A couple of interesting charts about Exchanges

[deisik]

Furthermore, the issued coin traded at just a fraction of its issuance value, which likely caused bitfinex the ability to buy back those issued coins for pennies on the dollar, and also, the increase in the BTC price and also other coins likely caused additional abilities of Bitfinex to recoup losses of those coins...

It was called the BFX token

I was not trading there at the time as I had moved my coins from the exchange in 2015 (long before the hack), but I'm more or less aware of the course of events. However, it doesn't tell us anything about what's going on now, i.e. why Bitfinex would be selling their coins (whatever their source might be) provided it is them selling. Of course, it can be anything but no one can stop us from speculating, right?

You seemed to have been speculating that bitfinex was ONLY recently recovering from their 2016 "hack,"

That's not the case

In fact, I'm now curious what in my post made you think so at all. They paid back even before April. As far as I remember, they redeemed the remaining tokens as early as February (if not January). Though I agree about the doom and gloom that had beset the whole crypto arena right after the hack. But it didn't last for long anyway as prices started to climb back in the fall of that year and by the end of 2016 already were over 1k, i.e. reached and then surpassed the 2013 highs

[JayJuanGee]

Furthermore, the issued coin traded at just a fraction of its issuance value, which likely caused bitfinex the ability to buy back those issued coins for pennies on the dollar, and also, the increase in the BTC price and also other coins likely caused additional abilities of Bitfinex to recoup losses of those coins...

It was called the BFX token

I was not trading there at the time as I had moved my coins from the exchange in 2015 (long before the hack), but I'm more or less aware of the course of events. However, it doesn't tell us anything about what's going on now, i.e. why Bitfinex would be selling their coins (whatever their source might be) provided it is them selling. Of course, it can be anything but no one can stop us from speculating, right?

You seemed to have been speculating that bitfinex was ONLY recently recovering from their 2016 "hack,"

That's not the case

In fact, I'm now curious what in my post made you think so at all.

It does not matter what I was thinking beyond what I have already explained (or attempted to explain).

I responded to your initial post, and I thought that my response was self-explanatory as a way to provide information or to supplement information that had already been provided by you and fillippone in earlier posts.

Thereafter, you questioned my response to your post, so again, I explained why I had responded.  

Seems pretty clear to me.. at least clear enough.

They paid back even before April.

Yes.  Bitfinex issued their BFX token that caused a 36% socialized loss (represented by the BFX token) several weeks after their early August "hackening", and after they issued the token then each month (at around the end of the month or beginning of the next month), they redeemed a certain portion of those tokens.. I don't recall when the first redemption was but let's just say they redeemed BFX tokens on October 1, November 1, December 1, January 1, February 1, March 1, and then the final redemption of BFX tokens was on April 1.

As far as I remember, they redeemed the remaining tokens as early as February (if not January).

Yes.  They did make redemptions earlier.. but I cannot remember all of the dates, exactly.. There were several redemption dates.  I was just saying in my earlier post(s), that they had redeemed all of the BFX tokens by early April 2017.  Here is a Bitfinex announcement of that April 2017 redemption.

Though I agree about the doom and gloom that had beset the whole crypto arena right after the hack. But it didn't last for long anyway as prices started to climb back in the fall of that year and by the end of 2016 already were over 1k, i.e. reached and then surpassed the 2013 highs

I recall that the doom and gloom lasted several months.  Initially there was doom and gloom assertions that bitfinex was never coming back, and then when they came back (contrary to the doom and gloom predictions) there was a decent amount of uncertainty about whether the come back was real and whether account holders would get their money back or if bitfinex's coming back would last beyond mere symbolism (exchange exiting shenanigans)... so yeah, overall the doom and gloom lasted several months, and probably even into the next year and there was even questions about the matter of how the social loss was borne and whether bitfinex had authority to treat the hackenings as a social loss but still surprise when they redeemed all of the BFX tokens so quickly (8 months or so).

We are not really saying anything different from one another, but I am saying that there had continued to be a lingering questioning of Bitfinex through out all of that period that even lasted beyond that period and its motives and Tether for a long time, and surely bitfinex has recovered a decent amount of its reputation through the years, and many folks even thought that bitfinex had been quite  innovative in the way that it had structured recovery (in a kind of unprecedented way) and recovered from a purported pretty large scale hack (including questions about whether bitfinex and other exchanges were even profitable beyond just stealing coins from others), yet I am not saying that everyone agrees about how to assess bitfinex matters, its reputation or scruples or that everything went back to hunky dory at some point, which seems to be the all over the place picture that you are ambiguously (at best) painting.

[sana54210]

I never believed that hack was anything important, sure bitfinex is a big one but there have been tons of hacks that didn't really destroyed crypto community which that won't didn't neither. I was here when mt.gox happened, it really hurt everyone because all the early birds lost their money, many people who consider today like "I wish I got in when it was 3 cents, I could have gotten out at 20k and be millionaire!!" are actually wrong because many friends I had lost all their money at mt.gox and price was around 100 bucks and more during that period when it was %100 certain that they are gone.

Or I remember cryptsy which was basically the biggest altcoin exchange, what binance is today, and it went away yet all the altcoins of that time are still in top 10.

[JayJuanGee]

I never believed that hack was anything important, sure bitfinex is a big one but there have been tons of hacks that didn't really destroyed crypto community which that won't didn't neither. I was here when mt.gox happened, it really hurt everyone because all the early birds lost their money, many people who consider today like "I wish I got in when it was 3 cents, I could have gotten out at 20k and be millionaire!!" are actually wrong because many friends I had lost all their money at mt.gox and price was around 100 bucks and more during that period when it was %100 certain that they are gone.

Or I remember cryptsy which was basically the biggest altcoin exchange, what binance is today, and it went away yet all the altcoins of that time are still in top 10.

Sure, the bitfinex situation was smaller than gox in terms of the number of coins...  And, of course, the Gox coins were coming off of the peak of the 2013 price rise, while the bitfinex hack came after a very long bear market that was only just beginning to get rolling and ramping up.

Seems that in 2016 Bitfinex was gaining a lot of prominence in the bitcoin space, and Chinese exchanges were largely losing credibility and getting shut down around that time, but bitfinex was retaining some credibility because it was targeting USD trades, so it's difficult to suggest that the 2016 bitfinex hack was not important at the time that it happened, even though afterwards there seems to have been a decent recovery from whatever had then happened and the way that bitfinex resolved the matter had been contrasted to the Gox drama that both removed a lot of coins from the market as you stated and not resolving, including having the Gox trustee engaging in questionable selling of coins.. a hack/scam that continues to give.

[fillippone]

The drainage of funds from the exchanges continue.
Particularly from coinbase.

(I like it, remember to make #deletecoinbase great again).



Users Punish Coinbase for Outage by Withdrawing Record Amount of BTC

Coinbase experienced its highest single-day net BTC withdrawal in the wake of the outage incident, with even the author of “Black Swan” quitting the exchange.

On June 7, Coinbase users withdrew 22,000 more Bitcoins than they deposited — worth $214 million. According to Glassnode data, only once in history did Coinbase see a greater net withdrawal — July 28 2017, when the outflow was 22,500 BTC. The price at the time, however, was $2,785. Thus, denominated in dollars, that was a much more modest event, with only $63 million worth of Bitcoin withdrawn from the exchange.

According to Glassnode BTC deposited in Exchanges are at one year low:

Chart with downwards trend #Bitcoin $BTC Balance on Exchanges just reached a 1-year low of 2,310,466.600 BTC

Previous 1-year low of 2,313,098.855 BTC was observed on 03 June 2020

Glassnode had already analysed this outflow coming to some interesting conclusions:

Bitcoin Investors' Exodus from Major Exchanges Continues

In their analysis, the outlfow of capital is given to a certain mix of the following reasons:

• Cold Storage for Hodling
• Lack of Trust
• Ongoing Trends

[JayJuanGee]

The drainage of funds from the exchanges continue.
Particularly from coinbase.

(I like it, remember to make #deletecoinbase great again).



Users Punish Coinbase for Outage by Withdrawing Record Amount of BTC

Coinbase experienced its highest single-day net BTC withdrawal in the wake of the outage incident, with even the author of “Black Swan” quitting the exchange.

On June 7, Coinbase users withdrew 22,000 more Bitcoins than they deposited — worth $214 million. According to Glassnode data, only once in history did Coinbase see a greater net withdrawal — July 28 2017, when the outflow was 22,500 BTC. The price at the time, however, was $2,785. Thus, denominated in dollars, that was a much more modest event, with only $63 million worth of Bitcoin withdrawn from the exchange.

According to Glassnode BTC deposited in Exchanges are at one year low:

Chart with downwards trend #Bitcoin $BTC Balance on Exchanges just reached a 1-year low of 2,310,466.600 BTC

Previous 1-year low of 2,313,098.855 BTC was observed on 03 June 2020

Glassnode had already analysed this outflow coming to some interesting conclusions:

Bitcoin Investors' Exodus from Major Exchanges Continues

In their analysis, the outlfow of capital is given to a certain mix of the following reasons:

• Cold Storage for Hodling
• Lack of Trust
• Ongoing Trends

Maybe there are more reasons besides the outages (that now are being accused as being purposeful)?

There are also accusations that Coinbase is helping out the feds with surveillance tools.  No?

Coindesk article from 5 days ago describing Coinbase as helping out the feds

[fillippone]

<...>
There are also accusations that Coinbase is helping out the feds with surveillance tools.  No?

Coindesk article from 5 days ago describing Coinbase as helping out the feds

I do hope so.
I hope users concerned about their privacy are willing to punish the bad actors against bitcoin, like Coinbase.
This is why I opened this thread to make #deletecoinbase great again.

[fillippone]

The quota of Bitcoin held at exchanges has been constantly following.
This means that “fast money”accounts have limited ammos.
This is something new in the Bitcoin ecosystem, as pointed out in this research.

Why Bitcoin is Surging and How This Rally Is Different from 2017 (Hint: It’s Who’s Buying)

Bitcoin’s price is rising because demand for Bitcoin is increasing at a time when there’s relatively few Bitcoin available to buy. While the total supply of Bitcoin grows every day as more is mined, the actual amount available to buy depends on whether holders want to sell or trade it. At Chainalysis, we quantify this by tracking the amount of Bitcoin held in wallets that send less than 25% of Bitcoin they’ve ever received, which we refer to as illiquid or investor-held Bitcoin, versus Bitcoin held in wallets that send more than that, which we refer to as liquid or trader-held Bitcoin. The chart below shows how the amount of Bitcoin in each category has changed since January 2017 alongside price, thereby capturing the market dynamics of both the current price surge and that of 2017.

So it’s not retail FOMO driving the market up as in 2017, but it’s institutional adoption eroding a limited offer as a proper “Phase5” Bitcoin Treasuritisation.

One other explication for this limited offer on exchanges, if I may add to something not explicitedly stated in the piece is the DeFi craze, that might have contributed to this drain from exchange balances into staking platforms.   

[deisik]

Bitcoin’s price is rising because demand for Bitcoin is increasing at a time when there’s relatively few Bitcoin available to buy

Isn't there a subtly disguised tautology here?

In a nutshell, price rising is the inevitable outcome of increasing demand and fewer bitcoins available to buy. Since otherwise the price simply wouldn't rise. In other words and in a more general sense, this is always the case with anything rising in price, i.e. demand exceeding supply

One other explication for this, if I may add to something not explicitedly stated in the piece is the DeFi craze, that might have contributed to this drain from exchanges into staking platforms

I think that can be explained by simple stashing rather than staking. What we see here can be adequately described by the deflation spiral dynamic and hoarding behavior of consumers (in this case, Bitcoin holders)

[alexforneus]

I hope that popularity of DEXes will be higher in the future. People should use non-custody wallets like wasabi or ownr and non-custody exchanges

[jademaxsuy]

I hope that popularity of DEXes will be higher in the future. People should use non-custody wallets like wasabi or ownr and non-custody exchanges

Yes, it could be good if we can have that way for we have the same thing that we like. But not all shoe fits to all size of foot so meaning bitcoiners should have the option base on what he like about exchanges and digital wallets. We should let everyone has their own ways and we should not force them to be in a place or scenario where they don't like. Actually I am not against centralized exchange and I am even using a non custodial wallet but I know the limit and should definitely not trust this kind of platform.

[fillippone]

Bitcoin’s price is rising because demand for Bitcoin is increasing at a time when there’s relatively few Bitcoin available to buy

Isn't there a subtly disguised tautology here?

In a nutshell, price rising is the inevitable outcome of increasing demand and fewer bitcoins available to buy. Since otherwise the price simply wouldn't rise. In other words and in a more general sense, this is always the case with anything rising in price, i.e. demand exceeding supply

You are correct, of course, and I am sorry if I couldn’t make my point more clear with my broken English.
Price going up because of an imbalance in the bid/offer is surely a tautology.
What I meant to signal is that this imbalance seems to be structural now, when compared to 2017.
Now the buying pressure is not coming from a psychological effect due to the FOMO of traders/punters/scalpers, that led to a spectacular, yet very temporary bubble in the price back in 2017.
This time the price is rising because institutional money is coming, with a different time horizon, not hours/days, but months/years. On the offer side supply has been limited not only by the halving, kicking in Stock to Flow dynamics, but from a lack of “weak hands” willing to offer their coins on exchanges.

Another way of looking at this is trough the HodlWaves graph:



Coins not moved since 24 months are definitely on the rise!

[deisik]

This time the price is rising because institutional money is coming, with a different time horizon, not hours/days, but months/years. On the offer side supply has been limited not only by the halving, kicking in Stock to Flow dynamics, but from a lack of “weak hands” willing to offer their coins on exchanges

And it doesn't bode well

Okay, there's no more weak hands left on the market, but what's the point? I mean hoarding Bitcoin for the sake of hoarding it is pretty meaningless. If we consider Bitcoin a store of value, it should, well, store value and that means liquidity, i.e. being able to liquidate your position without crashing the price. But as prices go up, they become more and more fragile, and it turns into a game of musical chairs, with chairs constantly being removed, until "institutional money" thinks enough is enough and dumps their coins on our heads (triggering an avalanche of liquidations)

[The Sceptical Chymist]

That Bitcoin (not speaking of other cryptocurrencies) is primarily used for speculation (with Dogecoin for gambling as an exception to the rule).

Speculation and as a store of value/investment kept in private wallets.  I agree, very little bitcoin is actually used to buy things.

What's up with that giant spike in what looks like Nov. 2019?  That looks as though a whale sold a whole bunch of bitcoin (or at least deposited it on an exchange).  It looks like it corresponds pretty well with a minor price drop, but for the life of me I can't remember any particular events happening around that time period with bitcoin.

I do hope so.
I hope users concerned about their privacy are willing to punish the bad actors against bitcoin, like Coinbase.
This is why I opened this thread to make #deletecoinbase great again.

Coinbase is a US company, so they probably have no choice but to cooperate with the feds.  Fuckin' land of the free, home of the brave my ass.  It's one giant surveillance state sandwiched by two great bodies of water and a superior country to the north.

[deisik]

That Bitcoin (not speaking of other cryptocurrencies) is primarily used for speculation (with Dogecoin for gambling as an exception to the rule).

Speculation and as a store of value/investment kept in private wallets.  I agree, very little bitcoin is actually used to buy things

I'm totally okay with speculation

In fact, I'm okay with active hoarding too. Active means you make a living out of it -- sell the bull, buy the bear, and live the spread, then rinse, repeat. If the price goes up without major pullbacks, as is the case now, all the better for your stash. But what's in it for the top dogs? I'm not sure if the narrative of "a new gold" explains it, and I don't buy it. Basically, it's free money for us, mostly holders and sometimes spenders, at their expense. So where's the catch? Why are they doing this to us? What are they really trying to achieve by buying Bitcoin?

[fillippone]

Update: balance on exchanges is drying at a record pace
This, coupled with the institutional buying frenzy is causing a bitcoin shortage.

A very nice find by @El duderino_:

This $BTC chart might be more important than the price chart: bitcoin supply is being withdrawn from exchanges at an all-time-high pace.

Historically, bull cycles have ended AFTER liquid supply change flips positive (Cerchio giallo)

That flip has not happened yet.

h/t glassnode

Ok, Grayscale is not buying thousands of BTC on a daily basis on exchanges (well, Microstrategy uses exchanges), but the message is pretty clear in my opinion. WHat happens when the books are empty?