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Worries Grow That the Price of Bitcoin Is Being Propped Up

nytimes.com

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Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#41

Post by mtgx »

jandrese wrote: post #7

“It’s a signal to the market of what those who have scrutinized the situation already believe: There is a problem here,” said Jill Carlson, a former trader at Goldman Sachs who now consults with a variety of virtual currency companies. “The dissolution of a relationship between an auditor and a company is very rarely a good sign that the company is behaving in accordance with market best practices.” When you're getti…

And yet they were able to print like 800 million USDT a month after being subpoenaed by the US government.

Strange, no?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#43

Post by misja111 »

"Hundreds of millions of dollars worth of new Tether were created; almost always when the prices of other virtual currencies were heading down."

Doesn't this simply mean that when people were selling their virtual currencies, they chose to stall their money in Tether?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#45

Post by notahacker »

paulgb wrote: post #34

I find it weird that people assume this is intentional market manipulation. If they are in fact fraudulent (I think they are), being able to print money is a business model in itself; you don't need to intentionally manipulate the market (but could end up doing so accidentally)

Easier to pump existing BTC holdings with $2bn of imaginary-dollar backed tokens than exchange $2bn in imaginary-dollar backed tokens directly for dollars and find a bank that'll let you cash them out...

And if your plan is to ultimately do the latter, you're going to have to cash out slowly and indirectly anyway, in which case why not pump the price of other assets you stand to benefit from in the mean time.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#46

Post by FiveSquared »

jandrese wrote: post #7

“It’s a signal to the market of what those who have scrutinized the situation already believe: There is a problem here,” said Jill Carlson, a former trader at Goldman Sachs who now consults with a variety of virtual currency companies. “The dissolution of a relationship between an auditor and a company is very rarely a good sign that the company is behaving in accordance with market best practices.” When you're getti…

https://youtu.be/571BuZeeQjE

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#47

Post by cm2187 »

misja111 wrote: post #43

"Hundreds of millions of dollars worth of new Tether were created; almost always when the prices of other virtual currencies were heading down." Doesn't this simply mean that when people were selling their virtual currencies, they chose to stall their money in Tether?

Perhaps I don't understand it correctly but I assumed that wouldn't result in Tether being created. A holder of Tether would exchange his Tether for BTC. Only a transaction of Tether for cash would result in Tether being created.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#48

Post by rebuilder »

amluto wrote: post #29
rebuilder wrote: post #23

Watch for a premium on the BTCUSD rate on Bitfinex. That'll be the market believing there's a significant risk of insolvency. I'm surprised there's no premium yet.

If Bitfinex or its sister company is engaging in outright fraud, I see no reason to believe its market data.

How would they fake the price while allowing trades and BTC withdrawals?

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#49

Post by api »

scardine wrote: post #19
JohnJamesRambo wrote: post #5

If you haven't already, I recommend getting out of Bitcoin and into Ethereum immediately. There is a transfer of dominance rapidly happening. Market Cap Bitcoin $158,149,902,894 Ethereum $106,632,442,880

Does Ethereum has any immunity from pump-and-dump and other market manipulation schemes compared to Bitcoin or your comment has nothing to do with the subject?

Of course not.

One takeaway I have from both the 2008 crash and the cryptocurrency mania is that it's actually very hard to create a financial system that is not mostly fraud and gambling.

There's a couple reasons for this. One is that people are greedy and I've even seen really honest people get weird around money. The second is that humans are extremely prone to falling for the alluring cognitive biases and fallacies behind gambling. A corollary of the second is that gambling doesn't always look like gambling and can emerge spontaneously in markets, but when it does it still runs on the same emotional and cognitive biases that make people go to casinos.

The line between fraud and gambling can get blurry too. Can you get away with it? Hmm... wanna bet? Every act of fraud is kind of a dice roll. Get away with some fraud once and the gamblers' fallacies start taking hold.

It's really really hard to organize a large scale civilization or financial system so that most activity is honest and/or productive. It's a constant Red Queen's Race against both intentional fraud and systemic failures.

Re: Worries Grow That the Price of Bitcoin Is Being Propped Up

#50

Post by paganel »

> In recent months, however, many investors have been raising alarm bells about Tether. Hundreds of millions of dollars worth of new Tether were created; almost always when the prices of other virtual currencies were heading down. The Tether were used on the Bitfinex exchange to make big purchases of Bitcoin and other tokens, helping push their prices back up, according to multiple analyses of data from Bitfinex.

Surely this is illegal? (if confirmed true, of course)

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