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Worries Grow That the Price of Bitcoin Is Being Propped Up

nytimes.com

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Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#111

Post by FiveSquared »

jnordwick wrote: post #103

Here a possible explanation on what Tether is doing and the economics behind why there is such an incentive behind pump and dump BTC. I think they are running a currency board pegging USDT to USD, and then using the BTC gained to push up BTC even further. Part of the idea of a currency is a stable value, that means supply and demand need to be matched. With a fixed quantity such as all the common cryptos, when demand…

Your comment is pure gold. Get it? To be serious, that was one of the best Hn comments I read in a while.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#112

Post by astrodust »

JonnyNova wrote: post #92
throwaway30yo wrote: post #60

Could be the best buying opportunity of the year. As someone involved in bitcoin since 2012, these cycles are pretty standard. It went from $1000 to around $250 iirc at one point and recovered. No reason it cant go from $20000 to $5000 and recover. It may take many years, but its not as if all crypto will die overnight. I see crypto being big in the more distant future, 15-20 years away when many of the problems are…

> No reason it cant go from $20000 to $5000 and recover. There are plenty of reasons why it could never recover. The previous cycles happened with a very different environment and context for bitcoin. This time Bitcoin has just hit mainstream. This cycle will very likely crush the mainstream's faith in Bitcoin to where it will never recover.

If the only reason it's stratospheric right now is manipulation then it could be manipulated in the future to "recover".

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#113

Post by bby »

throwaway30yo wrote: post #60

Could be the best buying opportunity of the year. As someone involved in bitcoin since 2012, these cycles are pretty standard. It went from $1000 to around $250 iirc at one point and recovered. No reason it cant go from $20000 to $5000 and recover. It may take many years, but its not as if all crypto will die overnight. I see crypto being big in the more distant future, 15-20 years away when many of the problems are…

I see this as one of the best times to short CME/CBOE BTC futures in the short/medium term. The market is VERY tilted towards being long, in fact, everyone is long crypto. It's likely people will sell a little bit into their losses and if a more major correction occurs, there is a HIGH risk of panic selling. There is so much uncertainty with Tether/Bitfinex that I'm surprised it's "hodling" 9000 still.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#114

Post by JonnyNova »

FiveSquared wrote: post #106
JonnyNova wrote: post #92

Earlier quoted context omitted.

> No reason it cant go from $20000 to $5000 and recover. There are plenty of reasons why it could never recover. The previous cycles happened with a very different environment and context for bitcoin. This time Bitcoin has just hit mainstream. This cycle will very likely crush the mainstream's faith in Bitcoin to where it will never recover.

That’s true, but however, what if Bitcoin goes on like the Video Game Crash of 1983, the Second AI Winter, etc. https://en.m.wikipedia.org/wiki/AI_winter https://en.m.wikipedia.org/wiki/Video_game_crash_of_1983

Apples to oranges, Bitcoin isn't cryptos as a whole. Future cryptos will absolutely succeed Bitcoin.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#115

Post by tomtimtall »

paulgb wrote: post #34

I find it weird that people assume this is intentional market manipulation. If they are in fact fraudulent (I think they are), being able to print money is a business model in itself; you don't need to intentionally manipulate the market (but could end up doing so accidentally)

It looks like they might have used the money that should have backed tether to buy bitcoin, and then whenever the market looked like it might be correcting they issued more to stop it from falling and buy the dip.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#116

Post by ceejayoz »

Hermel wrote: post #104
simias wrote: post #84

The somewhat ironic part is that one of the core concepts of Bitcoin is that you can't counterfeit it. You can mathematically prove how many coins you own, if somebody sends you 3 BTC then once it's been validated on the blockchain you know that the money is now yours, they can't have lied, it can't bounce like a cheque Except this Bitfinex thing shows that while an amount of bitcoin can't be manipulated or counterfe…

I would guess that the traders who hold millions worth of tether have a good business relationship with Bitfinex and have more information than is publicly available. And that information seems to make Tether more trustworthy. A reason why they don’t want to make their bank statements public is that their bank fears being cut off from USD clearing once it gets known that they are handling Bitfinex funds. So there are…

They don't have to make the name of their bank public.

They just have to prove it exists to their auditor. Who just severed ties with them and deleted any mention of them from their website.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#117

Post by JonnyNova »

astrodust wrote: post #112
JonnyNova wrote: post #92

Earlier quoted context omitted.

> No reason it cant go from $20000 to $5000 and recover. There are plenty of reasons why it could never recover. The previous cycles happened with a very different environment and context for bitcoin. This time Bitcoin has just hit mainstream. This cycle will very likely crush the mainstream's faith in Bitcoin to where it will never recover.

If the only reason it's stratospheric right now is manipulation then it could be manipulated in the future to "recover".

That wrongfully assumes the whoever is (if it is being) manipulating Bitcoin now will have an incentive to run another scheme again in the future.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#118

Post by artursapek »

rebuilder wrote: post #23

Watch for a premium on the BTCUSD rate on Bitfinex. That'll be the market believing there's a significant risk of insolvency. I'm surprised there's no premium yet.

You can also watch confidence in USDT directly by watching its USD price on Kraken:

https://trade.kraken.com/kraken/usdtusd

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#119

Post by paulgb »

JonnyNova wrote: post #110
paulgb wrote: post #34

I find it weird that people assume this is intentional market manipulation. If they are in fact fraudulent (I think they are), being able to print money is a business model in itself; you don't need to intentionally manipulate the market (but could end up doing so accidentally)

People aren't assuming they are engaging in fraudulent behavior - there is evidence showing that they are. All they have to do to show they aren't is provide an audit.

Yes, I'm responding more to takes like this from the article:

> “My personal biases make me inclined to believe that Bitfinex is not using Tether to manipulate the price of Bitcoin,” said Jeremy Gardner, a managing partner at the investment firm Ausum Ventures. “If they have attempted to do so, which would be deeply concerning, it’s hard to imagine that such fraudulent issuance at its current volume could single-handedly buoy the price of Bitcoin.”

My point is that being skeptical about their ability to manipulate the market in a meaningful way and make a profit doesn't mean they don't have a profitable motivation for engaging in fraud.

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