Author Topic: Bitcoin currency (merged topics)  (Read 225486 times)

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #690 on: March 28, 2019, 12:15:39 PM »
Cointelegraph, 3/19/19: New Report Warns 87 Percent of Cryptocurrency Exchange Volume Is Potentially Suspicious

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...Reporting on figures gathered from 97 exchanges, researchers found that the vast majority of the volume claimed to come from users may not in fact exist. ...

“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie wrote in social media comments on the findings. ...


Cointelegraph, 3/22/19: Bitwise Tells US SEC That 95% of Volume on Unregulated Crypto Exchanges Is Suspect

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95 percent of volume on unregulated exchanges appears to be fake or non-economic in nature, an analysis from cryptocurrency index fund provider Bitwise Asset Management has argued in a report dated March 20. ...

“Under the hood the exchanges that report the highest volumes are unrecognizable. The vast majority of this reported volume is fake and/or non-economic wash trading.” ...

Bitwise claims that roughly 95 percent of reported volume is fake and that the real market for BTC is thus “significantly smaller, more orderly, and more regulated than commonly understood” — amounting in reality to $273 million. ...

Suspect signs include an implausibly perfect alternating pattern of green and red [buy and sell] trades, and a lack of round number or small value trades. On Coinbene, buy and sell orders also appear in timestamped pairs, with one offsetting the other. Moreover, the spread on Coinbene at the time of Bitwise’s analysis was $34.74: “that compares to $0.01 on Coinbase Pro. It is surprising that an exchange claiming 18x more volume than Coinbase Pro would have a spread that is 3400x larger.”

Suspect exchanges also reportedly demonstrate consistent volume 24-hours a day, as opposed to regulated exchanges, where volume corresponds to waking and sleeping hours. ...

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #691 on: March 29, 2019, 02:16:33 PM »
Just work through the history here. Bitcoin went from a currency to a wealth storage device that was little more than a speculative bubble and then got its futures listed on Wall Street but us commoners could only buy calls so the banks held all the puts and miraculously the price tumbled. Now we find all the trading is rank bullshit so it's not hard to imagine the banks did a naked short and the development team (who belong in prison) probably played into their hands by restructuring Bitcoin to a non-usable currency that was little more than a speculation.

I believe we have witnessed a financial crime. How else could the banks only sell calls on a product that desperately needed puts? I would have bought puts had it been legal. I'm being told that when the price shattered only the banks made money and the bulk of trading was questionable? SEC? They found the only way to short Bitcoin just before it tanked and only they got the short?

Just put this in perspective... I can short or put FOOD. Wheat, corn, rice, oranges, etc. can all be bet against. But letting me bet against Bitcoin? Well, that could have been dangerous. Only the banks can bet against Bitcoin and its fictional trading.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #692 on: April 25, 2019, 04:21:55 PM »
WSJ:  Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Finds

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State Attorney General Letitia James said Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cover up the missing funds, which occurred in mid-2018 and hadn’t been disclosed publicly.

The attorney general’s office said it has obtained a court order directing iFinex to stop moving money from Tether’s reserves to Bitfinex’s bank accounts, halt any dividends or other distributions to executives and turn over documents and information. The coverup drained at least $700 million from Tether’s reserves, according to the attorney general’s office.


There's been speculation that Bitfinex and Tether are rotten to the core for over a year.  Sounds like there may actually be something to it. 

Don't trust any exchange, or any crypto tied to the dollar, ever!  Centralization is not your friend in this space.

Prices are falling off a cliff across the board, but BTC is hanging on to it's >50% dominance.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #693 on: May 09, 2019, 10:00:24 PM »
Interesting article that Jimmy Song recommended this week (which is weird because Jimmy doesn't ever analyze price): https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25


This author attempts to correlate bitcoin's scarcity to price and compares that with gold and silver.  Scarcity is defined as the Stock to Flow ratio. 



Bitcoin's SF is currently 25, but jumps to 50 in 2020.  Compare that with silver's 22 and gold's 62. 





He claims the data shows a power law relationship between bitcoin's supply and price.  Where each halving of supply, which doubles the SF, results in a 10 fold increase in market value.


According to his model, he predicts BTC market cap will climb to $1 trillion, with a price of $55,000, as a result of the next halving.

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The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.

People ask me where all the money needed for $1trn bitcoin market value would come from? My answer: silver, gold, countries with negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.


Who knows?  This guy could be more FOS than I am, so don't invest what you can't afford to lose forever.

Offline David in MN

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Re: Bitcoin currency (merged topics)
« Reply #694 on: May 10, 2019, 07:23:15 AM »
I will never understand the story arc of Bitcoin no matter how many times I have this conversation. In 2011 we thought Bitcoin was going to save the world when everyone used it and it saved us from transaction fees from Western Union and crippled central banking. A central bank can't compete with a capped currency and as all good libertarians know central banking = war. As in they invented central banking a couple years before WWI.

So the dream waas to have a global currency that transferred instantly at low cost, ended war, and forced the governments of the world out of inflationary fiat and into deflationary Bitcoin where people actually got wealthier by saving rather than lose every year in worthless bank accounts.

Those are some pretty lofty goals. But if achieved they provided massive value to the user who uses a deflationary currency with a healthy return of savings and low transaction fees and as a byproduct ends war. That's what we were talking about.

Fast forward to 2019. It's value is scarcity and few will use it. The thrill is gone. And when I read the few still in it I understand that they have no idea if they are currency traders or commodity investors.

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #695 on: May 10, 2019, 12:10:59 PM »
This author attempts to correlate bitcoin's scarcity to price and compares that with gold and silver.  Scarcity is defined as the Stock to Flow ratio.

I'm dubious.  He's got a simple equation that includes no terms for human action.

I'd like to see similar curve-fitting for gold and silver over time, as the stock and annual production changed (and using a CPI-corrected dollar for comparison).  But I'd still be dubious, because the demand for Bitcoin has only existed for a decade -- only twice as long as the Beanie Babies investment fad lasted.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #696 on: May 10, 2019, 03:23:35 PM »
Dubious is the best mindset for evaluating cryptocurrency.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #697 on: May 10, 2019, 03:56:04 PM »
I'd like to see similar curve-fitting for gold and silver over time, as the stock and annual production changed (and using a CPI-corrected dollar for comparison). 

I just noticed that someone in the comments section of the article posted these results for gold since 1850:  https://medium.com/@mouk.rvm/hi-planb-eb8f1179eb58

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I calculated SF and Market value from 1850–2018 for Gold. The combined Bitcoin Gold data points are shown in the chart below.

As you can see it does not fit the model.

I recalculated (using official US inflation numbers) all historic market values (Bitcoin and Gold) to reflect its purchasing power, denominated in 2018 USD. For Bitcoin the impact is limited, given its short history. For Gold the impact is massive.

The result is shown in the next chart. The Gold dots are now concentrated around the trendline. R squared is 0,91.




But I'd still be dubious, because the demand for Bitcoin has only existed for a decade -- only twice as long as the Beanie Babies investment fad lasted.

Were Beanie Babies scarce?

Offline Mr. Bill

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Re: Bitcoin currency (merged topics)
« Reply #698 on: May 10, 2019, 07:12:19 PM »
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The combined Bitcoin Gold data points are shown in the chart below.

I don't understand what that means.  He's thrown Bitcoin and gold data points together in the same graph without distinguishing them?

Were Beanie Babies scarce?

There was artificial scarcity of particular models, and collector/"investor" mania took care of the rest.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #699 on: May 10, 2019, 07:33:17 PM »
The solid line is is 9 years of BTC data, the data points are gold over 150+ years. Obviously not comparable in terms of the length of historical data, but it’s interesting to see the similarity in purchasing power at comparable levels of scarcity.