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$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

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Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#331

Post by arcticbull »

mcguire wrote: post #323
arcticbull wrote: post #267

Earlier quoted context omitted.

> Inflation is high and will remain high for at least a year (maybe longer). Is it? Month over month inflation numbers are only slightly elevated, in the annualized 3% range. This isn't particularly high - the high inflation already happened, it's over. CPI and PPI numbers both came in good. PPI of particular note, services were up 0% month over month, and commodities 1.3% for a blended 0.56% (in line with expectatio…

" If the hikes play out, we'll land around what, 2-3% for the fed funds rate? That's low, historically. " But it's not the 0.1% that drove money out of other asset classes (i.e. bonds) because they couldn't generate any returns.

Do you really see folks broadly moving from risk assets to a 2-3% interest savings account in a 3.x% inflationary environment?

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#332

Post by stingraycharles »

vmception wrote: post #298
low_tech_love wrote: post #257

“Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini” Oh yeah sure they saw their coin going to s*%t and thought “yeah let’s just throw away a couple billion dollars just so people won’t think we are scammers”. Sure. The Vatican has started a process to canonize these saints.

uh yes exactly? thats the only reason they bought the bitcoin in the first place Terra Luna was already stupid enough, its stupid to make this part controversial because that was the purpose of this collateral, just as its stupid to not believe the bitcoin was sold after transfer to the exchanges (many people believe that its still owned, or was given to some whales to bail just them out, or the founder keeps it for…

I know that it’s the plan, do they have any evidence (like transaction ids) that it actually happened?

I haven’t followed this a lot but from what I gathered there’s not a lot of transparency around this. If so, why not?

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#333

Post by gardenhedge »

TomSwirly wrote: post #175
eric_cc wrote: post #124

Earlier quoted context omitted.

No. There is still 1 BTC in this scenerio. When you choose to deposit your 1 BTC you've lost custody of it and somebody else has gained possession of it. All you have is a promise that you'll get it back - which is not === BTC.

> There is still 1 BTC in this scenerio. You simply do not understand finance. Consider Eurodollars as another example: https://www.investopedia.com/terms/e/eurodollar.asp

> You deposit 1 BTC, they loan it out to someone else. Boom, 2 BTC.

Do you mean "they" purchase a second bitcoin with the second person's loan money? if not, where does the second bitcoin come from? (Hint: think about the blockchain)

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#334

Post by peyton »

snovv_crash wrote: post #201
eric_cc wrote: post #90

Earlier quoted context omitted.

LUNA minted trillions of brand new tokens within the span of a day or so rendering the token worthless. This is due to the way LUNA was tied to the algorithmic stablecoin UST. It was a true ponzi. BTC's max supply is capped and the release schedule of new coins is fixed and predictable. There is no possible way that trillions of new bitcoins could suddenly be created.

Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing li…

I don’t understand your argument. What happens during hyperinflationary periods or other currency collapses? The government stops demanding payments?

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#335

Post by Strom »

snovv_crash wrote: post #201
eric_cc wrote: post #90

Earlier quoted context omitted.

LUNA minted trillions of brand new tokens within the span of a day or so rendering the token worthless. This is due to the way LUNA was tied to the algorithmic stablecoin UST. It was a true ponzi. BTC's max supply is capped and the release schedule of new coins is fixed and predictable. There is no possible way that trillions of new bitcoins could suddenly be created.

Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing li…

Bitcoin also has the backing of a government - El Salvador.

I would rather argue though that even government backed currencies are fully dependant on trust, not government usage of it. Just check out any government currency hyperinflation event.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#336

Post by sangnoir »

hypertele-Xii wrote: post #322
j245 wrote: post #278

Earlier quoted context omitted.

And the distance between love and glove is only 1.. who cares ?

This is actually a decent joke, buried under a dismissal.

A dark joke, with perhaps a hint of OJ Simpson, but a solid nerd joke nonetheless.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#337

Post by [deleted] »

mcguire wrote: post #315
izzydata wrote: post #210

Earlier quoted context omitted.

Stock prices are back around where they were before the pandemic. It may have already been overvalued at that time, but perhaps it is a level of overvalue that people are comfortable with as we were already there before the system got flooded with money.

Wilshire 5000 / US GDP: https://fred.stlouisfed.org/graph/?g=qLC That is normalized to 1 in late 2007. At the end of 2021, it was 2.53; at the end of the first quarter of this year it's at 2.37. In 1Q 2020, it was 1.80. Stock prices have been increasingly disconnected from the economy 2014-2015.

[deleted]

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#339

Post by stjohnswarts »

celestialcheese wrote: post #143
onlyrealcuzzo wrote: post #40

Earlier quoted context omitted.

Only 3.87% of Tether was backed by dollars: https://siliconangle.com/2021/05/13/tether-releases-reserve-... So it could drop pretty far.

That's a bit old - https://tether.to/en/transparency/#reports Closer to 50% tbills and cash. All caveated with if you trust MHA Cayman auditors. The other 50% could be anything, and likely sketchy as they are chasing yield and extremely cagey about revealing anything about their holdings.

Nothing invokes trust like the combination of the words cayman and auditors.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#340

Post by Barrin92 »

nickff wrote: post #232
jliptzin wrote: post #186

Earlier quoted context omitted.

I never understood the argument why crypto was a good store of value. Sure, it’s an ingenious new transactional system, making global payments mostly frictionless, etc, but that’s true whether the value of 1 Bitcoin is $1 or $50,000. If everyone’s just converting back to fiat anyway, only keeping enough BTC transiently to settle transactions, why hold it long term?

If the transient use of a cryptocurrency is increasing, the demand for it will be, and the price will follow. If the price is increasing fast enough, it could be worth holding. The same is true of any money or asset used for payments/settling debts (like gold or silver).

this doesn't work super well because if a currency appreciates in value due to usage and you start to hold it, that means there's less of an incentive to spend it in the first place. That's one of the reasons why we're not trading in gold coins any more, it's almost exclusively turned into an appreciating store of value.

Deflationary currency is undesirable as a means of exchange because you don't want to use it, and that is also one of the reasons why central banks target low inflation rates.

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