nrd525 Market Tracker

[nrd525]

Bicoin Classic vs Bitcoin Unlimited FUD is back and price is down to $1080 and falling.  It is a serious issue, but also one that is eventually going to get figured out - most likely without a hard fork (or a hard fork that is more than 10% of the network).

Or maybe this is a real matter.  As the price is falling a lot and Bitbet seems to think it is possible that Bitcoin Unlimited could even surpass Classic.

https://bitbet.us/bet/1353/bitcoin-unlimited-takeover-in-2017/

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[nrd525]

So it looks like mining support for Bitcoin Unlimited is growing.  Also we have at least three main groups 1) Segwit (soft fork, double transactions), 2) Bitcoin Unlimited (hard fork, exponential increase in transactions) and 3) Bitcoin classic (no fork, run out of space for transactions) that each have roughly 1/3 support.

BFX down to 940 and then recovered to 980.  BTC swap rates at Bitfinex up to 0.2%/day (unfortunately I'm locked in at a much lower rate).

I guess this is bigger than the last developer drama due to an increasing number of miners that are signaling their interested in either Segwit or Bitcoin Unlimited.

[RoadTrain]

I think it's worth mentioning that many exchanges, BFX included, signed an Industry Statement Regarding Hardfork Event.

The most important is that they will designate Bitcoin Unlimited as a different coin (BTU). They also request that protection against replay attacks is in place if a fork happens.

This effectively devalues all the attempts by BTU to replace BTC. Instead, it will be treated as an altcoin by the signatory exchanges/businesses.

That's what I understood from this statement.

[RoadTrain]

Story continues...
Chain Split Tokens

Today, Bitfinex proudly introduces trading on Chain Split Tokens (CST). The first such product of its kind, CSTs will allow Bitfinex customers to speculate on future fork events of the Bitcoin blockchain, specifically, the potential fork between Bitcoin Core and Bitcoin Unlimited.[...]

Users will be able to create CSTs by “splitting” a bitcoin through the Token Manager (located in the Order Type drop down menu of the sidebar order ticket). Once split, the BTC will be removed from your account for each BCC and BCU added. Through the same Token Manager, you will be able to reverse this process at anytime, trading in equal numbers of BCC and BCU to extract BTC.

If no fork occurs by December 31, 2017, then BCU will expire worthless and BTC will be given in exchange for each BCC holder. If, however, there is a fork, specifically Bitcoin Unlimited, then, as soon as we list Bitcoin Unlimited, we will exchange BCU tokens for Bitcoin Unlimited tokens as well as retiring BCC tokens in favor of Bitcoin Core tokens.[...]

[nrd525]

This is getting messy.  I liked the reddit post where they argued that the market will decide which chain is more important in the event of a fork, as miners will maximize profits by mining the most profitable chain and that will depend on market demand and supply.

The problem is that miners can signal whether they like large blocks, bitcoin classic, segwit, etc - but consumers cannot.  Really we need a way for the consumers to set the signal, so the miners can follow it.

This Bitfinex initiative is creative and will probably cause a lot of people to lose/gain huge amounts of money. It doesn't solve the signaling problem because the chains trade based on your expectation of what will happen, not what you want to happen (and the lack of a consumer signal method obscures what a purer market mechanism would decide).

Anyways, BCU (bitcoin unlimited) is trading at a massive $300 which means people are serious about the likelihood of not just the hard fork happening but of bitcoin unlimited winning it.

[nrd525]

Support for SegWit, Bitcoin Unlimited and various other stats:
https://coin.dance/blocks

Bitcoin Unlimited down to $240 on BFX.

[nrd525]

If I'm reading the charts right, the transaction fees are about 10% of the block reward.  So I'm unsure why miners are being stupid and opposing SegWit to maximize their small share of transaction fees. As by doing so, they are decreasing the price of Bitcoin by at least 10% in the short-term and possibly by 50% in the long term.

If they were acting as rational profit maximizers, they would be better served by focusing on the BTC price - at least until we have another two or three halvings of the block reward.  I'd be surprised if they were thinking about business 6+ years in the future as that is a very long time frame for Bitcoin.  Though maybe the Chinese are more likely to use a longer time frame than Americans (for instance their savings and investments rates are much higher than the US)?

If it isn't about profit maximization then it might be about ego / power.  If the Lightning Network (or others) take transactions off the blockchain, then the miners might lower power.

[nrd525]

Meanwhile price recovered to $1100 which is very strong.

[nrd525]

Then the price crashed to $888 and recovered to $1000. So lots of volatility!

Poloniex BTC swap rates at 0.18%/day -- good opportunity and probably worth the risk.

BFX BTC swap rates at 0.08%/day, which is much better than average but not as good as Poloniex.  Unfortunately most of mine are tied up for another 2 weeks at 0.0175%/day.

[nrd525]

Poloniex BTC swap rates are so high because in the event of a fork, you will only get BTC (classic) coins. You won't get BTU (unlimited) coins.  No wonder the rates are so high.  I'm surprised they aren't even higher than 0.2%/day.

https://poloniex.com/press-releases/2017.03.17-Hard-Fork/

By contrast, BFX will give lenders both.

[nrd525]

That Litecoin pump.   From $4 to $8 in under 24 hours.  Back down to $7 currently...

I'm bothered by the fact that we never got anywhere near a full story about the last Litecoin pump (and Chinese Litecoin ponzi).    I wonder if the unraveling of that ponzi and selling off of the LTC is what has been keeping LTC at $4 for the past year?  I never checked to see if the big LTC accounts transferred their coins.  They had a couple million LTC if I recall correctly.

[leowonderful]

That Litecoin pump.   From $4 to $8 in under 24 hours.  Back down to $7 currently...

I'm bothered by the fact that we never got anywhere near a full story about the last Litecoin pump (and Chinese Litecoin ponzi).    I wonder if the unraveling of that ponzi and selling off of the LTC is what has been keeping LTC at $4 for the past year?  I never checked to see if the big LTC accounts transferred their coins.  They had a couple million LTC if I recall correctly.

As many others have suggested, it's possible that people are suppressing the price of Bitcoin by selling and pumping it into other coins just to sell off later and gain more bitcoin, however unlikely that is. In terms of actual uses Litecoin is useless and it's had an interesting history like you said, I expect a downtrend in the price of LTC.

[york780]

Lol you guys still talk about litecoin? Watch ETC go omg 

[RoadTrain]

Bitfinex redeemed all the remaining BFX tokens. Didn't expect it to happen that fast.
https://www.bitfinex.com/posts/198

[nrd525]

That BFX token reimbursement is amazing.  Unfortunately I sold for 50 cents back in December.  I thought they'd take 7 years to repay or possibly more, but I guess people really wanted to buy their stock (and the BTC price went up around 80%).  Interestingly, both the hack and reimbursement are having little impact on swap rates. I would have expected swap rates to surge after the hack (but they didn't probably due to a lack of demand, and from people like me to decided to trust the company and keep our funds in it), and then to decline after reimbursement became likely.

I'll be very amazed if the RRT tokens ever amount to anything.  10 cents (and up 11% today).  I suppose if Bitfinex is feeling super generous they could reimburse them out of pocket, but I strongly doubt it.

[nrd525]

Litecoin bubble at $11 as they near Segwit activation.  How high will it go?  Presumably it will peak right before or during the point of segwit activation (assuming that happens).

[nrd525]

Feeling pretty good. My cost basis for BTC is around 325.  Last year I made around 1.7 BTC in interest on Poloniex (but haven't been doing any lending there in 2017).  By contrast I only made 0.18 BTC on Bitfinex.

Downside is that I should have bought more (aka bitfinex shouldn't have got hacked).  Not feeling like buying it at $1200.

Also this is only somewhat related, but the Kelly Criteria is an interesting system for investing (or betting, but don't take bets unless you have favorable odds):

http://www.albionresearch.com/kelly/default.php

In general for bets/investments you want to figure out the Expected Value. I've been referring to this for some predictions markets with binary outcomes. Obviously it is more complex with BTC as there are near infinite outcomes. So you really have a payoff matrix and you need to also take into account your risk tolerance.

[nrd525]

Bitfinex is having trouble sending out USD wires.  As a result BTC has a $30 premium over Coinbase and $44 over Bitstamp.  I was thinking about wiring some money there to lend out swaps, but now it looks like using BTC to send it is much better.   Except that I'm using cost-averaging for my tax basis - so buying 5 BTC on Coinbase and then reselling them on Bitfinex would trigger $700-$800/capital gains per BTC, not $30.

I wish I could separate my bitcoins into two accounts, so they could have separate cost basis. I think you can do this if they are held in separate accounts, but if they are both held at Bitfinex then you cannot.  And I want to have there because the swap rates are currently decent (0.03%-0.05%/day).

[nrd525]

Bitfinex says you can have multiple accounts (you need ID and multiple emails).

Bitfinex premium over Coinbase is up to $65 - and they've canceled incoming wires.

Do any US banks accept incoming wires in non-US currency?  If so, I'd expect the Bitfinex premium to be much smaller.  I'm tempted to buy some BTC on Coinbase and sell them on Bitfinex...

[nrd525]

I think Bitfinex should convert all the USD into more shares!