341–350 of 359 posts
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> Smart money can sell tethers I don’t think that many people are really holding onto tethers all that much; who has tethers to sell? Bitfinex itself?
Current issuance of tethers is ~$850m, according to the story told by Tether/Bitfinex, these should be held mostly by users. There’s no reason for exchanges to hold (unless they were buying for their own account).
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Actually, housing crashed when lots of people who had bought housing on credit turned out to be unable to service the debt. I don't think there's a similar scenario with bitcoin. On the other hand, a large secular demand will always exist for housing. The same is not true for bitcoin.
I think there is always a demand to instantly transmit value across any distance or borders, which cryptocurrencies do very well as long as they have any value at all.
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Fraction reserve lending doesn't mean "for every 1 dollar deposited inside, bank can give away 5 dollars worth of credits to other people" - it means that if people deposit 5 dollars, you can give away 4 dollars of them as loans and only keep 1 dollar in reserves (as opposed to keeping all 5). It still has to have more assets than liabilities, except that some of those assets can be not available on demand, but loans…
The banking system can expand an initial deposit of $100 into a maximum of $1,000 at a 10% reserve ratio when subsequent loans are re-deposited. ($100+$90+81+$72.90+...=$1,000). This all gets counted as M1 money.
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Fraction reserve lending doesn't mean "for every 1 dollar deposited inside, bank can give away 5 dollars worth of credits to other people" - it means that if people deposit 5 dollars, you can give away 4 dollars of them as loans and only keep 1 dollar in reserves (as opposed to keeping all 5). It still has to have more assets than liabilities, except that some of those assets can be not available on demand, but loans…
The banking system can expand an initial deposit of $100 into a maximum of $1,000 at a 10% reserve ratio when subsequent loans are re-deposited. ($100+$90+81+$72.90+...=$1,000). This all gets counted as M1 money.
The claims others have on you must be balanced by claims you have on others, otherwise you're defrauding your depositors; and if you want to accept money from the public, your words can't be taken at face value but need to be verified (and publicly supported) by trusted, independent external auditors.
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> 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 Bitcoin exactly as the author contends may be happening with the current Tether. This purported mechanism needs a more thor…
Tether price is 80cents. Person trades bitcoin for tether. Person redeems tether for $1, profiting 20cents. Tether issues more (fraudulent, not backed) currency. Repeat.
I see how this would affect the price of bitcoins in tethers, but not how it would affect the price of bitcoins in USD (unless the market, as a whole, conflates the two).
Also, where do these alleged arbitrageurs redeem their tethers? As I understand it, the corporation that issues tethers was cut off from doing international wire transfers, thus rendering tethers irredeemable.
If your anxious about things going to crash because of tethers the best way you can hedge against the volatility is watch the markets like a hawk lol. Can be very profitable too with all the volatility Checkout the live charts and forecasts at https://bitbank.nz
You can sell to USD but can't withdraw overnight and deposit in the morning so you're exposed to counterparty risk which in the crypto sphere is enormous.
Only safe position is to be out of this market currently.
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I like how they say "may add"... haha, they always add it! I assume they're talking about the GDAX order book but if you watch the live coinbase price data on tradingview.com and try to buy bitcoin on casebase at the exact same time, it's always a little higher on coinbase.com (about 0.5% higher from my experience). I wouldn't mind if they weren't also charging an additional ~4% fee on top of that.
So that's more fee than the worst wire transfer or credit card currency exchange?
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Futures coming soon. Look what happened to subprime when it became possible to go short.
it wasn't possible to short subprime in the past?
I 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…
That author is plain wrong and shows deep ignorance about bitcoin and the crypto-market. An unsustainable price of bitcoin will lead to the collapse of other exchanges since people cashing out on these exchanges requires enormous amount of real money. This will create a situation where the price of bitcoin in Bitfinex is higher than other exchanges by a big gap. This is not the case, actually the opposite is true: Bi…