ECNs were the Wild West. Smoke-filled dark pools. Island and Arca are NASDAQ and NYSE now. But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have du…

So, I take it you missed out on Bitcoin?

Re: An anatomy of Bitcoin price manipulation

#263

Post by 01acheru »

eric_cc wrote: post #248
01acheru wrote: post #230

Earlier quoted context omitted.

Maybe that you can buy bread with USD, or a house, or a car, or pay rent, or insurance, or gas, a coke on a vending machine, or stocks, or... well there are a lot of things you can do with USD that you cannot do with BTC right now.

This advantage for $USD is already beginning to vanish. Assuming it does, are there any other reasons to be bullish $USD?

First of all I’m not seeing this advantage “beginning to vanish”.

Even assuming it completely disappears we still need to solve:

- energy inefficiency of BTC

- extremely low number of transactions per unit of time

- a currency lacking the possibility of reversing transfers is not compatible with most legal systems

- full traceability of my wallet transactions open to the public

- volatility

And those are the first I can think of while paying little attention because I’m watching a movie…

Re: An anatomy of Bitcoin price manipulation

#264

Post by joering2 »

TrackerFF wrote: post #237
shawabawa3 wrote: post #225

Earlier quoted context omitted.

I personally don't value nfts highly but I'm in a circle with lots of rich crypto early adopters - they absolutely would pay $100k for a bored ape and would consider it a bargain. It's a real status symbol, just in a niche you don't understand. I feel the same way about $100k Patel Phillipe watches but I don't hear everyone talking about how those are only wash trades The platforms where these nfts are sold usually c…

The main difference here is that those paying for a pointer to the bored ape, are paying just that. Nothing more. Anyone can copy that bored ape image, and use it as they want. If you pay $100k for a Patek, that's your watch. It's a physical item - the only way someone's going to steal it, is by physically stealing it from you. Of course, one can argue up and down whether or why a Patek is worth $100k. But IMO it's e…

> If I had $100k

Precisely. For a starters you already told us you don't have type of "first comers crypto gains" like OP wrote about. I know a person that has over 10,000 bitcoins from early days, and he treat those as "fuck off coins". At this level you don't look at it as "gee, whos gonna pay $100k for some easy to copy pixels!", you look at it like "oh shit Eminem just dropped $400k on some pixels, let me use some of my fuck off coins to get on board - who knows this thing can quadruple in 10 years. Or go to zero. In both scenarios, whatever". Hardly people at this level care about whether they lose money or not. The point is to be a part of the "movement", to be part of the deal that's going. Its adrenaline rush.

The point is, if it goes down to 0 they couldn't care less. Its a fuck off coins to start with.

Re: An anatomy of Bitcoin price manipulation

#265

Post by jcranmer »

Tenoke wrote: post #255
jcranmer wrote: post #242

Earlier quoted context omitted.

If you own literally all of the stock in Tesla... how could the stock crash? There's no stock being traded for its value to change. Of note, there are examples in the past of companies going private without falling apart--Dell is the most notable example I can think of off the top of my head.

>If you own literally all of the stock in Tesla... how could the stock crash? There's no stock being traded for its value to change. The price will plummet in the sense that nobody would bid to buy it for anywhere as much as they would before the event.

If nobody is bidding, there's no asks to cause the price to go down. More likely, someone buying all of the stock either a) intends to take it private, at which point there is no more stock anymore or b) intends to fold it into another company, at which point there is no more stock anymore. (Of course, the valuation would likely go down anyways, because people usually pay a premium to buy all of the stock.)

Re: An anatomy of Bitcoin price manipulation

#266

Post by notch656a »

preseinger wrote: post #217
notch656a wrote: post #204

Earlier quoted context omitted.

No true [reasonable] Scotsman would believe monetary policy by fed is manipulation. Got it; your definition of unreasonable is so broad that it is effectively meaningless.

The Fed has a mandate to act in the broad interest of society. It doesn't manipulate currency by any non-conspiratorial definition of manipulate, no.

Ah I see, it's not manipulation because you perceive the fed as acting virtuously.

That's actually not the mandate of the fed.

The mandate is: The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

Whether prices are currently stable or interest rates are moderate are a lively source of discussion. Regardless of opinion here, I think you have a generous definition of manipulation to exclude acts operating under a nominal mandate of some vague interest of society (and I may add many other acts made under pretext of interest in society are source of outrage on HN).

Re: An anatomy of Bitcoin price manipulation

#267

Post by freedomben »

mtremsal wrote: post #251
freedomben wrote: post #216

Earlier quoted context omitted.

It seems pretty hard to me to look at charts of inflation, income inequality, and quantitative easing and compare them to stock market values and not see how the system is allowing the rich and powerful to use inflation to suck money away from everyone not heavily in the market (especially the poor as inflation is a highly regressive tax) and into their own pockets through increases in valuation. And then look at the…

> inflation is a highly regressive tax Is it? I think a takeaway from Piketty's book was that inflation was one of the rare factors that slowed down or reversed wealth inequality. Intuitively it would make sense that people drowning in debt benefit from (moderate) inflation, especially if low wages get bumped in the process.

Yes that's a great point, as long as debt interest rates are fixed, inflation is good for people in debt. It's especially great for most home owners, but home ownership is largely a middle-class luxury.

But that said a lot of the really bad debt that poor people have is variable rate anyway (and usually outrageous) like credit cards, payday loans, etc.

Re wages: they tend to be sticky. Wages will get bumped up but it's almost always after the fact as a result of government reported inflation rates. So people have been feeling the inflation for a while by the time wages "catch up." And the government inflation rates are notoriously underestimates so in reality wages tend to stagnate and "drop" (they are the same number but buying power has dropped) until market pressures force them to rise.

It would definitely be interesting to hear about past examples where income inequality improved under inflation. In Weimar and Venezuela that doesn't seem to have happened. The poor there end up starving and using leaves for toilet paper. The really wealthy have access to international investing so they're protecting against inflation.

Re: An anatomy of Bitcoin price manipulation

#268

Post by fragmede »

benreesman wrote: post #150
ckastner wrote: post #136

Earlier quoted context omitted.

> People who haven't worked in financial markets have a hard time appreciating how deep the muck can get. That's the main reason why I find the battle cry of "decentralization" so comically ironic. No government can control crypto, how awesome and empowering! When the truth is that the vast amount of control that we've seen develop in the past century (and especially in the past two decades) were just to protect peop…

You have a lot more faith in the IPO underwriting process than I do. They don’t call it a “pop” for nothing.

perfect is the enemy of the good. it's not an infallible process, but some checking is better than zero

Re: An anatomy of Bitcoin price manipulation

#269

Post by aeturnum »

eric_cc wrote: post #190
ckastner wrote: post #136

Earlier quoted context omitted.

> People who haven't worked in financial markets have a hard time appreciating how deep the muck can get. That's the main reason why I find the battle cry of "decentralization" so comically ironic. No government can control crypto, how awesome and empowering! When the truth is that the vast amount of control that we've seen develop in the past century (and especially in the past two decades) were just to protect peop…

> the truth is that the vast amount of control that we've seen develop in the past century (and especially in the past two decades) were just to protect people from said muck. Think of the children! Do you really believe the vast amount of centralized control is to protect the poor stupid people? I think this is an incredibly naive and gullible take. The vast amount of controls in place are to solidify power amongst…

I think the gullible take is to imagine that the wealthy and powerful maximize their gains in an unstable system. They don't care about stupid people, but they care about the instability that comes with people getting taken in by scams or bad deals.

People who are currently at the top of a power structure have an interest in stability. One way of doing that is allowing people further down the power structure to profit in a limited way from the system. This both won't change anyone's relative position, and is a genuine improvement for all parties.

My other critique of "rules are about protecting the rich" is that the counter-factual of no rules does hurt the rich, but it hurts everyone else as well. It just doesn't seem true that striking down rules against manipulating markets is helpful to the non-rich, so it feels like cutting off your nose to spite your face.

Re: An anatomy of Bitcoin price manipulation

#270

Post by freedomben »

wpietri wrote: post #233
freedomben wrote: post #216

Earlier quoted context omitted.

It seems pretty hard to me to look at charts of inflation, income inequality, and quantitative easing and compare them to stock market values and not see how the system is allowing the rich and powerful to use inflation to suck money away from everyone not heavily in the market (especially the poor as inflation is a highly regressive tax) and into their own pockets through increases in valuation. And then look at the…

> look at the barriers that regulation throws against the average person to keep them from the most lucrative investments (like required accreditation) If anything, the accredited investor standard is proof that regulation doesn't favor the powerful. Taken as a whole, those aren't the most lucrative investments. They're the riskiest. The whole theory behind it is that if somebody is rich enough we won't try to protec…

> Taken as a whole, those aren't the most lucrative investments. They're the riskiest.

I'm not an accredited investor but I did mountains of research on it years ago, and most of the time risk does correlate with reward. Also most of the most lucrative investments where people can get really rich are startup investments, which are off limits to most people who aren't already rich. There is definitely a ton of risk in startups, but also so much reward.

I think a better system for protecting people would be education/certification based. If the person truly understands the risk, they shouldn't be stopped by the government from investing IMHO.

I think the reason many of the richest people want inflation to stop is because it forces them into riskier investments in order to stay ahead of inflation. They care a great deal about maintaining wealth and high inflation erases a big class of "safer" investments from their list of options.

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