Monitoring the Crypto Bubble

Discussion in 'Digital Currencies' started by Bullion Baron, Dec 12, 2017.

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Where do you think we are in the crypto bubble?

  1. Very early (years left to run)

    23.1%
  2. Around the middle (could still run for months or a year)

    37.7%
  3. Very late (could end within days/weeks)

    23.8%
  4. It's not a bubble

    15.4%
  1. hardyakkagold

    hardyakkagold Well-Known Member Silver Stacker

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    Coinbase Global Inc. was sued over its role in the promotion and trading of a stablecoin that allegedly was “anything but.”

    The digital asset trading platform and the issuer of the GYEN token were accused of misleading investors about its stability, leading to millions of dollars in losses, according to a proposed class-action complaint filed Thursday in federal court in northern California.

    “Investors placed orders believing the coin’s value was, as advertised, equal to the yen, but the tokens they were purchasing were worth up to seven times more than the yen,” according to the complaint. “Just as suddenly, the GYEN’s value plunged back to the peg -- falling 80 percent in one day.”

    Coinbase then froze trading of the coin, which “compounded the harm by restricting many customers’ ability to sell the asset,” the investors alleged. As a result, purchasers of GYEN “collectively lost untold millions in a matter of hours,” they claimed.

    Edit: Stay away from stablecoins unless you are a horse.

    To say that these cryptos are backed by hard assets such as fiat currencies is a joke in itself.

    Nearly all fiat currencies have lost at least 97% of their original purchasing power, and they could lose the other 3%
    very quickly in a WTSHTF scenario.

    Stable coins will be stable at 0 as will the fiat currencies that underpin them.
     
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  2. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Tether:

    Today Market Cap $76,562,555,312
    Yesterday Market Cap $81,532,647,425
    Wednesday Market Cap $83,039,717,298

    What would that imply for a stablecoin?

    --

    Emotions heating up.

    George Noble Questions Tether's CTO Paolo Ardoino On Why They Won't Complete an Audit

     
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  3. Gazza79

    Gazza79 Well-Known Member Silver Stacker

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    I had 9k in ETH, BTC, SOL and XRP and others and was with Coinbase but I transferred them to CoinSpot a while back and sold up last week odd to avoid to much loss, still lost a little but I’m happy I pulled out when I did.

    I had a bad felling about Coinbase months ago.
     
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  4. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    @hardyakkagold are you going to answer any of the questions directed at you? Probably not.

    Why is that a joke?

    Fiat currencies are backed by the reputation of the State and the financial institutions that issue them. Some nations have very little by way of reputation, other nations have highly regarded economic policy settings. Despite what you like to believe, which is usually fantasy, the strength of fiat currencies such as the USD, AUD, JPYetc is built upon the reputation and legal framework of those wealthy nations. There is absolutely no need for any of those fiat currencies to be commodity based nor would it be a sound idea from an economic point of view to have them backed by physical assets.

    Another stupid comment indicating a lack of research.
     
    Last edited: May 14, 2022
  5. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    It would mean that funds have shifted from USDT into other assets or into fiat currencies. Probably because market players have been spooked by UST's de-pegging. The same process has been happening with FRAX and is likely happening with other stablecoins.
     
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  6. Golden ChipMunk

    Golden ChipMunk Well-Known Member

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    these are centralise wallet, may locked at any time to suit themselves.

    Everything was dropped accordingly at the time.

    Unless , you cash out.

    Quantity remain same just the dollars value dropped. I don't look too much at dollars values.
     
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  7. Gazza79

    Gazza79 Well-Known Member Silver Stacker

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    Yes that is what I was afraid off and I cashed out of CoinSpot and was very surprised that they deposited the cash into my bank account within 1 hr.
     
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  8. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Ardoino has stated that users have been redeeming USDT for USD. During a redemption, for every 1 USDT that a user trades USD1 is sent to the user. The USDT redeemed are then removed from the supply available. There was also an arbitrage opportunity going on for a while where users were buying USDT on one exchange below USD1 and selling it on other exchanges for USD1 or more.
     
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  9. 66rounds

    66rounds Well-Known Member Silver Stacker

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    Modern day usury lol
     
  10. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    I have been reading this interview transcript between Levine and Sam Bankman-Fried, and all I can gather is DeFi sure does make TradFi and value investing look ancient and boring. o_O:p

    https://www.bloomberg.com/news/arti...ed-yield-farming-and-left-matt-levine-stunned

    SBF: (24:10)
    Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we're in, if you do this, everyone's gonna be like, ‘Ooh, box token. Maybe it's cool. If you buy in box token,’ you know, that's gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven't been $20 million dollars that have flowed into it yet. Maybe that's sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it's not totally clear that this thing should have market cap, but empirically I claim it would have market cap.

    Matt: (24:57)
    I agree.

    Joe: (24:59)
    It shouldn't have any market cap in theory, but it practice, they always do. Okay.

    SBF: (25:03)
    That's right. So, and obviously already we're sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we're gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

    And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

    SBF: (26:43)
    And they’re like ‘10X’ that's insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it's $130 million market cap token because of, you know, the bullishness of people's usage of the box. And now all of a sudden of course, the smart money's like, oh, wow, this thing's now yielding like 60% a year in X tokens. Of course I'll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.
     
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  11. serial

    serial Well-Known Member Silver Stacker

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    Move away from the insult and look at what he is saying. The issue here is that you are arguing your position using different matrix of value to me. You are arguing that because I don't fully understand the minute workings of cryptos that I can't form a correct opinion on its value. Statements like ""erroneous knowledge base. " indicate to me and others that you can never accept others are correct because they don't understand it like you do. It's like me saying I have a sea shell worth millions and others are wrong if they disagree with me because they don't understand how to read the swirls on the shell and if they did they would know how great an investment is. I may be able to convince someone to buy it but that doesn't change its actually value in the eyes of the majority. It's sale is literally predicated on me convincing someone to have the confidence to commit to a wealth transfer to obtain it. If that confidence is lost the its value is entirely based on utility. At best a light paperweight which means it's value competes with other paperweights of a similar size. A piece of gold is the same except it is used in multiple other items like electronics, medical equipment etc.so if the investment confidence is lost its utility value competes with similar metals for purpose eg copper. However no other metal has the same properties so yeah.
    So if/when confidence is lost in cryptos . What can you do with it?
    But again you make arguments that are highly technical and based on complex interactions with computer systems that will, like all technology, become redundant in a matter of time.
     
  12. serial

    serial Well-Known Member Silver Stacker

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    See this is wrong, reputation is trusting the issuer. But backing up with hard assets, how about all the oil,gas and minerals of the country for a start. The government owns them and they are about as hard an asset as you can get
     
  13. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    This is true - in addition the US Dollar is backed up by their eleven carrier strike groups (but let's not go there - depressing enough as it is).
     
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  14. serial

    serial Well-Known Member Silver Stacker

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    Lol yes, 100% right
     
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  15. 66rounds

    66rounds Well-Known Member Silver Stacker

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    why didnt i study coding and cryptography at uni lmao. study medicine and become a doctor they said :rolleyes:
    by usury i was referring to the arbitrage they found between BUSD and USDT, buying 1 dollar for less than $1 and then selling it for $1 and making more dollars lol
     
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  16. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Beyond the insult is his insistence that only physical assets can have value. I've shown that to be a fallacy.

    I don't know what your "matrix" of value is. I work along the neo-classical view of value that the Georgists, Austrians and others teach.

    https://wiki.mises.org/wiki/Value

    Yep I can't disagree with that, but I'm also saying that your view on how humans assign value to objects is faulty.

    To you, cryptos in part derive their value as a vehicle of trade. This indicates that you do not understand the many uses beyond just trading that cryptocurrencies offer. Secondly, you maintain that cryptos also derive their value in part from the technology we employ to use them. Value resides in humans and is not intrinsic to objects. Cryptocurrencies have value not because of the technology we employ to use them but because we assign value to them.

    Confidence? I'm not sure that's applicable at all. Maybe utility is more accurate. When cryptos lose their utility what can you do with them? Nothing. Just just like everything else that we have no use for anymore. That however is not a scenario that I can see unfolding in the near or medium future. Cryptos have a multitude of uses beyond simply trading or investment. Individual projects will come and go, but the ecosystem is with us to stay.

    Naaah.

    Reputation is trusting the issuer but it has little to do with commodities. There are 3 accepted safe-haven currencies (with the Euro beginning to rise as a fourth). Of the 3 nations whose currencies are viewed as safe havens only one of them has an abundance of mineral reserves, the USA and in the USA landholders hold the rights to mineral reserves, not the State. The Swiss Franc is a safe-haven because of the strength of its banking system and its stability. It doesn't have huge mineral reserves. The USD is a safe-haven also because of its stable government, its legal system and financial sector, but also because even when the world goes to shit, the US seems to do better than most others. Finally the Yen is a safe-haven again because of its political and financial stability, but also because it is a creditor nation. Not because of any minerals it may have.

    Australia has a wealth of mineral resources but that doesn't make it a safe-haven, we're a "risk-on" currency because our economy relies heavily on the resource sector. The strength of a nation's currency has little to do with mineral wealth or guns, look at Venezuela and everything to do with political stability and how sound that nation's banking system is, because after all it's the banks and government that issue the fiat.
     
    Last edited: May 17, 2022
  17. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Screen Shot 2022-05-18 at 8.47.36 am.png

    Fantasy: USDT issuance is used to manipulate the price of BTC up or down. Make up a graph, any graph will do.

    Reality: USDT issuance has been steadily climbing - see graph below. Unfortunately Glassnode doesn't have the amount of USDT issued prior to 2018, apparently the run up in the price of BTC at the end of 2013 is supposed to be statistically significant. As we can see, in the bear market of 2018, as the price of BTC fell USDT issuance remained stable. Then we've got another bull and bear market in 2019 where again the USDT issuance remained fairly stable. During the massive run up in price of 2021, USDT issuance mirrored the price of BTC until the crash, when the price of BTC fell, yet the amount of USDT issued kept rising - presumably as people cashed out of BTC into USDT. Then we've got another bull market where the amount of USDT issued mirrored the rise in the price of BTC, indicating demand for USDT as people scrambled to buy BTC. Then of course we've got the bear market we're currently in where USDT issuance continued to rise despite a falling price in BTC. For anyone after a real lesson in economics as to why that happened go back through this thread or send me a PM. Finally, the amount of USDT issued falls abruptly in the face of the UST drama as the price of BTC continues to drop and people get out of stablecoins and crypto in general into fiat.

    Screen Shot 2022-05-18 at 9.06.19 am.png
     
    Last edited: May 18, 2022 at 12:15 AM
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  18. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Apparently the Tether market cap dropped again.

    Screen Shot 2022-05-18 at 10.33.57 am.png Screen Shot 2022-05-18 at 10.34.17 am.png
     
  19. 66rounds

    66rounds Well-Known Member Silver Stacker

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  20. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    ^ redeeming USDT for other assets, probably fiat. Once redeemed USDT is taken out of circulation.
     

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