Crypto crash deepens, stocks slip • Hacker News Board

Re: Crypto crash deepens, stocks slip

#421

Post by diabeticApe » Wed, May 19, 2021, 4:40 PM UTC

jakeva wrote: post #408

intotheabyss wrote: post #376

Earlier quoted context omitted.

It means that ETH which is a decentralized cryptocurrency can be used as a collateral for an algorithmic stablecoin called RAI that adjusts its price based on the price of ETH from a Uniswap price feed and a PID controller and arbitrage. To mint RAI you need to deposit ETH. The goal of RAI is to create a stablecoin which dampens the price movements of ETH over long periods of time.

The fact the community felt the need to invent a "stablecoin" isn't terribly reassuring

Why not? Its a new asset, what is wrong with improvement? I mean using that logic does it also disturb you that somebody invented the seat belt? Would you prefer they didnt invent seat belts? Would that have been more reassuring of the relative safety of the vehicle if they never admitted that you could die in a car crash? The point of stable coins is really only apparent if you're trading crypto just like the importance of seat belts might make more sense to somebody that drives daily.

Re: Crypto crash deepens, stocks slip

#422

Post by rednerrus » Wed, May 19, 2021, 4:40 PM UTC

ProjectArcturis wrote: post #56

Bitcoin is the ultimate, purely financial object. It has no revenues or profits. The supply is fixed -- unlike, say, gold, where high prices mean people will eventually start digging mines, BTC supply is entirely price-inelastic. The only thing that determines BTC price is demand. And over the past 13 years, we've seen reflexivity at work: The price has gone up, so more people want it, so the price goes up further, a…

Tether is the only thing driving the price of BTC. When it came out that Tether is only 3% backed by actual USD, the prices dropped dramatically.

Re: Crypto crash deepens, stocks slip

#423

Post by onemoresoop » Wed, May 19, 2021, 4:40 PM UTC

thebean11 wrote: post #185

paulpauper wrote: post #152

Earlier quoted context omitted.

alt coins. BTC dominace used to be 90%+. now way lower . BTC holders get no royalties from blockchain being copied

how can you possibly make the claim that BTC was diluted vs the market cap of other coins being net new value?

> how can you possibly make the claim that BTC was diluted vs the market cap of other coins being net new value?

It makes some sense to me. When BTC was smaller in capitalization it was easier to double your money. Now smaller coins attract dollars that otherwise would have pumped up BTC so growth stagnates. BTC was considered the most stable of them all and I now find those claims somewhat dubious, they're all extremely volatile

Re: Crypto crash deepens, stocks slip

#424

Post by imtringued » Wed, May 19, 2021, 4:41 PM UTC

johnwheeler wrote: post #145

ProjectArcturis wrote: post #56

Bitcoin is the ultimate, purely financial object. It has no revenues or profits. The supply is fixed -- unlike, say, gold, where high prices mean people will eventually start digging mines, BTC supply is entirely price-inelastic. The only thing that determines BTC price is demand. And over the past 13 years, we've seen reflexivity at work: The price has gone up, so more people want it, so the price goes up further, a…

To me, the argument that fixed supply is a good thing has always been worrisome. People just parrot that viewpoint without asking whether some amount of Keynesian economics is useful, because you know, government is evil. It got us out of the Great Recession and it’s been 12 years. Maybe the consequences haven’t fully manifest, but another Great Depression would have been guaranteed hell.

Actually, the problem right now is the complete lack of Keynesian style fiscal stimulus. China and USA already did their part and they will do more.

I am mostly talking about Europe. The Eurozone basically makes fiscal stimulus impractical even though keeping it alive absolutely requires it.

Every time I hear people talk about Keynesian economics ruining everything I am thinking "no such thing happened". QE fills bank reserves, interest rates drop on their own, banks never lend out money, stock market goes up without any actual investment, there is unemployment caused by the macroeconomic structure of the economy, investors are flooding governments with their money by buying bonds, inflation remains stubbornly low, trump cuts corporate taxes.

The fact that things are reversing in the US is a good sign for the US economy as a whole. Biden is actually doing the fiscal stimulus that the economy was asking for decades. There may be a short term crash in the future but it's only going to get rid of the unproductive part of the economy to make everything ready for more long term growth.

Meanwhile Europe will be stuck forever if the Eurozone doesn't resolve its structural problems.

Re: Crypto crash deepens, stocks slip

#425

Post by matheusmoreira » Wed, May 19, 2021, 4:41 PM UTC

pradn wrote: post #292

kllrnohj wrote: post #26

Earlier quoted context omitted.

Bitcoin & Ether are both down -40% from a week to a month ago. Both of those are, in theory, large enough that investors "letting off some steam" shouldn't move them that much. If $SPY dropped 40% we'd all call it a crash. This isn't that different. Also unlike the stock market, crypto is under the delusion of being a viable currency. If USD or Euro dropped even 20% we'd start questioning if it's a recession, much le…

It doesn't seem like anyone believes cryptos are supposed to be currencies any more. All the talk around them is around them being a new, exciting, and potentially very lucrative investment class. If you go to Coinbase's front page, you see that you can buy and sell them, like you can with Robinhood. It's not trying to be a PayPal. The currency-ness does serve an important purpose. It helps bring in investment for th…

> It's not trying to be a PayPal.

Binance already has a credit card service that lets people use their cryptocurrency holdings to buy anything.

Re: Crypto crash deepens, stocks slip

#426

Post by devmunchies » Wed, May 19, 2021, 4:41 PM UTC

diabeticApe wrote: post #410

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…

While i agree that this is not really a crash as much as a long overdue correction, i have to respectfully disagree with your point about cryptos being little more than a ponzi scheme. Unfortunately the ones that have been getting most attention (Bitcoin, Doge, Ether) have been a poor representation of what the crypto space has been brewing thse past couple of years. I would highly recommend looking into DeFi project…

> whats possible with Smart contracts on Cardano

nothing? (yet)

Re: Crypto crash deepens, stocks slip

#427

Post by jakeva » Wed, May 19, 2021, 4:42 PM UTC

imtringued wrote: post #377

jasonlaramburu wrote: post #209

Earlier quoted context omitted.

When the price crashes money disappears.

>When the price crashes money disappears. Thought experiment. I buy 1 BTC and pay you $50k. The current market price is $35k. Where did the $15k go?

That depends, doesn't it? Where did I get that BTC? Did I mine it in 2010, or did I buy it last month for $64k?

Re: Crypto crash deepens, stocks slip

#428

Post by tubbyjr » Wed, May 19, 2021, 4:42 PM UTC

So much nocoiner butthurt in here lmao. Yes, it's down 50%, yet I'm still a multi-millionaire thanks to holding, from a small mining stint a couple years back, $0 invested directly aside from mining machines (GPUs I would have bought anyways for gaming).

With how it's progressed, I never have to sell. My employment income is zero, and I can't get any mortgages cuz of this... no problem, I can literally use crypto to sythnetically underwrite my own mortgages.

Re: Crypto crash deepens, stocks slip

#429

Post by trompetenaccoun » Wed, May 19, 2021, 4:42 PM UTC

imtringued wrote: post #356

ericwooley wrote: post #182

Earlier quoted context omitted.

Read up on what a ponzi scheme actually is. https://www.investopedia.com/terms/p/ponzischeme.asp#:~:text... . I'm so tired of people saying crypto is a ponzi scheme. Maybe you think it's nonsense, or a bad investment, but it is not a ponzi scheme. > A Ponzi scheme is an investment fraud in which clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all of their energy…

Well, it's not a ponzi scheme. It's a MLM/pyramid style scheme. The idea over the long term is that there are more future investors than past investors and therefore there will be more money in the future than in the past. However, returns only last until growth limits have been reached. The problem is that everyone who buys Bitcoin wants those gains but they are exclusionary/rivalrous by definition.

By that definition any stock that doesn't pay a dividend is a pyramid scheme. Of course, if you believe it has no value whatsoever, then anything can be seen as a pyramid scheme.

Re: Crypto crash deepens, stocks slip

#430

Post by imtringued » Wed, May 19, 2021, 4:42 PM UTC

icyfox wrote: post #249

johnwheeler wrote: post #145

Earlier quoted context omitted.

To me, the argument that fixed supply is a good thing has always been worrisome. People just parrot that viewpoint without asking whether some amount of Keynesian economics is useful, because you know, government is evil. It got us out of the Great Recession and it’s been 12 years. Maybe the consequences haven’t fully manifest, but another Great Depression would have been guaranteed hell.

Keynesian economics got us out of the actual Great Depression as well, if you consider FDR's decision to get off the gold standard and start trading dollars as a floating currency on the market. Fixed monetary supply might be one thing in theory, but fixed credit supply is the death knell to an economy. And the two are usually complimentary. Monetary supply can fill in the potholes of weakening credit supply when the…

>That said there is certainly something that's personally appealing about an asset that's guaranteed to maintain the supply side of the equilibrium.

It's appealing because it keeps politicians honest, but if you have honest politicians it is just a thought experiment.