Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
1–10 of 271 posts
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#2This is pretty much spot-on. Almost all of the 'value' that Bitcoin currently has is hype and insane over-inflation. I weep for those that won't be able to cash out on the exchanges when the price crashes, and they lose all their money.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#3This is pretty much spot-on. Almost all of the 'value' that Bitcoin currently has is hype and insane over-inflation. I weep for those that won't be able to cash out on the exchanges when the price crashes, and they lose all their money.
I'm not sure if it is an illusion of safety, because the infrastructure around Bitcoin (which itself seems safe) is remarkably better now than it was 5 or 6 years ago. This is nothing like how wild it was then, so in comparison, it seems like it is almost regulated.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#4Why is the fact that arbitrage is harder with btc a disadvantage? And the fact that the "price" reflects recent sales rather than future sales seems, well, obvious, and identical to other securities/commodities.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#5Don’t all of the complaints about exchange rate and market cap apply to virtually any other item that is traded? Spread exists in forex and stock markets. Market cap is extremely commonly cited for stock markets.
Sure, the effects may be stronger in Bitcoin due to its higher volatility, lower volume, etc., but that should be the author’s argument, instead of “if you don’t know the basic Finance 101 definitions of some common terms, then you might get confused.”
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#6Don’t all of the complaints about exchange rate and market cap apply to virtually any other item that is traded? Spread exists in forex and stock markets. Market cap is extremely commonly cited for stock markets. Sure, the effects may be stronger in Bitcoin due to its higher volatility, lower volume, etc., but that should be the author’s argument, instead of “if you don’t know the basic Finance 101 definitions of som…
I'm a newbie to the world of crypto currencies. What concerned me more is the bit about "wash trades". I can accept the spread, but there is truth in the article when it comes to trading practices that probably would be largely mitigated in the presence of a regulator.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#7Don’t all of the complaints about exchange rate and market cap apply to virtually any other item that is traded? Spread exists in forex and stock markets. Market cap is extremely commonly cited for stock markets. Sure, the effects may be stronger in Bitcoin due to its higher volatility, lower volume, etc., but that should be the author’s argument, instead of “if you don’t know the basic Finance 101 definitions of som…
> Don’t all of the complaints about exchange rate and market cap apply to virtually any other item that is traded?
> Market cap is extremely commonly cited for stock markets.
Yes.
Spreads usually depend on volume--high-volume securities tend to have a lower spread because there's a lot of market participants.
More established markets often have market makers (entities with simultaneous bids and asks) and arbitrageurs who make money off spreads between different exchanges. I usually look at this spread and arbitrage (which I'll get hit with when I buy or sell) as the price of having a liquid asset. For stocks, it tends to cost relatively little.
Market cap for Bitcoin is complicated because it's not known how many Bitcoins have been lost.
Ever since people stopped storing stock certificates in safe deposit boxes, this hasn't been an issue for equities. Even then, companies kept a ledger with ownership.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#8This is pretty much spot-on. Almost all of the 'value' that Bitcoin currently has is hype and insane over-inflation. I weep for those that won't be able to cash out on the exchanges when the price crashes, and they lose all their money.
I'm not sure if it is an illusion of safety, because the infrastructure around Bitcoin (which itself seems safe) is remarkably better now than it was 5 or 6 years ago. This is nothing like how wild it was then, so in comparison, it seems like it is almost regulated.
Says who? Most of the popular exchanges don't trade in USD, they trade in Tethers, which only have a promise, not a basic audit, that they are backed by actual USD.
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#9Fortunately, USD balances on GDAX are FDIC insured for US citizens [0]. I accept that I might not be able to cash out of cryptos in an emergency, due to liquidity or transaction times or something else, but I sure as hell will be able to get out any USD I might have in GDAX, which is a big confidence boost to me. They claim that all crypto deposits are "fully insured" as well, by a "syndicate of insurers through Lloyd's of London".
[0]: https://support.gdax.com/customer/en/portal/articles/2689803...
Re: Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional
#10Don’t all of the complaints about exchange rate and market cap apply to virtually any other item that is traded? Spread exists in forex and stock markets. Market cap is extremely commonly cited for stock markets. Sure, the effects may be stronger in Bitcoin due to its higher volatility, lower volume, etc., but that should be the author’s argument, instead of “if you don’t know the basic Finance 101 definitions of som…
(author here) This is targeted to the general public, who do actually need Finance 101, because they really don't know what they're getting lured into by the mindlessly positive articles and headlines in the mainstream press. Mostly written by people who don't understand either.
I actually consider it seriously unethical to market cryptos as an investment to retail investors - they just do not understand the insane levels of risk, including the actual exchange as a threat. And yes, I know what Bitcoin's pitch is. I still think it's unethical in practice, and this bubble is going to show why.
Market cap makes more sense for a stock, because it's in the range of the value for a company, and a whole company is something that does get bought and sold. This idea doesn't make any sense for a crypto.