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Former US SEC attorney: 'Get out of crypto platforms now'

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Re: Former US SEC attorney: 'Get out of crypto platforms now'

#201

Post by paxys »

charlieyu1 wrote: post #169
roarcher wrote: post #18

Earlier quoted context omitted.

An exchange is basically a bank without the regulations and consumer protections of real banks. It also defeats the purpose of crypto. It's the worst of both worlds.

Still, exchanges exist because there is a large demand of customers converting between fiat and crypto, also probably reduce transcation fee and time to be low enough to allow trading derivative products. Not perfect but probably a necessary evil.

The demand for simply converting from fiat to crypto to hold or spend it does exist, but is probably negligible compared to wanting to do the equivalent of investing or day trading.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#202

Post by fwungy »

rossdavidh wrote: post #184
fwungy wrote: post #167

There are $5T of foreign exchange transactions per day. Btc is already getting traction in the developing world as a reliable currency and that is likely to grow under de-dollarization. The entire crypto market is about $1T right now of which btc is about half. There is so much space for Btc to grow as an option for international settlement, it's already working and trusted as much or more than many sovereign currenc…

"The entire crypto market is about $1T right now of which btc is about half." How much of that do you think is Tether-related? If Tether were to, say, turn out to mostly own Chinese real estate bonds that are worthless (no idea if this is true, it's just one suggestion we've heard), and that portion of BTC volume which is related to Tether purchases goes away, how much impact do you think that would have on the price…

Tether is a problem. It's one of the reasons I would not go all-in on btc, but it's not insurmountable. There are plenty of use cases that do not involve USDT.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#203

Post by mensetmanusman »

winstonprivacy wrote: post #174
username332211 wrote: post #144

Earlier quoted context omitted.

It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit. It's called the efficient market hypothesis. If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then…

Markets are not efficient much of the time. And Bitcoin even less so. Source; I make a living exploiting market inefficiencies.

You are what makes the market slightly more efficient.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#204

Post by fwungy »

LexiMax wrote: post #185
fwungy wrote: post #167

There are $5T of foreign exchange transactions per day. Btc is already getting traction in the developing world as a reliable currency and that is likely to grow under de-dollarization. The entire crypto market is about $1T right now of which btc is about half. There is so much space for Btc to grow as an option for international settlement, it's already working and trusted as much or more than many sovereign currenc…

> The Feds and the bankers hate it because it's a direct threat to their business model. There's no room for a middle man to fugazi in btc. Crypto has spawned their own classes of middle-men. At best, you have a changing of the guard - new boss, same as the old boss. At worst, you have traditional finance buying a stake in crypto and ending up in the exact dominant same spot they were before. And of course, all of th…

Yes, but the blockchain can be publically audited, unlike the current regime.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#205

Post by mrguyorama »

username332211 wrote: post #144
otoburb wrote: post #97

Earlier quoted context omitted.

>> If this sounds far-fetched, consider that many smart and smart-sounding people have predicted Bitcoin's demise, and so far all have been utterly wrong Bernie Madoff pulled off one of the largest (literal Ponzi) scams and evidently stated that he started in the 1990s for a run of just over 15 years until being arrested in 2008, although some investigators thought that his fraudulent activities started as far back a…

It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit. It's called the efficient market hypothesis. If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then…

The efficient market "Hypothesis" (is it even testable?) presupposes a rational market, doesn't it? Real life markets are not rational, by definition. Humans are not rational actors.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#206

Post by Animats »

burnished wrote: post #75

Woof, lots of emotional and nigh incoherent responses to a pretty thoughtful little statement. Doesn't inspire confidence when the average response seems to boil down to a form of religious fervor. Which is too bad, seems like it would have been the perfect place for a thorough rebuttal.

The Twitter replies are worse.

The original poster makes the key point - the institutions running crypto are unregulated and are doing unverifiable things with customer assets and trades. That rarely ends well. Most of the scams are classic ones. Most of them are in this book from 1841.[1] They've been done before, for other kinds of investments. If you know about John Law's bank, and the Mississippi Bubble, and the South Seas bubble, and tulipomania, and the original Charles Ponzi, you'll recognize all those scams in the crypto industry.

They come back whenever regulation is weak.

- FTX was a bucket shop - a broker not really doing trades, just stealing the customer money.

- NFTs were tulipomania - hype and enthusiasm with no value behind the asset.

- Axie Infinity was a Ponzi scheme - early adopters paid off with deposits of later adopters, until the supply of suckers ran out.

If you know the list of standard financial scams, you can easily slot most crypto schemes into a standard category.

[1] https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion...

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#207

Post by Retric »

fwungy wrote: post #179
HDThoreaun wrote: post #96

Earlier quoted context omitted.

Bitcoin is a horrible store of value. It's incredibly volatile.

In many places Btc is one of the safest ways to store value. The scenarios it could collapse under are dark. It's biggest enemy is soveriegn currency issuers and banks. They would need to attack it such that holders lose faith in it en masse and collapse it. The successful attack they need to make is dystopian in nature. It would require a global digital identity that was attached to all internet access and an altern…

Nowhere is BTC the safest way to store value, it’s got far to many risks in normal use to be particularly safe.

A double speed attack doesn’t need anything particularly dystopian to happen. It doesn’t even need to result in a large transaction just someone deciding to short BTC and briefly having the computing power to destroy it. Even just a creditable attempt that fails could completely undermine it.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#208

Post by mrguyorama »

solveit wrote: post #190
winstonprivacy wrote: post #174

Earlier quoted context omitted.

Markets are not efficient much of the time. And Bitcoin even less so. Source; I make a living exploiting market inefficiencies.

His point stands though. The general public can't know exactly when Bitcoin will collapse, because if they could, it already would have collapsed.

His point is built on a theory with as much scientific rigor as Freud's penis envy work.

If economics was a functioning field of scientific study, The list of top 100 richest people would all be economists withholding scientific findings for their own gain, not a bunch of rich kids swinging their money dicks around.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#209

Post by 0x457 »

alephnerd wrote: post #20
zhvihti wrote: post #14

It's strange to me how people keep comparing cryptocurrencies to equity, but don't compare them to their closest counterpart - fiat currencies. Are fiat currencies treated like securities? No. Are there "best execution requirements" when I exchange my USD for EUR. No. Did somebody have to register the Brazilian Real with the SEC for it to be exchangeable in the US? No.

Fiat currencies are backed by the issuing government, who in turn follows globally agreed upon regulations. This is why a cryptoCURRENCY is treated as a security.

That's not exactly true, though. Only coins that are backed by something are treated as securities: ICOs, stablecoins and similar. ETH for example is not a security by any definition used in the US. This is why bitcoin specifically not included in those lawsuits.

Re: Former US SEC attorney: 'Get out of crypto platforms now'

#210

Post by mrguyorama »

mminer237 wrote: post #113
cs702 wrote: post #99

Earlier quoted context omitted.

Gold is pretty volatile too. Its price has gone up and down between 5x and 10x a few times in just the past century: https://www.macrotrends.net/1333/historical-gold-prices-100-... -- no one sane would call it stable. And yet, despite its volatility, gold has been used as a store of value for millennia .

In the last 5 fives, gold's highest price was 60% higher than its lowest point. That is indeed pretty volatile. Let's see if Bitcoin is comparably volatile… Oh, it's highest point was only 1920% higher than its lowest point. That's definitely the exact same as gold. /s Also, that ignores that gold has been a store of value for millennia. It's almost synonymous with wealth. In a total financial collapse, if all modern…

Even if people WANTED bitcoin in a total financial collapse, what scenario collapses all normal fiat currencies and doesn't touch a system that requires cheap power and niche hardware and internet connections?
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