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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

#181

Post by usrusr »

ulrikrasmussen wrote: post #26
1123581321 wrote: post #6

What’s the difference between legitimate technical trading and propping up a market? Is it just volume?

This article talks about suspicions that Bitfinex has "printed" large amounts of Tether (a so-called stable token which is supposed to be backed 1-1 to a supply of real USD) to buy up Bitcoin and artificially inflate the price.

I could see that getting rationalized as "creating tether for the contemporary USD equivalent of BTC, so it's still all as promised" (even though it is not), but that would really just be throwing tether under the bus to buy bitcoin some more time. And not terribly far from plain out minting unbacked tether.

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

#182

Post by sixQuarks »

jzymbaluk wrote: post #179
acct1771 wrote: post #164

Earlier quoted context omitted.

Worked great in 2008.

It actually did. The market was on it's way to crashing harder than the great depression, but it didn't, probably thanks in some part to government being able to intervene and control monetary policy

Have you ever heard of the phrase "kicking the can down the road"?

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

#183

Post by kernelPan1c »

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…

Regulation doesn't affect the ability of a currency to be influenced. It just puts that ability in the hands of a select few. The US govt prints money to pay off maturing debt. After some time, this scheme will come to a disastrous end. As long as there's trust in the central auth, both Tether and USD can survive.

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

#184

Post by lazerpants »

mattnewton wrote: post #33
1123581321 wrote: post #6

What’s the difference between legitimate technical trading and propping up a market? Is it just volume?

Imagine you and I have a collection of paintings by an artist. We want to sell them for more than the last painting by that artist went for- but the market price is pegged around that price. We agree to buy each other’s paintings at a much larger price- which is fine for us, because we are paying roughly the same as we are getting and we will still have a painting. But now it appears to third parties that the paintin…

Interestingly, this is sort of the case for housing as well, and one explanation for why it goes through boom and bust cycles.

Edit: just the first paragraph, about moving assets at ever increasing nominal values

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

#185

Post by marcandre »

bhouston wrote: post #171
marcandre wrote: post #165

I'm wondering how many people are shorting USDT on Kraken? The potential downside is having to pay interest. The upside is 100% win. With enough short position, Tether will run out of funds and the price will have to crash. Disclosure: I'm short USDT.

I have a theory that some of the market crash in December was because of selling Bitcoin (originally gotten from USDT) for USD in order to fill their reserves of backing USD. I think that USDT could be moderately sophisticated in that they could have fulfilled their coffers via market manipulation. If they were smart and brazen, I think they could have possibly pulled it off. One would have to study the market inflow…

Interesting theory. If they indeed hold the USD, they could still run away with it. The 2.3B$ worth of Tether represents more than 75 years worth of gross profit of Bitfinex (see https://www.reddit.com/r/BitcoinMarkets/comments/68wlre/some... ).

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

#186

Post by nickbauman »

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…

The problems we're seeing with cryptocurrencies are utterly unsurprising if you know what money really is and how it actually works.

I think people who are excited about cryptocurrencies assume that money is merely a tool to facilitate transactions between parties of people. The fundamental model of this is two people bartering goods, lol, in some sort of imagined "forest primeval" before money was invented. That money is just a substitute for that behavior. It's hopelessly naive.

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

#187

Post by [deleted] »

sixQuarks wrote: post #182
jzymbaluk wrote: post #179

Earlier quoted context omitted.

It actually did. The market was on it's way to crashing harder than the great depression, but it didn't, probably thanks in some part to government being able to intervene and control monetary policy

Have you ever heard of the phrase "kicking the can down the road"?

[deleted]

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

#188

Post by saosebastiao »

stinkytaco wrote: post #153
kadenshep wrote: post #140

Earlier quoted context omitted.

>and then find organic solutions. I don't understand this perspective. You have a proven, verifiable, simple solution right in front of you. Then you ignore it with some skimpy platitude to dive right into economic mythology. Regulation is the correct solution.

> Regulation is the correct solution. I once read (here, perhaps) that Bitcoin is a long demonstration in how regulation comes to exist. I think many in the Bitcoin community conflate "regulation" with "monetary policy". They assume if bitcoin is treated like money, with laws that protect people from fraud, that must somehow lead to restrictive monetary policy, which the community tends to abhor.

Exactly. It boggles my mind that people can't grasp the difference between the two. I hate the fed and the department of the treasury, and think QE is a horrible policy just like our permanent deficit. But I happily welcome the SEC and FINRA getting involved in cryptocurrency.

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

#189

Post by Spooky23 »

conanbatt wrote: post #131
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…

The most interesting thought to me right now is how the situation will develop if or bitfinex/tether crashes the market hard. I am not a fan of the SEC getting involved. Taking crypto as an experiment, I think it is better for the market to take a hit and then find organic solutions. If the SEC gets involved and busts bitfinex/tether, the community loses the opportunity to become 'unbailable'. Yes , people will lose…

It’s an experiment that is repeated time and time again, and people refuse to learn.

Without the disincentive of prison and financial ruin, people will always find ways to use leverage and information asymmetry to defraud the public. Always.

HN is often very innocent and naive about people and their motivations. Unfortunately, there are assholes in this world, and the law is what protects us from them.

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

#190

Post by ceejayoz »

lawlessone wrote: post #53
JohnJamesRambo wrote: post #5

If you haven't already, I recommend getting out of Bitcoin and into Ethereum immediately. There is a transfer of dominance rapidly happening. Market Cap Bitcoin $158,149,902,894 Ethereum $106,632,442,880

Market cap is a terrible measure. If i make a my on crypto coin mine 100 of them and convince one person to buy one for 1000 euro, my coins market cap is suddenly 100,000 euros.

For example: https://signalvnoise.com/posts/1941-press-release-37signals-...
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