What's Happening with Bitcoin Prices • Hacker News Board

Re: What's Happening with Bitcoin Prices

#51

Post by indubitable » Fri, Dec 08, 2017, 7:01 AM UTC

59nadir wrote: post #27

indubitable wrote: post #25

I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm…

Pretty much all of the money in Bitcoin was dumb from the get-go. These weren't economists figuring out that something was under-valued or the system could be gamed. It was people gambling back then and that's what's continuing to happen. Like you, I noticed an increasing amount of fairly oblivious people talking about Bitcoin a while ago in our office and that's the most certain marker of an impending crash, but in…

I think there's major inherent value in Bitcoin. Or at least was. I enjoy traveling and it's quite the pain with traditional banking. It ranges from the small things like facing account locks (even after informing the bank you'll be traveling) which take days to clear up, to getting absolutely gouged on access to your money. If you want quick access to your own money then you'll be facing artificially weakened exchange rates, fees on said exchange rate, and then fees on top of fees because fees. To get reasonable access you need to wire money which comes with annoying hassles, paperwork, delays, and then you better hope you're not trying to get access to your money during the weekend or a bank holiday.

And then the banks themselves also face countless rules and regulations which result in more hassles to consumers. Happen to keep depositing just below $x for whatever reason? Welcome to a suspicious activity report (for fear you may be trying to dodge financial accounting reporting regulations) and having all deposited funds confiscated until you spend tens of thousands of dollars proving yourself innocent, because in finance innocent until proven guilty apparently doesn't fly. And that's of course just one example among countless.

The current monetary system is pretty much awful. I thought (and think) Bitcoin is the start of a change to this. In other words that it has inherent value. The limits of that value are now being shown as transactional fees get crazy, but the point of this is that I don't view Bitcoin as an arbitrary commodity. It is a decentralized financial service.

Re: What's Happening with Bitcoin Prices

#52

Post by thisisit » Fri, Dec 08, 2017, 7:03 AM UTC

As much as I think there might be a crash, so many things are wrong here:

> They don’t do technical analysis or are savvy enough to place limit orders.

I agree on limit orders but what is the fascination with TA. Not a day goes about where someone in cryptocurrency uses some kind of chart mumbo jumbo to prove a point.

> Ever wonder why Coinbase takes about a week to “process” the sell?

Simple answer - Settlements. Banks are not very fast. If someone was to refund you now, you don't get the money in a day. They will always say, "money will be credited back to you in 2-4 days".

There are so many additional reasons for this:

1. Security. The amount of non-technical people going on the exchange is huge. So they don't know if the sell was the right one or not.

2. KYC - They need to ensure the buyers are following AML laws to ensure they don't get sued later for helping drug dealers.

3. Volume - The sheer volume of transactions which need to processed, specially with KYC confirmations.

4. Settlement - They can only pay someone if the buying party has sent the money to them.

5. Banks - Banks always know who is crediting the money. They might have put extra checks for money coming from Coinbase, not to slow Coinbase down but again to save their asses.

etc.

> Closing shop for a bit

The logic on this is so convoluted. If they keep the public price API is fast because it doesn't need to handle additional requests. It is a simple fetch.

Additionally, if they keep the price API open it is just providing ammunition to detractors.

Have you ever been in a stock market crash? Try that, your broker will freeze up and stop responding. You will have a public price API to know what just hit you.

Re: What's Happening with Bitcoin Prices

#53

Post by gt_ » Fri, Dec 08, 2017, 7:03 AM UTC

59nadir wrote: post #27

indubitable wrote: post #25

I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm…

Pretty much all of the money in Bitcoin was dumb from the get-go. These weren't economists figuring out that something was under-valued or the system could be gamed. It was people gambling back then and that's what's continuing to happen. Like you, I noticed an increasing amount of fairly oblivious people talking about Bitcoin a while ago in our office and that's the most certain marker of an impending crash, but in…

I don’t exactly disagree. But, until recently, the people I knew who were investing were techies with political bents. They appreciated the technology, wanted to support it, and invested small amounts that they could afford to lose. Would call this ‘dumb money?’

...this changed over the summer/fall, of course.

Re: What's Happening with Bitcoin Prices

#54

Post by spelunker » Fri, Dec 08, 2017, 7:06 AM UTC

victor106 wrote: post #44

“Ever wonder why Coinbase takes about a week to “process” the sell? Or why when you buy on other exchanges you’re debited instantly but when you sell it takes a few days to be credited?” “It’s mostly likely because these institutions don’t have the liquidity to actually pay you. The important thing to realize is the exchanges aren’t selling the Bitcoins on the open market nor are they transferring anything between wa…

I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't understand how these exchanges are functioning.

I have no idea why it takes a few days to process, however. I don't think the fact that it can take a little while to "process" sells is because it's a ponzi scheme though, that seems like a bit of a jump. I mean plain old ACH transfers take a few days, does that mean that ACH is a ponzi scheme?

Re: What's Happening with Bitcoin Prices

#55

Post by thisisit » Fri, Dec 08, 2017, 7:07 AM UTC

gt_ wrote: post #48

thisisit wrote: post #17

In case someone is wondering about Tether, there has not been new coins for about a week now: https://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC...

Interesting. What happens if, say, Bitfinex runs out?

Runs out of what? If you mean Tether. They can keep doing "grant token" as long as they want.

I will be publishing a blog on the market schemes of different token soon as there seem to be a lot of hype.

Re: What's Happening with Bitcoin Prices

#56

Post by samsonradu » Fri, Dec 08, 2017, 7:07 AM UTC

eximius wrote: post #6

robbyt wrote: post #3

Earlier quoted context omitted.

I'm out of the loop. What's the deal with tether?

Issue Tether (it is issued, not mined), trade Tether for Bitcoin, BTC price in Tethers increases, due to stated and believed peg of Tether to USD, BTC raises in USD price due to arbitrage executioners. More details: https://seekingalpha.com/article/4129543-bitcoin-one-way-go-...

Failing to understand how you could peg Tether to the USD and have people believe you. I was under the impression that pegging to a currency is something only a very big player, with close to unlimited resources can achieve, see People's Bank of China, Swiss Bank etc. Among others, you have to defend the currency against speculators and that requires a lot of capital.

Even the Bank of England failed to maintain the peg to the German Deutschmark some years ago. Can someone with more knowledge in the FX market area explain this better?

Re: What's Happening with Bitcoin Prices

#57

Post by captainmuon » Fri, Dec 08, 2017, 7:08 AM UTC

smaili wrote: post #14

> Ever wonder why Coinbase takes about a week to “process” the sell? I've actually always wondered this. What were to happen if the moment I click Sell , the price is $10K but when it's "processed", the price at that time is $1...would the USD I receive be based at time of click or time of processing?

There is not one single price, but many offers at different prices and volumes. The exchange doesn't sell or buy bitcoins, they just connect sellers and buyers (and handle the transactions). The price you see is the best current offer for the amount you are selling, I think. Usually, it changes a little, but yeah you are not guarenteed that price. If, at the time your order comes in, nobody wants to sell for $10K, but only $1, that is what you get.

This is why most (all?) exchanges have the option of buying/selling at market price ("best" price, I could imagine there is some protection included though so the order doesn't go through if there is more than X% price difference), or with a limit (where you say "sell X BTC, but I want at least $Y per BTC).

Re: What's Happening with Bitcoin Prices

#58

Post by geezerjay » Fri, Dec 08, 2017, 7:08 AM UTC

59nadir wrote: post #27

indubitable wrote: post #25

I think the explanation is really simple. A couple of months back numerous non-technical acquaintances began expressing interest in Bitcoin with a number of them going on to purchase it -- completely independent of one another. I doubt my anecdote is particularly unique. There seems to have been a huge influx of "dumb money" on the heels of an exponential increase in media coverage. There is the possibility that I'm…

Pretty much all of the money in Bitcoin was dumb from the get-go. These weren't economists figuring out that something was under-valued or the system could be gamed. It was people gambling back then and that's what's continuing to happen. Like you, I noticed an increasing amount of fairly oblivious people talking about Bitcoin a while ago in our office and that's the most certain marker of an impending crash, but in…

> It was people gambling back then and that's what's continuing to happen.

Not exactly true. Bitcoin was extensively used as a money laundering tool to facilitate illegal trade online. The money being used on those bkack-market deals dumped some liquidity into the mix and each money laundering transaction helped back bitcoins with real cash. As bitcoin's adoption as a key part of black market payment systems kept increasing, the increase in demand started driving the price.

The phenomenon was very similar to the one where drug pushers started using Tide detergent as currency, except Tide has real world value and there are no shills pumping its value saying it's the future.

Re: What's Happening with Bitcoin Prices

#59

Post by Kiro » Fri, Dec 08, 2017, 7:10 AM UTC

eximius wrote: post #6

robbyt wrote: post #3

Earlier quoted context omitted.

I'm out of the loop. What's the deal with tether?

Issue Tether (it is issued, not mined), trade Tether for Bitcoin, BTC price in Tethers increases, due to stated and believed peg of Tether to USD, BTC raises in USD price due to arbitrage executioners. More details: https://seekingalpha.com/article/4129543-bitcoin-one-way-go-...

How is it issued exactly? Practically and technically speaking. What is the process?

Re: What's Happening with Bitcoin Prices

#60

Post by kristopolous » Fri, Dec 08, 2017, 7:11 AM UTC

spelunker wrote: post #54

victor106 wrote: post #44

“Ever wonder why Coinbase takes about a week to “process” the sell? Or why when you buy on other exchanges you’re debited instantly but when you sell it takes a few days to be credited?” “It’s mostly likely because these institutions don’t have the liquidity to actually pay you. The important thing to realize is the exchanges aren’t selling the Bitcoins on the open market nor are they transferring anything between wa…

I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't understand how these exchanges are functioning. I have no idea why it takes a few days to process, however. I don't think the fact that it can take a little while to "process" sells is because it's a ponzi scheme though, that seems like a bit of a jump. I mean pla…

I'm not claiming any of them are. On the contrary, I'm saying there's a risk that some of them could be partially operating like this and if they were, you wouldn't be able to tell.

This is high risk. No kidding.