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An anatomy of Bitcoin price manipulation

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Re: An anatomy of Bitcoin price manipulation

#321

Post by fleddr »

spoiler wrote: post #173
fleddr wrote: post #106

Earlier quoted context omitted.

I mean known in the crypto community. Surely a random person in the street has never heard of most crypto celebrities, but that wasn't my point. The monkey NFTs that you mention are a perfect example, because they are the best known project after cryptopunks. Massive media reach, real world celebrities and almost all crypto influencers are in. That's what I mean when I say they didn't come out of nowhere. These high…

> I mean known in the crypto community. Surely a random person in the street has never heard of most crypto celebrities, but that wasn't my point. It might be due to my misconceptions about the crypto space then, but I always assumed people just kinda "pop up" relatively often (even if we just constrain this to within the crypto community). The whole crypto space seems to be very very "fast moving" to me, if that mak…

I had a deeper look into it, and it looks like you're right, the apes actually are an example of overnight success: https://www.rollingstone.com/culture/culture-news/bayc-bored...

So it's a bad example from my side to explain what would be a more planned launch, which may include a setup with marketplaces to get it on the homepage, and the paying of crypto influencers to shill the project.

Your perception on crypto gaming is correct. It's a hot market right now where many believe we're at the very beginning. Everybody wants to be early so they buy any game-related shitcoin.

Re: An anatomy of Bitcoin price manipulation

#322

Post by Liron »

dheera wrote: post #229
fullshark wrote: post #165

Earlier quoted context omitted.

Firms used to give out dividends, that would make it easier to claim it had intrinsic value (future cash flows discounted). Now it appears the only intrinsic value is how much another firm would pay to acquire the company and do X with it.

Dividends are worthless. Stocks go down every time they give out dividends so you never really make anything. And you will never beat inflation with dividends. Dividend investing is stuff of 1980's folklore. These days it's all about modelling and executing on hype. We're entering an era where hype is intrinsic value. I'm not advocating for a world like that, but it's the world we live in now whether we like it or no…

No… Your claims are typical of how people talk during peak bubbles. It's very similar to how people talked about buying any tech IPO stock in 1999, even when the companies had hopeless business models. The way I expect they'll get disproved is simply when the market cycle turns. Right now there's a powerful illusion that asset prices have become unmoored from expected returns, but at some point macroeconomic conditions change and the demand to liquidate the assets becomes significantly higher than the demand to keep buying them at their previous prices. Like if S&P P/E multiples begin a steady slide from 30 to 15 due to less liquidity in the economy, everyone's stock portfolio will feel like a bloodbath. In such an environment, demand for all these crazy coins also dries up and prices plummet (so much for being a "store of value"), since there are no cashflows that reward the purchasers and set a floor on the price; it's entirely - as you say - a function of the current “hype” i.e. buy-side demand level.

Re: An anatomy of Bitcoin price manipulation

#323

Post by chollida1 »

stickfigure wrote: post #307
10x-dev wrote: post #139

Earlier quoted context omitted.

How is digital currency, in general, anonymous? Bitcoin records all of your transactions, publicly, essentially forever. If at any point in time there is a way to tie your identity to _any_ of the transactions made in your lifetime, then all of your other transactions get deanonymized retroactively. Maybe you made a mistake, maybe a bug is introduced into the Bitcoin software, maybe the government passes a new law, e…

The relationship between Bitcoin and Monero is symbiotic. Bitcoin brings legitimacy and (for crypto) security. Hedge funds, corporations, and other big money can hold bitcoin. Yet it's easy enough to convert between BTC and XMR, so they are effectively fungible.

> Yet it's easy enough to convert between BTC and XMR, so they are effectively fungible.

That's not what we mean in finance when we say fungible.

https://www.investopedia.com/terms/f/fungibility.asp

Re: An anatomy of Bitcoin price manipulation

#324

Post by chollida1 »

pakitan wrote: post #142
shawabawa3 wrote: post #133

Earlier quoted context omitted.

> but there is no revenue for a digital currency Isn't there? Ethereum kind of has revenue in that transaction fees for smart contract execution are burned (effectively a stock buyback) It has around ~$19B in revenue extrapolated at the current rate (although it's issuing more than $20B a year for now, planning to reduce issuance some time later this year)

That's like MSFT issuing MicrosoftDollars to pay their dividents.

Its not uncommon to pay dividends in comapany stock.

Re: An anatomy of Bitcoin price manipulation

#325

Post by anonymoushn »

ckastner wrote: post #136
wpietri wrote: post #121

Earlier quoted context omitted.

I truly appreciate your experience and cynicism here. People who haven't worked in financial markets have a hard time appreciating how deep the muck can get. Which makes them especially valuable suckers for the unregulated markets.

> 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…

It's really great that people who don't have tens of millions of dollars to burn can't access L2 market data. It does a lot to promote fair and efficient markets.

Re: An anatomy of Bitcoin price manipulation

#326

Post by sjtindell »

jayd16 wrote: post #228
sjtindell wrote: post #181

Earlier quoted context omitted.

Do you consider running a poker table a “real business”? Assuming there were no addicts present, what about a casino? Is that “real”?

Isn't a casino with no addicts just an arcade? I'm not sure what your point is, though. The addicts are pretty inextricable.

Perhaps let's just talk running a poker table. It's a platform where people can play a zero sum game against each other. To me, that's what cryptocurrency is. People want to play these games. That, to me, is real value.

Re: An anatomy of Bitcoin price manipulation

#327

Post by fleddr »

alecst wrote: post #113
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…

A counterpoint would be that what some call the intrinsic value is the expected future share price based on expected future revenues. There might or might not be future revenue for SNAP, but there is no revenue for a digital currency. But I do think digital currency has intrinsic value, in that for now, it affords you anonymity to commit crimes in a way that ordinary currency does not. I’m not happy about it, but thi…

Cash is used for more crime than crypto. London city pretty much is the epicenter of money laundering and financial crime.

Re: An anatomy of Bitcoin price manipulation

#328

Post by Panzer04 »

solveit wrote: post #281
kaashif wrote: post #152

Earlier quoted context omitted.

> Well unless they pay no dividend, have dual-class share structure, and IPO without a profitable quarter. What’s a share of SNAP entitle you to exactly? Ah right, you think someone will buy it for more. I think the idea would be like what happened to Apple: they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividen…

> they eventually grew so much, became so successful, accumulated huge piles of cash bigger than they could possibly spend, that they had to start paying a dividend. What mechanism forces this?

Investors forcing the replacement of shareholder-unfriendly management. US companies tend to be better at returning cash to shareholders by buyback or dividend than many other locations (probably half the reason Asian shares are often cheap, they hold loads of useless money on the balance sheet)

Re: An anatomy of Bitcoin price manipulation

#329

Post by lvs »

alecst wrote: post #113
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…

A counterpoint would be that what some call the intrinsic value is the expected future share price based on expected future revenues. There might or might not be future revenue for SNAP, but there is no revenue for a digital currency. But I do think digital currency has intrinsic value, in that for now, it affords you anonymity to commit crimes in a way that ordinary currency does not. I’m not happy about it, but thi…

> there is no revenue for a digital currency.

These debates get rehashed ad nauseum, but of course the same could be said of the USD, GBP, etc.. Currencies are exchanged to meet debt, contract, or tax obligations denominated in a particular currency. Trade is the common mode by which a currency has to be exchanged. For instance, if an American company buys British goods denominated in GBP, it will either exchange USD for GBP to close the transaction or borrow GBP that it must similarly pay back in GBP. The net result in either case is that it buys GBP and sells USD. If the UK government levies a duty/tax on the transaction, that too generates a demand for GBP requiring an exchange.

Now it is of course somewhat unclear whether a significant economy exists in crypto that generates debts/taxes denominated in crypto that would create a steady/cyclical demand for crypto. It requires either that some productive center of the economy is demanding payment in crypto, or that governments are demanding tax payments in crypto, or both. If either is simply willing to accept multiple possible currencies, then demand flows through the most favorable path. Perhaps a modicum of anonymity is part of this calculus, but costs, difficulty, and risks also probably play a role.

My point is that the economic analysis of your claims is more complicated. Buying currency serves a classical finance purpose that is unrelated to your analysis of equities. I think the climate and regulatory consequences of crypto are very serious, but I generally agree with those who say the credit/payments industry is predominantly parasitic. But those who say that no mechanism should exist to control the money supply based on economic conditions are just charlatans and simpletons and should be ignored.

Re: An anatomy of Bitcoin price manipulation

#330

Post by fleddr »

Daishiman wrote: post #305
felipeko wrote: post #288

Earlier quoted context omitted.

It is a good thing to be encouraged to saving instead of spending. No one needs incentive to spend. You will spend if you have plenty to spend. Having a currency which gains in value will take you there.

There is no modern economic argument to favor saving over spending. What you're saying runs counter to pretty much all economic theory from any ideological camp you could think of.

Economic theory has run this world into the ground in just a single human lifetime. A system that maximizes consumption is insane.
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