Earlier quoted context omitted.
If anyone is looking for books to read during holiday down time, they could do worse than 'Liar's Poker' [0], followed by 'When Genius Failed' [1], following the career of John Meriwether and the rise and fall of LTCM. [0] 'Liar's Poker', Michael Lewis [1] 'When Genius Failed', Roger Lowenstein For a 'light reading intro to finance' trilogy, add 'A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Fina…
JWMP is the successor to LTCM, built using the same models with less leverage. They also blew up in 2007-2009. It's cool, I just submitted a paper on LTCM yesterday. AMA?
An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
211–220 of 359 posts
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#212Earlier quoted context omitted.
that's not how markets work. bitcoin has no intrinsic value, just a exchange rate with other things
that is exactly how markets work. > bitcoin has no intrinsic value, just a exchange rate with other things 1. It has proof-of-work, which gives it value 2. Supply of the coin and demand for the coins determine the price. The only thing that can vary widely is the demand, the supply cannot be fucked with (unlike fiat currency). It is impossible for whole bunch of new coins to suddenly appear out of thin air. There is…
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#213Tether shows the problem with non-shortable securities. If even 1% of traders believe it's valuable and 99% don't, the 1% can happily trade amongst themselves at full value. If there were a short market, the majority non-believers would drive the price down. I think you could find 1% of cryptocurrency traders that believe any theory you care to name.
You can short Tether on Kraken.
Can somebody explain how that effect would get priced into the market? I can't think of another commodity like that.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#214Earlier quoted context omitted.
All bitfinex has to do is prove they have the money. but they can't do that.
They have publicly refuted the claims, but people are still running around with pitchforks.
They absolutely have not refuted them. In fact their continued refusal or inability to do so is (weak) evidence in support of the claims.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#215Earlier quoted context omitted.
Bear in mind that this is bitcoin. People continued pumping money into mtgox for _months_ after it was clear to anyone who’d been paying attention that it was dead. And currently bitcoin’s in an unusually large bubble, so there are lots of people buying into it who’ve never previously had experience of it. I see ads for, basically, “get rich quick with bitcoin” every day now. The people clicking those are not the wor…
> Bear in mind that this is bitcoin It's still a market, so market logic should apply. > get rich quick with bitcoin I see the same shit with real estate. > sufficient people buying tethers at face value It's a market. Smart money can sell tethers. When there's information that all market participants know, the market price should reflect that information.
And that, famously, _never_ crashed.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#216USD 814M accumulated over a year, legit vs not legit?
You don’t really need to think hard, who is these 30 mil, 30 mil deposit? If you divide by a year, they need to have an average 2.2 millions of deposit a day. That’s just to Tether. That’s a lot. Just moving these amount of money in any country will put your account in question.
Will you do it if their T&C doesn’t guarantee withdrawal? A bank actually need a govt to issue deposit insurance for it to work? People are depositing 2.2 millions without any deposit insurance, with shady T&C?
I mean you can believe in it, but I’m definitely skeptical.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#217Earlier quoted context omitted.
I can't wrap my head around this. Who is silly enough to sell bitcoins for 'worthless' Tether?
People who want a liquid USD tethered asset on many exchanges and aren't needlessly paranoid over absurd conspiracy theories that have yet to present a single ounce of real evidence.
Likelihood of a problem x the cost of the problem happening = how much you should worry/care/act
When someone asks 'how sure you are' about something and you say 'really sure', unless you pull out a slide deck with numbers and graphs, that's an emotional estimate, and has no bearing on the precautionary principle. We naked apes get tripped up by this because we are used to dealing in social interactions, where your intuition works pretty well. Statistics, not so much.
You loan your friend your car when you're pretty sure that they won't wreck it, scratch it, make it smell like pork rinds. A business is not your friend. There's no social capital at play. Without that social capital you would never lend your car to a business. You don't owe them the benefit of the doubt nor do you reap a non-monetary benefit from doing so. Only when there is such a benefit (community building, networking, etc) would you even consider doing so.
I have certainly defended companies in forums because I felt they represented some part of a world I wanted to live in. That's my social capital in that case. The best way to predict the future is to create it, and I had a small part in that. I participated.
But in this case if you're wrong, instead of losing out on a toy, or a pillow that is always the exact right temperature, or a fridge that always has chocolate milk in it, you're going to lose money, face, and probably that world you hoped for. There's been enough shenanegans that the confirmation bias that kicks in if Tether is allowed to continue to grow and turns out to be a pyramid scheme has a real potential to have deleterious effects on the whole concept.
How willing are you to back Tether if it means there will never be a similar company that is actually legitimate? What are the objective odds of that outcome at this point? If you really want this world, you should be demanding transparency from everyone you support in this space at this point.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#218I found this comment, by Richard Berger on SeekingAlpha, compelling: > STOP! and think about what this author has revealed. Even IF Tether is NOT running a fraud, the arbitrage positions that automatically exist between Bitcoin and any tether are real and do create incentive to create an arbitraged feedback loop whereby a pegged tether between Bitcoin - any_generic_tether - USD does exist and self feeds, driving up B…
Am I reading that right?
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#219Earlier quoted context omitted.
One of the other parallels that interests me is that there's very little incentive to be publicly skeptical of the nonsense. People were immensely critical of Warren Buffett during the dot-com bubble. He was frank that their valuations didn't make sense to him, and he took a pasting for it. He turned out to be right, but only after taking a lot of heat: http://news.bbc.co.uk/2/hi/business/1217716.stm There's little g…
Calling bitcoin a bubble seems like the wrong word. There are basically two possible outcomes: total market cap zero, or in the trillions. How much you think bitcoin is worth depends on your guess (and it really is just a guess, nobody has any idea what is going to happen) about the relative likelihood of each.
The end game for any currency is a market cap of zero, with a long enough t -> infinity.
> or in the trillions.
Nonsense. That's like saying that the total market cap for vkou's collectible post-it-notes may be in the trillions.
Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange
#220I found this comment, by Richard Berger on SeekingAlpha, compelling: > STOP! and think about what this author has revealed. Even IF Tether is NOT running a fraud, the arbitrage positions that automatically exist between Bitcoin and any tether are real and do create incentive to create an arbitraged feedback loop whereby a pegged tether between Bitcoin - any_generic_tether - USD does exist and self feeds, driving up B…