Well, Bitfinex has an OTC trading desk. It's possible the coins were routed to the OTC service. But I don't think Bittrex or Bitmex offer OTC services, which casts doubt on that idea.


The situation is a bit more opaque because all we can see is that BTC entered exchanges. On Bitfinex and Bittrex, those BTC could be used to buy altcoins. On Bitfinex, they could be used as leverage to buy BTC. On Bitmex, they could buy BTC or altcoin futures.

We assume the BTC were dumped on the fiat and Tether markets because price went down during the same overall time period. We don't actually know that. People used to look at bitcoin days destroyed and make doomsday predictions after big spikes -- they didn't always play out.

I definitely remain unconvinced about the idea that blockchains are going to "disrupt" most industries. Outside the context of securing money, resisting censorship (including cross-border and sanctioned transfers), and private transactions (e.g. Monero), I don't see viable use cases that justify the inefficiency of decentralization. That's not to say they won't emerge -- I just don't see anything compelling. Smart contracts are an interesting area for study, but I haven't seen anything useful. For now, it's just a horribly inefficient mess of "Hello, World" level crap.

But also, I do think Patrick Byrne was onto something with his vision of security tokenization. We might be annoyed by all the scams and vaporware emerging from the ICO scene, but tokenized securities built on decentralized blockchains do break down barriers for investment, fundraising and securities trading. With the drop in hype we've seen, there's naturally a lull in ICO activity, but I think there will be a lot of renewed interest in that space over time.

I think the stock and forex markets move so much differently from cryptocurrency because they have much more liquidity -- less volatility -- and because of the nature of fundamental analysis. The effect of BLS nonfarm payroll statistics on the forex markets, or earning reports on individual stock prices, can be profound though often times predictable. In the Bitcoin market, we constantly speculate about "whales" and regulator decisions and metrics of adoption that are really hard to quantify, and that's in the context of low market liquidity. The altcoin markets are even more intense; riches are often made and lost based on utter speculation around vaporware.

If I were to draw comparisons, I think the markets most comparable to cryptocurrency are decentralized assets with elastic supply and demand. Things like precious metals and crude oil. These are highly emotional and volatile markets.


I'm on the fence about this. I follow some consistently successful traders who live by TA. Fundamentals are really hard to quantify, though.

I evangelize Bitcoin technology here and there, and I've told most of my friends and family that I'm an investor and explained why. But I'm usually very careful not to advise anyone to buy it, and I emphasize the risk involved.

This isn't like blue chip investment. It's true that most people don't have the risk appetite this market requires, and aren't prepared for the volatility. I certainly don't want friends and family getting angry at me for their poor investment decisions (and their inability to HODL). I can't have that on my conscience.

Retail banks, investment banks and central banks will need to adapt. They need to follow the market. If retail banking customers want to use cryptocurrency, you can bet that Bank of America will accommodate them with a trusted wallet and transfer system, eventually. I imagine that's why they have something like fifty blockchain patents already.

Likewise, I think investment and central banks won't be able to ignore BTC forever. At some point, they may need BTC in their portfolios as a hedge against the devaluation of other assets, like currencies.

I see this article was published today, but isn't this the same "Silk Road/Gox whale" that everyone's been talking about for weeks? The coin movements go back weeks and the latest Reddit discussion was from 9 days ago. Is there anything new here?

If WizSec says it's a Gox whale, I tend to believe it, and the blockchain activity seems to support that. It looks like a small fraction of those coins were sent to exchanges in late August -- whether they were dumped on the open market, we'll never know. I don't particularly care. Over time, the early whales distribute coins to more and more hands. Like 1Referee said, this is a good thing for the market.

Identity theft -- your documents could be sold on the deep web. Criminals can buy them and use them to impersonate you. Most commonly, it's to steal money under your name: Opening new phone or utilities accounts, opening bank accounts and writing bad checks, opening new credit cards that will never be paid off, etc. When those accounts are defaulted on, they'll be tied to your name.

Worst case, your ID documents could be used to verify identity (for example, at a cryptocurrency exchange), and then the account gets tied to illegal activity like money laundering, theft or fraud. Many exchanges work with police in those cases.

I would avoid KYC wherever possible, and particularly with ICOs.

There are other decentralized assets, too. What about gold or oil? By many standards, they're volatile markets, but compared to cryptocurrency they're very tame.

I think it's largely a matter of market liquidity. At higher prices, no one can push the price up with just a couple million dollars. Hopefully that, combined with bigger bid liquidity due to rising demand will help stabilize things.

I agree though, that these markets will always be less stable than lots of assets -- blue chips, bonds, commodities with inelastic supply and demand, etc.

They're not useful for much besides mining. ASICs that are obsolete for mining Bitcoin could be used to mine SHA-256 altcoins. You could mine and hold speculatively, or just dump for BTC as rewards come in. You can find the most profitable coins here.

As someone mentioned, they give off a lot of heat. I know someone in a cold climate who lowers his heating costs with his miners. That helps to subsidize his mining electricity costs.

That was one of the turning points for me, when I realized the beauty of Bitcoin's "push" payment system vs. the "pull" systems of credit and debit cards. With cards, you authorize every merchant you deal with (and also the credit card sniffers in between) to withdraw from your account, and you have to trust them not to wrongfully charge you. With Bitcoin, that can never happen -- you sign and push transactions on your own terms. It's a beautiful thing.


I use credit cards. I've been a victim of credit card fraud, but there is always 0% liability for customers. The upside of using them is the cash back rewards. If you pay them off in full and reap the rewards, there is little downside.

I think it's a complex issue. To me, it boils down to ethical considerations, particularly around hard forks.

On one hand, you can take the position that no hard forks are legitimate. Since a hard fork removes rules and is therefore incompatible, consensus requires every node operator to agree to the changes -- they need to change software to affirmatively agree. That's completely impossible to accomplish prior to a fork, and harder yet everyday as Bitcoin's network grows. As a result, hard forks depend on the economic majority coercing the minority into accepting incompatible changes. If you take the position that hard forks are altcoins, then I think you can legitimately say that "BCH can't be called Bitcoin."

On the other hand, you can accept that hard forks are legitimate. That is, you believe the Bitcoin software can be hard forked and still be called "Bitcoin." If that's the case, things can get a lot more complicated. Can't you imagine a situation where two groups might disagree on a proposed consensus change? If incompatible changes are on the table, why should any one group have the authority to say, "only we, the chosen disciples, get to decide how to interpret the holy whitepaper?" What if the economic majority is on the side of the more radical change from the original protocol?

It's a lot easier when we can stick to questions of validity when deciding what Bitcoin is.

I think it's because of the low levels of available liquidity on exchanges, where price discovery occurs. At current prices -- and this is increasingly true at historic prices -- it doesn't take much capital to induce volatility. At this moment, it would only take ~ $1.2 million to push the price up $200 (or 3%) on Bitfinex.

I don't think we'll find stability for years. This is a brand new technology and asset class, so it's really speculative. At the same time, the available supply on exchanges is quite low. There's no escaping volatility there. When the market is much more mature and established, and at higher prices where more capital is required to push price, I think we'll find more stability.

Why wouldn't miners sell at a loss? Lots of investors sell at a loss, eventually, once the pain of being underwater gets bad enough. I remember reading about mining operations back in 2014 whose operational costs were heavily leveraged. They were forced to liquidate everything because of the bear market.

I've also heard of miners (and recently too) who had much lower costs than that.


The $5,800 bottom came only a couple months ago. Give it time.


Past performance doesn't guarantee future performance. If there has been sufficient demand to keep price above $5,800 it doesn't logically follow that there is no one willing to sell below $5,800. If the demand decreases, sellers could push price further down.

Anyway, I'll continue to hold my coins. I'm just playing devil's advocate and pointing out that this is all speculation.

It sounds highly unlikely, but I'm not an expert on all the laws governing broker-dealers and money transmitters. Brokers don't traditionally hold all assets they deal on hand -- that would be impossible. They route orders from investors to markets. I don't believe there is any law that specifically subjects cryptocurrency to different standards.

I'm not sure how it could constitute fraud if there is an understanding between buyer and broker that the BTC aren't already in custody, or how a tort could occur if there is no financial loss -- e.g. where broker takes an order he can't fill and refunds the buyer's cash.

I'm guessing the same. I came across a thread in Meta that seems to confirm:



Agreed. I think there's two things happening. Interest and hype across all cryptocurrency-related mediums has died down. And it's only natural that things like old school forums lose overall market share as more mainstream news and finance sites enter the game.

The first option seems totally unfeasible economically. Why would ETH miners want to receive less ETH fees as block rewards, to be replaced by random tokens they don't want? Fees exist to prevent tragedy of the commons -- to keep mainchain contracts from monopolizing precious block space without paying for it. Cryptocurrency miners are investing in what they mine. ETH miners are mining ETH because they want ETH. The whole incentive system break downs if you pay miners based on what users want rather than what miners want.

The second option seems utterly centralized. In theory, it could be done with contracts, but at best they would be dependent on third party APIs (to price and sell tokens) that could be exploited. It also seems problematic from a data propagation standpoint. Wouldn't this result in a huge and permanent influx of additional throughput on the network due to all these conversion transactions? That seems really inefficient.

It always seemed like a basic premise to me that to use a cryptocurrency network, you need to own some native tokens.

No wallet should link with a bank account. If you want to buy BTC with your bank account, you need to sign up with an exchange or find a seller on Localbitcoins / Paxful who accepts bank transfers.

Both Gemini and Coinbase offer free ACH transfers -- that should work for BOA.

This is my approach as well. I love spending BTC, and I do it all the time. If not everyday, then close to it. And I definitely agree with the OP -- I've said the same thing. Without transaction liquidity, the network is useless and can't have value. So, we can't all just be hoarders!

Having said that, I hoard most of my coins.

Sort of like, if you don't have BTC, you're excluded from Bitcoin network participation?

Interacting with contracts running on Ethereum requires mainchain transactions, with fees paid to ETH miners. Why would transaction fees be paid for by anything besides ETH? That was the whole design, and I think it's the only economically feasible solution if transactions are taking mainchain block space. If people want to pay fees in non-native tokens, they'll need sidechains.


Could you point out a few of those ways? Because I don't understand how this would work, economically.

I assume you meant so few own it.

Mass adoption can't happen overnight. We're talking about building a network from scratch. That 80% of Americans have heard of it is a totally new phenomenon. Would you expect all of them -- hundreds of millions of people -- to immediately go out and buy BTC (and then actually use it) just because they've heard of it? I certainly don't go out and buy something just because I'm aware of it.

Bitcoin has a steep learning curve. More than that, lots of people who've heard of it are skeptical due to its difficulty of use (for newbies) and years of bad press. Awareness is the first step. Adoption comes later.