An interesting case of a widespread misconception

[figmentofmyass]

it makes a world of difference.

when the market is majorly short then moves up (causing would be sellers to pull asks) shorts are a powerful bullish force---big demand meets small supply. on the other hand when it moves down, technical selling pressure (outside of leveraged markets) dampens that effect.

Shorts don't appear out of nowhere

As a shorter, you have to buy back absolutely the same amount that you have sold earlier. So it is essentially a "zero-sum game" as far as the net effect is concerned.

that's only true in a vacuum, regarding each individual position. your point is irrelevant when you consider underlying supply and demand, since net shorts depend on existing sell liquidity to buy back.

there is a big difference between 20k BTC worth of shorts trapped in a losing position and zero shorts trapped in a losing position. in the former case, shorts will be forced to close (whether due to pain or margin requirements) into thin ask liquidity, strongly driving prices up. in the latter case, there is no effect on price.

this is why the term "short squeeze" exists at all. it doesn't matter if the net amount a shorter sells/buys back is the same. what matters is the existing market depth when they buy back.

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[deisik]

it makes a world of difference.

when the market is majorly short then moves up (causing would be sellers to pull asks) shorts are a powerful bullish force---big demand meets small supply. on the other hand when it moves down, technical selling pressure (outside of leveraged markets) dampens that effect.

Shorts don't appear out of nowhere

As a shorter, you have to buy back absolutely the same amount that you have sold earlier. So it is essentially a "zero-sum game" as far as the net effect is concerned.

that's only true in a vacuum, regarding each individual position. your point is irrelevant when you consider underlying supply and demand, since net shorts depend on existing sell liquidity to buy back

I'm not sure I'm able to decipher the meaning here

there is a big difference between 20k BTC worth of shorts trapped in a losing position and zero shorts trapped in a losing position. in the former case, shorts will be forced to close (whether due to pain or margin requirements) into thin ask liquidity, strongly driving prices up. in the latter case, there is no effect on price

It doesn't matter as far as "betting against Bitcoin" is concerned

Whether you are forced to buy or buy of your own accord only, you are betting in favor of Bitcoin. When you sell, either your own coins or borrowed ones, you are betting against Bitcoin. If you want to say that the same amount can produce a different effect, once sold on margin and then bought back, that may well be the case. But in general you don't know its direction and scale in advance, and thus can't say beforehand whether the net effect of short sells followed by buybacks is against or in favor of Bitcoin growth. All in all, it is a moot point, and can thus be safely discarded

And to hammer the final nail into the coffin of this logic, let me remind you that you can not only sell bitcoins on margin but also buy them with borrowed dollars, and then still end up forced to sell back when the price goes against you. So no matter how obscure and convoluted your reasons might be, they are instantly mirrored and negated by the same reasoning applied to the opposite pair of trades. And while we are at it, long squeezes seem to wreak more chaos in the markets, and instill greater fear in traders. I have yet to see a short squeeze of 50% with Bitcoin, given the current price levels

[Pumuckel21]

So the value of an asset, in this case bitcoin, get determined by the last matched order in an exhange. In his case it is multiple orders on mutliple excchanges. In the ccase all od bitcoin would have been sold once this consequently leads to big price dump

[coolcoinz]

I've actually given at least two different explanations

First, you should specify what goods and services make up "the purchasing power of the dollar". For example, I could easily prove that the dollar purchasing power rose a few hundred times during the last 30 years if we gauge it in, say, processing power or storage capacity of modern computers

Then, you should necessarily examine the change in the dollar value in terms of wages and their dynamic. Without setting an appropriate frame of reference (wages), all this whining about dollar losing its purchasing power is meaningless. But if you don't understand it and don't want to, I can’t force it unto you

I'm always up for a conversation, if you think it's meaningless we can stop. No harm done if you ask me.

Usually people don't describe it by comparing the old technology with the modern one. You cannot compare the power of the dollar in the 80s with today by trying to compare the cost of a computer hard drive because the manufacturing has changed so drastically. For the same reason you cannot compare the cost of automobiles in 1920 and 1960, it's pointless.
These statistics usually come from the basic items of need like a loaf of bread or a pack of sugar. A good example is the good old big mac index, although it's rather used to compare individual countries.

Do you have any stats to prove this claim?

You can google it, the same charts can be found all over the Internet.
https://wolfstreet.com/2018/06/12/dollars-purchasing-power-drops-2-9-in-may-from-year-ago/
https://www.in2013dollars.com/us/inflation/1970?amount=1

[deisik]

Then, you should necessarily examine the change in the dollar value in terms of wages and their dynamic. Without setting an appropriate frame of reference (wages), all this whining about dollar losing its purchasing power is meaningless. But if you don't understand it and don't want to, I can’t force it unto you

I'm always up for a conversation, if you think it's meaningless we can stop. No harm done if you ask me.

Usually people don't describe it by comparing the old technology with the modern one. You cannot compare the power of the dollar in the 80s with today by trying to compare the cost of a computer hard drive because the manufacturing has changed so drastically

Then stop talking about the purchasing power of the dollar altogether

Since the purchasing power of the dollar is not some abstract concept but what you can actually buy with it. If you take 100 years (as this is the period which typically emerges in such discussions), the manufacturing of virtually everything has changed so dramatically that it is almost impossible to make meaningful comparisons (let alone 90% of today's things didn't even exist 100 years ago)

You can google it, the same charts can be found all over the Internet.
https://wolfstreet.com/2018/06/12/dollars-purchasing-power-drops-2-9-in-may-from-year-ago/
https://www.in2013dollars.com/us/inflation/1970?amount=1

I was almost certain that you would come up with inflation rates. Now you can easily compare these figures against wages to see if people actually lost any purchasing power