Crypto crash deepens, stocks slip • Hacker News Board

Re: Crypto crash deepens, stocks slip

#381

Post by kingaillas » Wed, May 19, 2021, 4:19 PM UTC

pilingual wrote: post #233

jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

Thank you for the disinterested take! It's refreshing to see this as a top comment when so often I see "Crypto makes me sick" which offers zero information and doesn't belong on HN. A few points to the repetitive comments I keep seeing: 1. Bitcoin is not a Ponzi scheme. Various cryptocurrencies operate in such a manner, but Bitcoin and Ethereum have value propositions: settlement and programmable money respectively.…

>2. Bitcoin pricing is on a log scale.

Time to report bitcoin pricing with decibels?

I suppose another logarithmic scale would work here as well: Richter scale; scaled so these "corrections" are in the middle of the scale. Then we could about a "magnitude 5 on the bitcoin Richter scale" correction, etc.

Re: Crypto crash deepens, stocks slip

#382

Post by cableshaft » Wed, May 19, 2021, 4:19 PM UTC

paulpauper wrote: post #169

tadzik_ wrote: post #33

Earlier quoted context omitted.

> If $SPY dropped 40% we'd all call it a crash. This isn't that different If $SPY was 40% up since last month, would that be normal? ETH is still currently higher than its value from April 19th. Cryptocurrency market is extremely volatile. This isn't that far from normal.

In terms of risk-adjusted returns, Bitcoin worse than index funds. You can get smoother returns using 3x ETFs like TQQQ and TECL compared to bitcoin and about the same absolute returns. Nasdaq 100 has much better sharpe ratio compared to bitcoin. Same for FAAMG portfolio

If you're holding as long as most people do index funds (i.e. 5-10+ years), historically you would have been way better off putting that money into bitcoin. Even taking this crash into account, I'm way up on crypto compared to my 401k. Not going to stop putting money into my 401k though, for the sake of diversification.

Re: Crypto crash deepens, stocks slip

#383

Post by almost_usual » Wed, May 19, 2021, 4:19 PM UTC

matheusmoreira wrote: post #347

almost_usual wrote: post #110

Earlier quoted context omitted.

It’s not irrational it’s a step towards not wasting tremendous energy.

It's not even 1% of the world's energy consumption. If you want to stop wasting tremendous amounts of energy, all you have to do is stop trading with China.

All you have to do is end global trade and possibly spark WW3. Ok.

Re: Crypto crash deepens, stocks slip

#384

Post by zaptrem » Wed, May 19, 2021, 4:19 PM UTC

Avalaxy wrote: post #341

woeirua wrote: post #184

Everyone should take some time now to learn about Tether, the high likelihood that it is in fact a Ponzi scheme, and that it poses a big systemic risk to the crypto exchanges and therefore the markets themselves [1]. People have been sounding the alarm on Tether for a long time now, but we’re finally getting some hard evidence now to back the allegations [2]. Don’t say you weren’t warned. [1] https://mobile.twitter.c…

As a noob who owns some bitcoin and ethereum (both stored on an exchange), how does tether being a scam (which I do believe in) affect me? I don't hold any tether myself.

The theory is that the market cap of BTC/Eth/Shitcoins have been pumped by Tether buying power that isn’t actually backed by USD. People think Tether is printing fake money and buying crypto with it. If/when the world realizes this, the market cap of these different assets will return to their (possibly much lower) “real” values. This slide could cause another crash.

Re: Crypto crash deepens, stocks slip

#385

Post by ipv6ipv4 » Wed, May 19, 2021, 4:19 PM UTC

ourcat wrote: post #78

Surely this is also very much related to the recent announcement in China [1], banning financial institutions and payment companies from providing services related to cryptocurrencies? [1 : https://www.reuters.com/world/china/what-beijings-new-crackd... ]

This still seems to leave open the ability for Chinese nationals to covertly convert yuan to foreign currencies without limits - buying compute with yuan which converts to BTC which can then be converted into anything. I wonder what the BTC/USD break even point is for that to make financial sense.

Re: Crypto crash deepens, stocks slip

#386

Post by woeirua » Wed, May 19, 2021, 4:20 PM UTC

Avalaxy wrote: post #341

woeirua wrote: post #184

Everyone should take some time now to learn about Tether, the high likelihood that it is in fact a Ponzi scheme, and that it poses a big systemic risk to the crypto exchanges and therefore the markets themselves [1]. People have been sounding the alarm on Tether for a long time now, but we’re finally getting some hard evidence now to back the allegations [2]. Don’t say you weren’t warned. [1] https://mobile.twitter.c…

As a noob who owns some bitcoin and ethereum (both stored on an exchange), how does tether being a scam (which I do believe in) affect me? I don't hold any tether myself.

It affects you directly because: 1 - many exchanges hold Tether as a reserve and use it extensively for various transactions between the exchanges, which means that if Tether collapses they could have huge holes in their balance sheets. Some exchanges (Binance especially) could become insolvent overnight. No money in, no money out. Read up on Mt. Gox if you want to see what happened the last time an exchange went belly up.

2 - If you believe the worst allegations, then Tether is artificially propping up the value of Bitcoin. In the event of a run on Tether, Tether may be forced to sell thousands of Bitcoins abruptly onto the market to get cash.

3 - The fallout of a true worst case scenario for Tether could lead to crypto being reclassified in order to fall under all the relevant financial regulations that banks and the traditional finance sector are subject to.

Re: Crypto crash deepens, stocks slip

#387

Post by thecrash » Wed, May 19, 2021, 4:21 PM UTC

not_jd_salinger wrote: post #281

scsilver wrote: post #247

Earlier quoted context omitted.

Thats the thing, they arent currencies, they are assets that can act like currencies when convenient.

> hey arent currencies, they are assets The irony here of course is that the only way that Crypto currencies would meet any standard definition of an asset would be if they were functioning currencies. Going with Investopedia's straightforward definition "An asset is a resource with economic value", how is a non-currency crypto coin in any way a resource or possess economic value?

Presumably your complaint is that cryptocurrencies don't have "economic value", but what theory of value are you using to decide that?

Exchange theory of value says that a commodity has two values: a use value (what it can do for you outside of the market) and an exchange value (what others will give you for it in the market).

I think it'd be correct to say that cryptocurrency has no use value, but it obviously does have economic value. And it's far from the only asset with these characteristics.

Re: Crypto crash deepens, stocks slip

#388

Post by [deleted] » Wed, May 19, 2021, 4:21 PM UTC

Grim-444 wrote: post #357

jmacd wrote: post #11

As an outside observer, who has no crypto holdings at all, but is very deeply invested in the public stock market with a heavy weight on technology stocks... this doesn't look like a crash to me at all. It just looks like some steam being let off and old investors cash out and new investors get more comfortable with how much and where to invest. I consider crypto currency as it is to be an elaborate Ponzi scheme (per…

For context: - The stock market crash of 1929 was a ~25% crash - The dot com bubble crash was also roughly a ~25% drop - The 2008 market crash was a roughly 20-30% drop Various coins have now lost 10-30% of their value in the course of a couple of days. But it's just steam being let off? No big deal? Business as usual? If the same thing happened to the actual markets it would be another historic event.

[deleted]

Re: Crypto crash deepens, stocks slip

#389

Post by imtringued » Wed, May 19, 2021, 4:22 PM UTC

fny wrote: post #41

coldcode wrote: post #28

Earlier quoted context omitted.

But at least gold has some inherent value, crypto is just math that is worth whatever the buyers/sellers think it should be. Stock in a company that stays in business will never go to zero as the company always has some value due to having revenue, but crypto has no real world floor (though unlikely to actually get to zero since someone will always buy).

Gold does not have inherent value either. It's price is determined purely by a market and there are no other pricing mechanisms. You can't use discounted cash flow. You can't use comparables. You can use raw materials. It's a straight up rock that people price.

I can buy overly expensive shiny rings made out of gold. The utility is purely cosmetic but it exists.

The worst thing that could happen to your gold is that it gets turned into jewelry at a fraction of its original purchasing price.

Re: Crypto crash deepens, stocks slip

#390

Post by usrusr » Wed, May 19, 2021, 4:22 PM UTC

usrusr wrote: post #235

arcticbull wrote: post #174

Earlier quoted context omitted.

> That's because Bitcoin is very tightly held, and the amount of tradeable float is very very small compared to holdings. By the diamond-est of hands: those who lost their keys.

Which effectively make the total amount of live tokens (the rough equivalent of share count or money supply in stocks or currencies) more deflatory than useful for any application outside of pyramid games. All projections of market cap that include the dead tokens are even more worthless than other market cap projections. Problem is: there's no way to tell the dead from the merely sleeping. The bigger the share of da…

PS: makes me wonder if we might eventually see something like "tokens not transferred since ${some generous date horizon} will get blacklisted starting ${some era switch date reasonably far into the near future for living address to create a lifesign transcribe}" merged into mainline. Or even "get reissued to miners". If that ever happened it would be at a time when total supply uncertainty would already noticeably influence price (basically: if you use it as a value store you need to hedge against possible old god address revival), and most buying/selling during the runup would be bets about the amount of dark addresses lighting up in time.

PPS: obviously I have no idea about governance of the code, but I do acknowledge that very few changes have ever been accepted (as evidenced by the high number of long running forks). I wouldn't expect any of this to happen before the known alive amount of tokens has become a tiny fraction of the dark parts.