The Big Short movie, BTC edition?

[bbc.reporter]

@exstasie. 2017 became the dominance of Binance, Bitfinex and some Chinese or Korean exchanges. I am
not certain, however, BTCe's millions in volume was very much lower than the top 3 exchanges' billions. BTCe on 2017 was not relevant anymore.

It also appeared to be the exchange that money launderers used to dump their coins to retrieve fiat.

In any case, yes we will see.

[exstasie]

@exstasie. 2017 became the dominance of Binance, Bitfinex and some Chinese or Korean exchanges. I am not certain, however, BTCe's millions in volume was very much lower than the top 3 exchanges' billions. BTCe on 2017 was not relevant anymore.

I really think this challenges that point of view:

This is an archive of CMC exchange rankings the day before BTC-e went down: https://web.archive.org/web/20170724163440/https://coinmarketcap.com/exchanges/volume/24-hour/

BTC-e and xBTCe (BTC-e's margin platform at the time, which used their liquidity on the back end) took the #7 and #15 spots by volume. Notably, several of the exchanges ahead of them are known for faking volume.

BTC-e was very important at the time.

The exchanges ahead of BTC-e included Yunbi, CHBTC, Coinone, Korbit, and other volume faking exchanges.......give me a break!

It also appeared to be the exchange that money launderers used to dump their coins to retrieve fiat.

Sure. Does that imply it wasn't an important exchange? The fact that the US government thought they were worth taking down (not to mention trying so hard to extradite the alleged owner, Vinnik) would suggest otherwise.

[bbc.reporter]

I would argue that if BTCe was really relevant in the cryptospace during that time, why was the bull market pump of 2017 not affected by BTCe's takedown?

[teosanru]

USDT was crticized in this forum because it does not have the 100% backing of real USD. According to Bitfinex, the tethers are backed 100% again. However, how are we certain?

Bitfinex also has pending inquiries on the New York State attorney general's office.



Whether or not USDT is fully-backed has long been a point of contention. The company has promised an audit of its stablecoin reserves (though it has not delivered one, and has since dissolved its relationship with its auditor), produced a third-party report saying it likely had more funds than outstanding tokens, and had a bank write a letter vouching for its holdings. (The latter two reports both acted as snapshots, only assuring the crypto community that on specific days, Tether’s obligations did not exceed its assets.)

Source https://www.coindesk.com/tether-says-its-stablecoin-is-fully-backed-again



Also, 70% of the total bitcoin trading in the cryptospace is made in USDT. This is an old source, however, I reckon the % might be close to similar at this moment.



In August, BTC trading into USDT represented 71.23% of total volume (traded into fiat or stablecoin).

Source https://www.cryptocompare.com/media/35651527/cryptocompare_exchange_review_2019_08.pdf



Are we sitting on a timebomb similar to the movie The Big Short?


Dr. Burry, The Big Short

I don't know why people are taking this lightly or acting as if they don't care about this. This post technically makes sense. If you say that you hate fiat but don't care what all scam is going on with USDT then you technically are giving you a false belief. But yes the amount of USDT that we have currently in market cap is pretty difficult to accomodate in reality. Moreover until now I am surprised that when we are talking about money supply of USD reaching heights why isn't the US government concerned about so much USD lying in with bitfinex? Isn't this strange?

[exstasie]

I would argue that if BTCe was really relevant in the cryptospace during that time, why was the bull market pump of 2017 not affected by BTCe's takedown?

That's exactly the point I was making: Bad news can't keep a lid on a bull market. Good news can't prop up bear markets either.

Did the rejection of the highly anticipated Winklevoss ETF stop the bull market in 2017? How about when China banned Bitcoin exchanges and ICOs? No, each time (like when BTC-e was taken down) we got a dip, and then the market went to new ATHs again.

This is why technical traders often say "news doesn't matter." The underlying trend is usually much more powerful.

[bbc.reporter]

However, a Tether takedown will not be some bad news that we can ignore carelessly. The whole cryptospace and most of its liquity depends on Tether. Bull markets cannot be created without it unless real dollars or another stablecoin also reaches a similar amount of liquidity.

Also, the essence of my argument is not fud. It is to warn us from making similar mistakes made by those overconfident people during the real big short.

[exstasie]

However, a Tether takedown will not be some bad news that we can ignore carelessly. The whole cryptospace and most of its liquity depends on Tether.

I've always contended that Tether represents a big chunk of Bitcoin market liquidity, but "most" is a big overstatement. I also think you underestimate how quickly Tether's competitors will swallow up its market share if things go that way.

Bull markets cannot be created without it unless real dollars or another stablecoin also reaches a similar amount of liquidity.

Real dollars, like the ones flowing into Coinbase, Bitstamp, Kraken, etc. during a bull market? We need dollar inflows, not necessarily stablecoins.

Also, the essence of my argument is not fud. It is to warn us from making similar mistakes made by those overconfident people during the real big short.

I'm not the type to accuse anyone of FUD anyway. I just think you underestimate how robust the exchange ecosystem is (it would be nothing like Mt. Gox in 2014) and more importantly, how strong bubble psychology is. Bad news can't stop a bull market, let alone a bubble.

[bbc.reporter]

@exstasie. However, an overstatement or not, an immediate Tether takedown will cause a liquidity crisis. How fast will real dollars and Tether's competitors swallow up its market share without causing a big short? I speculate not fast enough. We cannot assume that the billions in Tether will be transfered to other stablecoins or real dollars in 1 day.

[palle11]

Also, the essence of my argument is not fud. It is to warn us from making similar mistakes made by those overconfident people during the real big short.

Is there really someone that is doing mistake in bitcoin or cryptocurrency, I don't think because everyone is taking chance in speculation of price move. You are not sure of it until it is done, you just have move and not to show even regret.

[Fortify]

There have been many scams in bitcoin, ever since the Mt Gox. exchange imploded many years ago. I'm not sure that any one exchange (beyond maybe coinbase) has the potential to blow up the system and it certainly wouldn't have the same effect or scale as the Big Short film portrayed. The big short film represented the subprime mortgage crisis which involved trillions of dollars and the potential to lead the world into a depression if it was not handled well. One exchange going down would hurt many people, but it would not have a destabilizing effect on the world economy.

[exstasie]

@exstasie. However, an overstatement or not, an immediate Tether takedown will cause a liquidity crisis.

How so? Could you elaborate?

The immediate liquidity crisis, as I see it, would be out of USDT and therefore into cryptocurrencies.

How fast will real dollars and Tether's competitors swallow up its market share without causing a big short? I speculate not fast enough. We cannot assume that the billions in Tether will be transfered to other stablecoins or real dollars in 1 day.

Tether holders would absorb losses, whether by panic buying out of USDT or by waiting for a bankruptcy or similar action. I still maintain that whether this causes a serious crash or prolonged downtrend depends on the underlying market trend. If they take Tether down in the middle of a bubble (like 2017) it won't stop the bulls, anymore than when the Chinese exchanges were shut down.

[philipma1957]

According to Chris Larsen, co-founder and executive chairman of Ripple Labs, the company is likely to move its headquarters overseas because due to the regulatory stance of the federal government towards the crypto industry.

No one can touch ripple labs. They are bankers. They will simply pay huge fines and just continue doing whatever they are doing.


For McAfee. He total understood crypto long time ago. But still acted totally dumb. I will never understand him.

coke steroids lots of women  will make a lot of men act badly.

[bbc.reporter]

@exstasie. However, an overstatement or not, an immediate Tether takedown will cause a liquidity crisis.

How so? Could you elaborate?

The immediate liquidity crisis, as I see it, would be out of USDT and therefore into cryptocurrencies.

How fast will real dollars and Tether's competitors swallow up its market share without causing a big short? I speculate not fast enough. We cannot assume that the billions in Tether will be transfered to other stablecoins or real dollars in 1 day.

Tether holders would absorb losses, whether by panic buying out of USDT or by waiting for a bankruptcy or similar action. I still maintain that whether this causes a serious crash or prolonged downtrend depends on the underlying market trend. If they take Tether down in the middle of a bubble (like 2017) it won't stop the bulls, anymore than when the Chinese exchanges were shut down.

However, you do not see the other side of the argument. Tether could arguably be the one that supports or one that mostly supports the cryptospace market. Taking it down would be similar to taking away the foundation and cause it to fall.

How would the Tether holders exit Tether if it was taken down by the exchanges?

Also this article.


Did you know that each time Tether is traded a small fee is charged, and that they can just change the fees and terms of their contract at any time??

There is no possibility for transparency because this contract has a backdoor that allows the owner to change the terms at any point:

Source https://inst.medium.com/tethers-fees-4f1ce048bfba

Tether in Ethereum might be easy to takedown if declared illegal and if ordered to cease operation by the government.

@Fortify. Agreed. This is only the cryptospace edition hehe. Also, markets always recover.

[estenity]

@extasie
don't you think that, out of an attack on bitfinex/tether/usdt, an analogous crisis could be engineered by an attack on defi and stablecoins, whose generalization results in a big problem for central banks of the world?

[exstasie]

However, you do not see the other side of the argument. Tether could arguably be the one that supports or one that mostly supports the cryptospace market. Taking it down would be similar to taking away the foundation and cause it to fall.

Tether is an important part of the ecosystem, sure, but to suggest the entire crypto space would collapse without it is nonsense. Exchanges are completely insulated from Tether's collapse; it's only USDT depositors that are exposed. I also maintain that this is not 2014; one exchange being taken down will not have the same effect as Mt. Gox did back then. And like I said, a lot depends if there is an underlying bull or bear market when it happens. I think I gave some pretty good examples of how bad news never stops a bubble.

How would the Tether holders exit Tether if it was taken down by the exchanges?

I don't think they would all do that, and certainly not immediately.

[bbc.reporter]

You might be wrong in speculating that exchanges are completely insinuated if Tether collapses. Many of them depend on the liquidity to maintain their orderbooks. I would speculate that a liquidity crisis might force some exchanges to suspend and close their service.

Also, why would it depend if it is a bull or bear market? I would argue a Tether takedown would be the beginning of a new bear market.

[error08]

You might be wrong in speculating that exchanges are completely insinuated if Tether collapses. Many of them depend on the liquidity to maintain their orderbooks. I would speculate that a liquidity crisis might force some exchanges to suspend and close their service.

Also, why would it depend if it is a bull or bear market? I would argue a Tether takedown would be the beginning of a new bear market.

Tether's credibility has been in doubt for years and has been encountered lawsuit, it is an unwise decision if the exchange's liquidity backed by USDT, they just list it for traders but hopefully don't hold it as a reserve.

"Kiana Shek, Digifinex’s co-founder, told CoinDesk she’d been “looking for ways to get rid of USDT” for months, adding, “I simply don’t believe in tether but I had no choice” but to list it.^[1]

If Tether will be takedown, then every trader who holds it will suffer losses but won't affect the whole crypto market significantly to cause a new bear market.

[exstasie]

You might be wrong in speculating that exchanges are completely insinuated if Tether collapses. Many of them depend on the liquidity to maintain their orderbooks. I would speculate that a liquidity crisis might force some exchanges to suspend and close their service.

If altcoin exchanges have thin order books because volume hasn't yet moved to other stablecoins like USDC and BUSD, I don't think that qualifies as a liquidity crisis. And there's no way any exchanges would suspend service just because they list Tether markets. They can still make good on all their obligations to depositors.

Also, why would it depend if it is a bull or bear market?

Because underlying supply and demand is much more powerful than any news item, even an important exchange going down. I just gave you several real life examples from 2017 that show this. An observable phenomenon: novice traders always blame news for price moves, whereas experienced traders don't.

I would argue a Tether takedown would be the beginning of a new bear market.

You might be right, but only because of timing.

Let's agree to disagree. We're starting to go in circles......

[bbc.reporter]

How would it not be a liquidity crisis if leading exchanges that has billions in their orderbooks before Tether takedown would only have millions after takedown? The cryptospace markets will be shocked.

Who said a Tether takedown would only be news?

I hope I will not be right, however, I reckon I would only be right because of fear, panic and low liquidity caused by a Tether takedown.

Agreed hehe.

[exstasie]

How would it not be a liquidity crisis if leading exchanges that has billions in their orderbooks before Tether takedown would only have millions after takedown? The cryptospace markets will be shocked.

Do me a favor and explain exactly what you're saying will happen, step by step.

Who said a Tether takedown would only be news?

Semantics.

Fine, the Chinese exchanges getting shut down and BTC-e getting shut down in 2017, those weren't just "news" either. And yet, those events didn't stop the bubble did they?

Don't tell me Huobi, Okcoin, BTCC and BTC-e were irrelevant in 2017. Any old timer will tell you differently.

Just look at what's happening with Bitmex, with owners under indictment and arrested by the US government. We're talking about the most liquid BTC derivatives exchange in the world. Do you see the market giving a shit? No, BTC is threatening to break above yearly resistance instead.