The Warm Fuzzy Feeling Of Too Much Regulation

[dkbit98]

They did a bail-in in Cyprus in 2013. People complained, so I don't think they'll do that again. Instead, they just went full BRRR and now take much more money through inflation than they ever could from a bail-in.

Why doing BRRR again (that never stopped or slowed down) when they are already working on CBDC that would ''fix'' all the ''problems'' they had with current fiat currencies?
Remove cash, track and trace everything people are doing, automatic tax reduction, send people digital money with expiration dates, etc.
I think all this circus we see in the world for last few years is connected with this.

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[o_e_l_e_o]

That makes me think the "insured amounts" aren't there to protect citizens, it's meant to protect the banks. Without that guarantee, banks wouldn't be trusted.

10 years ago I might have agreed with you, that the average person isn't going to leave their hard earned money with an uninsured third party with absolutely no ownership rights or no guarantee of getting it back. Then crypto came along, and with that the rise of centralized exchanges, lending platforms, and web wallets, doing exactly that to the tune of hundreds of billions of dollars. All you have to do is totally promise to pay some interest and people will trust you with their money. Insurance is unnecessary for the majority.

It more and more feels like fiat money itself is a scam.

Insert quote about if people understood fiat they would revolt.

[DaveF]

....That makes me think the "insured amounts" aren't there to protect citizens, it's meant to protect the banks. Without that guarantee, banks wouldn't be trusted.

There are actually quite a few banks that don't have FDIC insurance (or the version that credit unions use). They tend to offer better rates on savings / CDs and worse on loans. They also offer loans / other products to people that the FDIC would not allow. Most of them are small and do fail, but they are out there.

...that is like putting dead patient on ventilator and keeping him alive artificially....

Which is done when you want to harvest someones organs for transplant.
It happened a lot in the .com meltdown. The salvageable loans were sold to other banks the bad loans were sold to debt collectors. People with checking / savings / whatever in the bank were getting paid from those funds and then insurance paid out on the rest. BUT that process could take a while so the bank was still operating.
Due to the number of bad loans and everything else that could not happen in 2008.

As a rule banks are stronger now due to tightened regulations by many regulators and oddly enough for the larger ones, the shareholders. The larger more stable investors in banks want long term stable profits, not quick in and out hits. Even if with inflation they are 'loosing' money only making 3.5% dividends per year people want that to be stable. There are more then enough high risk involvements out there that may or may not pay better.

-Dave

[DaveF]

So, here we are 3 months later and a really good implosion later. Anybody have any other views?

I still don't have any real funds that I need / count on stored in any exchanges.

At the moment I do have 1.5ETH sitting in coinbase that was paid to me as part of a debt, that I never thought I was getting paid back on so if it goes away I am no worse off then a month ago, I'm waiting for an increase in price have a sell in at $1515 before trading it to BTC and puling it out. But if it was sent to me in some sketchy (IMO) exchange I would have pulled it out in a minute.

But beyond that, probably under $50 total.*

Anybody else seeing anything else. You HEAR about the people pulling funds out, you HEAR about the spike in hardware wallet sales. Is anyone seeing people actually doing it?

-Dave

*Also, I do have a bunch in Gemini from their credit card rewards, but it's not being pulled out for tax reasons will fix that Jan 2nd....

[o_e_l_e_o]

You HEAR about the people pulling funds out, you HEAR about the spike in hardware wallet sales. Is anyone seeing people actually doing it?

I've never had any funds on centralized exchanges to begin with, so nothing to withdraw. The people I know locally who are involved in bitcoin are people I trade peer to peer with, so we rarely (or indeed never) talk about centralized exchanges. So I suppose the best I can go on is the general feeling on here and on Reddit, and the reports/data about what is happening.

Trezor report a surge in sales of 300% since FTX collapsed: https://cointelegraph.com/news/trezor-reports-300-surge-in-sales-revenue-due-to-ftx-contagion
Large outflows of bitcoin from centralized exchanges, with the amount being stored on centralized exchanges now at the lowest since early 2018: https://nitter.it/glassnode/status/1591943265296998400

[AverageGlabella]

Trezor report a surge in sales of 300% since FTX collapsed: https://cointelegraph.com/news/trezor-reports-300-surge-in-sales-revenue-due-to-ftx-contagion
Large outflows of bitcoin from centralized exchanges, with the amount being stored on centralized exchanges now at the lowest since early 2018: https://nitter.it/glassnode/status/1591943265296998400

Which is great to see but other exchanges have probably had a influx of new users signing up and depositing money on their exchange. I would love to see more people convert to hardware wallets and take control but I do not think the majority of people will learn their lesson from this. This will be forgotten about in a years time and only referenced in history and in the next couple of years another exchange will go down and we will go through the same cycle every time. Maybe I am pessimistic in peoples ability to learn from their mistakes but this has happened how many times in the past and we are still talking about custodial and non custodial like it is a new concept.

[DaveF]

You HEAR about the people pulling funds out, you HEAR about the spike in hardware wallet sales. Is anyone seeing people actually doing it?

I've never had any funds on centralized exchanges to begin with, so nothing to withdraw. The people I know locally who are involved in bitcoin are people I trade peer to peer with, so we rarely (or indeed never) talk about centralized exchanges. So I suppose the best I can go on is the general feeling on here and on Reddit, and the reports/data about what is happening.

Trezor report a surge in sales of 300% since FTX collapsed: https://cointelegraph.com/news/trezor-reports-300-surge-in-sales-revenue-due-to-ftx-contagion
Large outflows of bitcoin from centralized exchanges, with the amount being stored on centralized exchanges now at the lowest since early 2018: https://nitter.it/glassnode/status/1591943265296998400

The thing I am looking for about the outflows is, is it 500 individuals pulling out their 0.5BTC or 1 major institution puling out 250BTC?
Same result for the amount moving out, but the way it happens matters.
Also, allowing for shipping and delivery and setup and everything else, how many of those sold hardware wallets are in use?

Individually here we are a small microcosm of the BTC world. I would also like to think that overall as a group we do know more and we try to convince our friends to know more. But, once we get away from that I just can't get a feel for who is doing what.

-Dave

[LoyceV]

You HEAR about the people pulling funds out, you HEAR about the spike in hardware wallet sales. Is anyone seeing people actually doing it?

I saw myself withdraw everything that isn't locked in open trades. I like to keep my small-scale price speculation going.

Large outflows of bitcoin from centralized exchanges, with the amount being stored on centralized exchanges now at the lowest since early 2018: https://nitter.it/glassnode/status/1591943265296998400

Wait, what are we looking at here? The graph shows there's about 2.25 million Bitcoin on exchanges. Yesterday, listening to the Cryptocast on the radio, they said FTX had about 18 thousand Bitcoin in user balances, but they didn't have any Bitcoin left to cover them. So this 2.25 million Bitcoin: is that the amount found on the blockchain on addresses known to belong to exchanges? Or is it the amount in all user accounts on those exchanges? Because those two are not necessarily the same! If they have 2.25 million Bitcoin on-chain, it could very well be customers have 3 million "Bitcoins" in their accounts. Or 30 million "Bitcoins".

Maybe I am pessimistic in peoples ability to learn from their mistakes but this has happened how many times in the past and we are still talking about custodial and non custodial like it is a new concept.

I'm pretty sure the ones who lost money learned from it, but there are about 8 billion others who haven't lost any money yet. So they haven't learned it "the hard way", and should ideally learn from someone else's mistakes. As they say: "Those who cannot remember the past are condemned to repeat it".

[o_e_l_e_o]

Which is great to see but other exchanges have probably had a influx of new users signing up and depositing money on their exchange.

Probably, but those figures are still net change. So any new deposits are being cancelled out and more by withdrawals.

The thing I am looking for about the outflows is, is it 500 individuals pulling out their 0.5BTC or 1 major institution puling out 250BTC?

Not sure such data exists, but I suppose you could trawl through some Binance or Coinbase withdrawal transactions and see the general trend. I would imagine it would be a mix of both.

So this 2.25 million Bitcoin: is that the amount found on the blockchain on addresses known to belong to exchanges? Or is it the amount in all user accounts on those exchanges?

It's the amount on the blockchain. If you click on the link on the tweet I shared above, it directs you to the glassnode page where they explain their methodology:

These metrics utilize glassnode's entity-adjustment clustering algorithms, to provide a best estimate of the true balance held by each cohort.

They of course wouldn't be able to have data on how much is in all the accounts on an exchange unless the exchange chose to share those data, and of course no exchange is going to share data which show them to be insolvent.

[LoyceV]

They of course wouldn't be able to have data on how much is in all the accounts on an exchange unless the exchange chose to share those data, and of course no exchange is going to share data which show them to be insolvent.

This is truely the amazing part: with banks, we're completely used to them being insolvent. In my country, it's actually illegal to call for a bank run! You can get up to 4 years in prison if you publicly suggest many people to take "their own" money from the bank. And even worse, even if you can get your money out, all you get is some piece of paper that came out of BRRR.
So we're completely used to banks not having any money. Bitcoin was supposed to be different. The last part is still true: Bitcoin is different. But many users seem to want the same.

[o_e_l_e_o]

In my country, it's actually illegal to call for a bank run! You can get up to 4 years in prison if you publicly suggest many people to take "their own" money from the bank.

Pretty astonishing that the monetary system of entire nations is so fragile that they have to make it illegal to even suggest that people should own their own money.

So we're completely used to banks not having any money.

I'm not sure so much that we are used to it, but more that the vast majority of people do not understand how banks function. I would bet that >90% of people couldn't explain fractional reserve banking and don't know that when you take out a loan from a bank that is brand new money being created out of nothing and entering circulation.

The last part is still true: Bitcoin is different. But many users seem to want the same.

Bitcoin is different. But centralized exchanges are essentially banks, but without following any regulations or laws.

[DaveF]

The thing I am looking for about the outflows is, is it 500 individuals pulling out their 0.5BTC or 1 major institution puling out 250BTC?

Not sure such data exists, but I suppose you could trawl through some Binance or Coinbase withdrawal transactions and see the general trend. I would imagine it would be a mix of both.

I have a gut feeling that people are stupid and a lot is coming from institutions bringing their BTC back in house so they can say "see we have it, it does exist, and it's not where other people can get to it"

In the end it probably does not matter, there were people putting money into a lot of things both crypto and non crypto that were obviously going to fail. There are people who keep more money then they should in unsafe ways. Lets face it, that box in the attic is safe, well except for fire, water damage, theft, depending on where you are animals nesting in it, but yes people still tell me it's safe.

-Dave