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$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

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Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#251

Post by mgfist »

jliptzin wrote: post #186
lumost wrote: post #129

Earlier quoted context omitted.

The fact that crypto is correlated with tech stock valuations should be raising eyebrows. Flash back a few years and the hypothesis that bitcoin would hedge inflation/fiat depreciation was standard. If BTC is correlated with equities, why not just hold productive equities?

I never understood the argument why crypto was a good store of value. Sure, it’s an ingenious new transactional system, making global payments mostly frictionless, etc, but that’s true whether the value of 1 Bitcoin is $1 or $50,000. If everyone’s just converting back to fiat anyway, only keeping enough BTC transiently to settle transactions, why hold it long term?

Well it's actually a pretty bad transactional currency because it costs so much to transfer btc. So it's kinda the opposite, where people mostly hold it instead of transacting. The argument for a store of value is that of gold but easier to store and transfer, better security etc.. Whether it's a good one is for you to judge.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#252

Post by DonHopkins »

joosters wrote: post #4

"Sold" It's hard to show that they really sold these coins. Certainly, the LFG transferred the coins to some different exchanges. But did they truly sell them? If I was running a dodgy ponzi scheme and saw it collapsing catastrophically, I don't think I'd be throwing good money after bad trying to futilely patch it up. Much better to stash the remaining assets away somewhere and personally cash out later on. Also, “I…

>In a sense, the market is going to take that as kind of bullish.

The Levenshtein distance from bullish to bullshit is only 3.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#254

Post by zekrioca »

throwaway1777 wrote: post #6
latchkey wrote: post #2

I'm kind of amazed that the Bitcoin price wasn't affected more given this event as well as the larger macro events with the stock markets, Fed and inflation.

A lot of speculation that not all of this btc was actually sold. Sure it was transferred to an exchange but know one really knows what happened after that.

In the above sentence, I think the first "know" should really be "no" :)

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#255

Post by NovemberWhiskey »

Karunamon wrote: post #199
matheusmoreira wrote: post #179

Earlier quoted context omitted.

> If someone loans you BTC, the supply of BTC has not increased. True when someone does it, false when a fractional reserve bank does it. When someone loans money to someone else, money physically changes hands and there is no concept of a reserve. Banks are able to maintain the illusion of full reserves even though they operate in a state of perpetual insolvency.

Please explain the mechanism by which a "bank" is able to transfer to you an amount of BTC that they do not have wallet control over? This is a critical difference. A bank can loan you fiat money that they do not physically have, with the almost always correct assumption that most people won't want to convert that database entry into cash at the same time. This is not possible with bitcoin. Either the bank has the co…

>Please explain the mechanism by which a "bank" is able to transfer to you an amount of BTC that they do not have wallet control over?

BTC that's in an offline wallet is like cash under the bed; and you're right that no-one is lending money that they have under the bed.

However, a significant number of BTC owners don't keep their money in their own wallets - they keep it at an exchange, which almost certainly commingles it with other owners in shared wallets.

You can certainly take a maximalist position here and assert that the exchange is the real owner, because they have the private keys. The fact of the matter is that the real world includes a difference between legal and beneficial ownership; and has done since well before the existence of fiat currencies - because it's useful.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#257

Post by low_tech_love »

“Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini”

Oh yeah sure they saw their coin going to s*%t and thought “yeah let’s just throw away a couple billion dollars just so people won’t think we are scammers”. Sure. The Vatican has started a process to canonize these saints.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#258

Post by simmerup »

PragmaticPulp wrote: post #207
zrail wrote: post #61

Earlier quoted context omitted.

> The rumor mill has it LFG directly rescued a few whales in the first sign of crisis. This is a very serious accusation I'd urge no one proclaim without definite proof. What would it change to have that information? Afaict none of this is regulated in any regard so if that happened, would there be any impact what so ever?

> Afaict none of this is regulated in any regard so if that happened, would there be any impact what so ever? Many laws and regulations that were written before cryptocurrency existed still apply to cryptocurrency. People can't do an end-run around existing laws by wrapping crimes in cryptocurrencies and pretending laws don't apply to them.

Apply but aren’t enforced

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#259

Post by Salgat »

celestialcheese wrote: post #143
onlyrealcuzzo wrote: post #40

Earlier quoted context omitted.

Only 3.87% of Tether was backed by dollars: https://siliconangle.com/2021/05/13/tether-releases-reserve-... So it could drop pretty far.

That's a bit old - https://tether.to/en/transparency/#reports Closer to 50% tbills and cash. All caveated with if you trust MHA Cayman auditors. The other 50% could be anything, and likely sketchy as they are chasing yield and extremely cagey about revealing anything about their holdings.

I definitely don't trust their auditor, they're based out of the cayman islands and don't have the best reputation. https://www.coindesk.com/markets/2022/01/26/tethers-new-acco...

It's funny because this is pretty trivial stuff to audit for a 3rd party, yet they only open their books to a private company of their choosing with questionable background. It's obvious what's going on. This is the biggest issue with crypto traders, they're too damn gullible as long as the news fits their agenda.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#260

Post by rory »

gizmo686 wrote: post #144

I'm confused. I understand wanting to have a reserve fund to help maintain a peg. National currencies do this as well, including selling their reserves to prop up their own currency when needed. However, why would a stablecoin put its reserved in Bitcoin; an asset that is highly correlated with the entire crypto ecosystem, and highly volatile relative to the asset against which they want to maintain a peg.

They had a small amount of other "stablecoins" as well [0]. I'm guessing it was some mix of an ideological opposition to holding actual USD and a desire to speculate on the ecosystem, which the market allowed for a time.

[0] https://twitter.com/LFG_org/status/1526126703046582272

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