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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

#261

Post by NovemberWhiskey »

matheusmoreira wrote: post #179
Karunamon wrote: post #145

Earlier quoted context omitted.

Because there's no such thing as unbacked BTC. You either have the UTXOs pointing at an address you hold the keys for, or you do not. If someone loans you BTC, the supply of BTC has not increased.

> 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.

So is Binance a bank, when it offers 5% APY Bitcoin savings accounts? Or is it perhaps a shadow bank, which is to say an entity that creates money supply through credit without regulation?

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

#262

Post by mcv »

DonHopkins wrote: post #252
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.

Honestly, that was what I read at first. Only when I read your comment, did I realise it said "bullish".

I'm not sure my initial reading was really incorrect, though.

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

#263

Post by lkrubner »

lamontcg wrote: post #108
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.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

"everything is a bit oversold right now on negative emotions"

No!!!

The Fed is raising rates. That is reality. That is not an emotion. That is absolute economic fact. Inflation is high and will remain high for at least a year (maybe longer). The period from 2008 to 2022 is going to be remembered as an abnormal period when we experienced abnormally low rates. The low rates fueled speculation, and bid up certain stocks and assets.

The era of low rates is over. It is possible that you might live another 100 years and never again see a 14 year stretch where rates average as low as they did from 2008 to 2022.

Emotions? No. These are not emotions. Rising rates are a material fact that people need to adjust to.

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

#264

Post by scoopertrooper »

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.

They only promise that their treasure bills "have a maturity of less than 90 days". That won't help them much if there is a run on the Tether bank.

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

#265

Post by throwaway92394 »

zrail wrote: post #61
lvass wrote: post #42

Earlier quoted context omitted.

>So it doesnt matter whether we get records from exchanges It matters a lot. 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. If they concentrated their usage of the reserves to keep the peg earlier, possibly anyone selling below $1 would take an immediate loss and no noticeable depeg would even happ…

> 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

I'm not saying they're applicable here - but off the top of my head, money laundering, taxes, and fraud regulations still apply to crypto (at least in the US). The moneylaundering/taxes are rather explicitly stated, the fraud regulations apply regardless of what the thing is.

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

#266

Post by woodruffw »

thebean11 wrote: post #250
woodruffw wrote: post #208

Earlier quoted context omitted.

> Why can't non-institutional actors achieve the same level of privacy? Non-institutional actors are transacting over an immutable public ledger. Institutional actors are transacting via backchannels. In other words: the cryptocurrency transaction space is "schizophrenic": the traffic that supports high valuations is not settled on the chain itself, but via gentlemen's agreements. Non-institutional actors could do th…

> Institutional actors are transacting via backchannels. As in, they are keeping funds on centralized exchanges? Users can do the exact same thing if they want, not sure I get your point.

See the original comment: the point is that there's no actual way to verify the central claim ("$3B in Bitcoin was sold [...]"). We're expected to take everyone's word for it. This is in marked contrast to how two arbitrary users are expected to transact via a blockchain.

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

#267

Post by arcticbull »

lkrubner wrote: post #263
lamontcg wrote: post #108

Earlier quoted context omitted.

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

"everything is a bit oversold right now on negative emotions" No!!! The Fed is raising rates. That is reality. That is not an emotion. That is absolute economic fact. Inflation is high and will remain high for at least a year (maybe longer). The period from 2008 to 2022 is going to be remembered as an abnormal period when we experienced abnormally low rates. The low rates fueled speculation, and bid up certain stocks…

> Inflation is high and will remain high for at least a year (maybe longer).

Is it? Month over month inflation numbers are only slightly elevated, in the annualized 3% range. This isn't particularly high - the high inflation already happened, it's over.

CPI and PPI numbers both came in good. PPI of particular note, services were up 0% month over month, and commodities 1.3% for a blended 0.56% (in line with expectations). Commodities of course are likely to correct hard and fast once the geopolitical situation resolves.

The market is forward looking, so don't get stuck on a dead narrative!

> The era of low rates is over.

I'm not sure we know this either. If the hikes play out, we'll land around what, 2-3% for the fed funds rate? That's low, historically. And that's a big if, IMO, since inflation is showing signs of being quite well controlled again, and the Fed's goal isn't to achieve a specific funds rate - just low inflation and high employment. High funds rate hurts the employment goal.

It's fun to speculate but important to remember, you're just speculating. So am I. There's no certainty here, and it's pretty easy to construct a compelling counter-narrative.

All we know for sure right now is the Fed funds rate is 1%.

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

#268

Post by actionablefiber »

izzydata wrote: post #210
Enginerrrd wrote: post #171

Earlier quoted context omitted.

>I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. ...Things have corrected SLIGHTLY from an absolutely historic bubble and you think it's OVER sold? Meanwhile, we have significant inflation, rising interest rates, supply shocks that still haven't been sorted out and signs of economic slowdown. Prices have been out of touch with reality for a long t…

Stock prices are back around where they were before the pandemic. It may have already been overvalued at that time, but perhaps it is a level of overvalue that people are comfortable with as we were already there before the system got flooded with money.

> Stock prices are back around where they were before the pandemic.

This is not true, at least not for the U.S. stock market. Market indices are still up 20-30% over pre-pandemic levels.

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

#269

Post by lbotos »

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?

> If everyone’s just converting back to fiat anyway, only keeping enough BTC transiently to settle transactions, why hold it long term?

People aren't doing this now though.

They are buying bitcoin and holding (hodl) or they are trading that bitcoin for other crypto.

I think most people aren't using it as a currency, more so speculation

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

#270

Post by namdnay »

eric_cc wrote: post #205
snovv_crash wrote: post #201

Earlier quoted context omitted.

Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing li…

> Luna crashed because people lost trust in it. No. It crashed because trillions of tokens were created rendering each token worthless.

You have the chronology wrong. The tokens were created because the price kept slipping, and the more the price slipped the more tokens were printed, the more people panicked etc
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