nrd525 Market Tracker

[nrd525]

Yeah, I'm not dumping Segwit2x coins.   Wait to see how it goes.

Also we really need an IRS ruling on cryptocurrency splits.

[FiendCoin]

The IRS won't make any beneficial rulings for users, it goes against their very nature.

The only hope for crypto tax wise is Congress but seeing how they can't get anything done (unless you are wealthy special interest and have republicans in your pocket) I wouldn't hold out hope for the foreseeable future.

[nrd525]

Has anyone tried this? Basically hold BTC at Bitmex and then earn interest by shorting it.  I have no idea what the tax implications are.  If it just counted as interest that would be fine. If it counts (if BTC goes up) as possibly large capital gains and non-deductible interest losses - then it would be very bad tax wise.

https://www.reddit.com/r/BitcoinMarkets/comments/78l5ry/what_are_the_cons_for_the_following_btc_cash_and/

Bitmex also doesn't allow US residents.  So you'd need a VPN, or maybe an offshore LLC.

It looks like the swap rates are higher than Bitfinex, but they can actually go negative.  Does anyone know what the return on this would be over the past year?  Also - what would happen with forks?

[nrd525]

With an increasing bitcoin economy there is a greater likelihood that a major exchange will be hacked, that a ponzi will collapse, or that an ICO will be hacked/pull a scam/do something stupid.  Bitconnect and Regal Coin seem primed for collapse.  There are also a growing number of previously minor exchanges that are now important.

Of course we also have more resiliance.

[nrd525]

Any ideas on how to get a journalist to pick up the BitConnect ponzi scheme story?  I emailed a tip to the editors@Vice.com - but I'm not that good at pitching news stories.

"Pitch: Billion dollar Bitcoin ponzi scheme thrives on YouTube"

Perhaps if we could find a mainstream journalist that covers either Bitcoin or Ponzis and pitch it directly to them (and then they'd pitch to the editor).  Hmm, is any main news outlet owned by a YouTube competitor?  They might love running a story critical of their competitor

...

Bitcoin 6400 new ATH. 

Segwit 2x is super stable in price at 0.15 BTC on Bitfinex.

[posi]

Any ideas on how to get a journalist to pick up the BitConnect ponzi scheme story?  I emailed a tip to the editors@Vice.com - but I'm not that good at pitching news stories.

"Pitch: Billion dollar Bitcoin ponzi scheme thrives on YouTube"

Perhaps if we could find a mainstream journalist that covers either Bitcoin or Ponzis and pitch it directly to them (and then they'd pitch to the editor).  Hmm, is any main news outlet owned by a YouTube competitor?  They might love running a story critical of their competitor

...

Bitcoin 6400 new ATH. 

Segwit 2x is super stable in price at 0.15 BTC on Bitfinex.

Yes, SegWit2x is knew for pumping the price of bitcoin and I'm happy that the new ATH is $6400. Concerning, the ponzi scheme I think OgNasty will know from bitcoin news site since he was the manager of their signature campaign back in the day.

[nrd525]

Maybe a good policy for supporting forks is that you will give people the new coin if the fork's price exceeds say 2% BTC (averaged over a week) and has replay protection.

Bitcoin gold is currently trading at almost 4% BTC - so if it sustains the price it might be worth supporting, and the Segwit2x coin might as well (if it happens).

[nrd525]

Bitcoin forks are currently trading at 18% of the price of Bitcoin.  14% for Bitcoin Cash and 4% for Bitcoin Gold - with very strong pumps on both.  Also the Segwit2x coin is trading at 4%.  Crazy times.

[Samarkand]

Bitcoin forks are currently trading at 18% of the price of Bitcoin.  14% for Bitcoin Cash and 4% for Bitcoin Gold - with very strong pumps on both.  Also the Segwit2x coin is trading at 4%.  Crazy times.

I think you should view the Bitcoin Cash pump with a healthy scepticism.

Take a look at the biggest exchanges by volume and you will see that
41.24% of trading volume has taken place at Bithumb (Korean exchange) in the last 24 hours.

https://coinmarketcap.com/currencies/bitcoin-cash/#markets

People with certain accounts or vouchers (you can actually buy them) are able to trade at Bithumb completely without fees, which enables
people to wash trade by essentially buying and selling into their own orders. This is basically the same situation that
existed at the Chinese exchanges back in the day.

[nrd525]

The candle that had BTC shoot up to 7900 had people like Tone Vays (and others) calling it the annual top.  So that combined with the cancellation of the Segwit2x hard fork - makes it a pretty good time to attack Bitcoin and try to replace it with Bitcoin Cash (and even sketchier projects like Bitcoin Gold).

I'm still super skeptical about merchant and general community adoption.

On the other hand, I've definitely been wrong about alt-coins being a bad investment.

There might be a lot of people who are rich due to the Bitcoin and Alt-coin bull markets who have decided they are smarter than they actually are (basically we mostly all got very lucky), and that they are capable of making even more money by having Bitcoin Cash replace (or steal half or most of its community) Bitcoin.

[nrd525]

Bitcoin Cash 25% of BTC and Bitcoin Gold 6% of BTC.

This looks like the biggest pump in Bitcoin (and crypto currency) history.  It's based on greed and some classic pump/dump methods.  Hard to say when it will top, but I think soon.

One of the dangers of Bitcoin just being a store of value is that you don't need merchant adoption.  The exchanges will rollover competing with themselves (except possibly Coinbase which is slow to add new coins).  And with so much money involved you could easily train and/or buy the best developers.  It might take a while to get them up to speed and to build community trust though.

[nrd525]

If you're going to pump crypto currency, do it on Saturday night!

That was the most epic pump I've ever seen when you consider both market cap and percent.  Then BCH/BTC fell 26% in one minute on BFX!  I think the pump was so far outside of the realm of the imaginable that most traders stayed far away from it.  As such, there was relatively little shorting and BCH was able to go up to 53% of BTC on Bitfinex.  Fortunately I didn't short it.

With this as a precedent, we're likely to see a growing number of forks of Bitcoin and forks of forks.  At some point reality might set in, but it if doesn't the forks will create their own communities with people who have millions to lose or gain based on their outcome they may be driven enough to succeed.

[nrd525]

With billions of dollars at stake and millions of dollars to invest, Bitcoin Cash (and Gold) can afford to buy/hire a strong team of developers.  The level of potential financial resources available to alt-coins, ICOs, and Bitcoin forks is unprecedented this year when compared to 2016 and before.

The new developers are likely to have less experience and community trust, but they should be able to do a good job and reduce the chance of a major bug that could lead to a hack.  Especially if the crypto-currency is run by a team that is competent and open to suggestions.  And it helps if they can rely upon work from similar projects. For instance, Ethereum gets to make new bugs/mistakes (like the DAO, and the latest bug that caused people to have their funds stuck or lost) because it is very different from Bitcoin.

--

Got all my money out of Bitfinex as I'm a US resident. So now I've got a lot of funds that aren't doing anything.  Hopefully I'll setup a US LLC to lend money on Bitfinex.  Otherwise I might put some funds in the US stock market - but it's pretty high.  I don't want to put more money into Bitcoin unless it falls dramatically (aka $2000 or less).

[Samarkand]

...So now I've got a lot of funds that aren't doing anything.  Hopefully I'll setup a US LLC to lend money on Bitfinex.  Otherwise I might put some funds in the US stock market - but it's pretty high.  I don't want to put more money into Bitcoin unless it falls dramatically (aka $2000 or less).

I´m pretty sure that the expected value of investing in Bitcoin directly is higher than lending money on Bitfinex - even at the current BTC price level.
This is assuming that you can endure a short-term drawdown if it would occur, which obviously can´t happen if you decide to lend the funds at BFX.

Investing in BTC directly would also save you the hassle and the costs of setting up a US LLC.

Another argument in favor of buying BTC directly is that you can take advantage of upcoming forks, which basically
is like receiving a dividend payment everytime it happens (of course you have to make sure that you don´t do anything
wrong or fall for a scam wallet while splitting your coins).

[nrd525]

I've got Bitcoins. I'm diversifying.  I think Bitcoin could fall 90% in a year and stay down there for a year.  Or it could even be replaced.

That said, this Tether story is beginning to look a bit scarier.  Making me a bit skeptical of loaning BFX USD swaps.

https://www.reddit.com/r/Bitcoin/comments/7eex7c/tether_critical_announcement_30950010_usdt_was/

And really bad audio interview of anonymous user "Bitfinexed" who is arguing that Tether is problematic, and "Flibbr" (with much better audio - which gives him the advantage) who is arguing that there is no problem.
https://www.youtube.com/watch?v=TerIjELO7IY

There is also a possible regulatory issue. If Bitfinex runs afoul of regulators, and they already are unable to use regular banking - how are they going to survive?  As a crypto only exchange I think they'd lose most of their market share.

I think the forks aren't dividends.  They are extracting value from Bitcoin and over time they will become increasingly less valuable and ignored.  They're only succeeding because we're in a super-frothy part of the bull market and very near the top.  Eg. people will buy anything without due diligence.

Bitcoin attracts tons of scammers, but it also attracts conspiracy theorists. So you need to be skeptical about the skeptics as well as all the projects and people.

[TheQuin]

There is also a possible regulatory issue. If Bitfinex runs afoul of regulators, and they already are unable to use regular banking - how are they going to survive?  As a crypto only exchange I think they'd lose most of their market share.

That is what Tether is all about, allowing exchanges to trade USD and reduce the risk of regulatory intervention. Tether's banks stopped receiving international wires but still accept USD deposits from Tawainese bank accounts. This has the effect of barring retail traders and only being open to large institutional clients and wealthy individuals, those who can get access to Tawainese banking facilities.  It is a lot easier for them to verify that these funds are from legitimate sources than trying to find out if every retail customer is a funded by a Columbian drug cartel.

Bitcoin attracts tons of scammers, but it also attracts conspiracy theorists. So you need to be skeptical about the skeptics as well as all the projects and people.

Very well put. So far the Tether business looks like classic conspiracy theory material. Lots of anonymous people pointing at partial facts that are easy to frame as being suspicious, but no real substance behind them. That being said I only have a small proportion of my holdings at Bitfinex as I've been around long enough to know how quickly the picture can change.

I think the forks aren't dividends.  They are extracting value from Bitcoin and over time they will become increasingly less valuable and ignored.  They're only succeeding because we're in a super-frothy part of the bull market and very near the top.  Eg. people will buy anything without due diligence.

True, we'll struggle to remember the names of them in a few years.

Interesting thread, I wish I had found it sooner. Thanks for sharing your thoughts.

[nrd525]

An interesting point from Tone Vays is that it can be (according to some lawyers) a larger crime if you try to avoid regulation intentionally.  So creating an instrument like Tether, if done so intentionally, is worse than just violating the AML/KYC laws directly.

Of course Tone Vays is very opionated and not always correct.

The possible precedent is E-Gold. They were shutdown harshly by the US government.

...

According to Reddit, Bitfinex just started allowing in/out wires for individual customers in USD. So they are either in the last throws of an exit scam (unlikely) or things are looking very positive.

...

The World Crypto Network video was very bad for the pro-Bitfinex side. Flibbr was butchering the arguments and resorting to poorly designed attacks.  Possibly because he really doesn't know what is going on with Bitfinex.  But if they fix their banking then most people will be happy. Unless of course the number of Tether continues to increase exponentially...

[nrd525]

Bitfinex USD swaps are at $497 million at the price bounced off 9998 =)

https://www.bfxdata.com/swaphistory/usd

That is up a lot from January ($30 million) or July 2016 ($40 million).  July 2016 was higher because it was before the hack.

I have no idea what is going on with the market.  We seem to forget things like the Chinese exchanges being closed.

I'd expect a blow-off top (ex a 5-10% increase in a single hour, followed by a 30% correction and then a bear market). But instead we're going up more steadily than I'd expect.  Maybe the internationalization of the market which includes trading in different currencies as well as markets having different premiums has made numbers like $10,000 USD less significant?

If I could pay the long term capital gains rate, I'd be more tempted to sell some BTC.  But as it is, I'm holding.

[FiendCoin]

Bitfinex USD swaps are at $497 million at the price bounced off 9998 =)

https://www.bfxdata.com/swaphistory/usd

That is up a lot from January ($30 million) or July 2016 ($40 million).  July 2016 was higher because it was before the hack.

I have no idea what is going on with the market.  We seem to forget things like the Chinese exchanges being closed.

I'd expect a blow-off top (ex a 5-10% increase in a single hour, followed by a 30% correction and then a bear market). But instead we're going up more steadily than I'd expect.  Maybe the internationalization of the market which includes trading in different currencies as well as markets having different premiums has made numbers like $10,000 USD less significant?

If I could pay the long term capital gains rate, I'd be more tempted to sell some BTC.  But as it is, I'm holding.

I'm going to sell 2% of my holdings soon and have a VERY merry Christmas and I wish everyone the same!

[nrd525]

Oops.

So I've been using cost-averaging as an accounting method. You can do this for mutual funds, but for Bitcoin you need LIFO, FIFO, or offsetting lots.
https://www.investopedia.com/university/definitive-bitcoin-tax-guide-dont-let-irs-snow-you/definitive-bitcoin-tax-guide-chapter-1-trading-gains-and-losses-c-lifo-fifo-offsetting-lots.asp

Pro - my federal capital gains tax rate just went to zero.  And at these prices I might even sell some more as I'm solidly in the longterm rate.

Negative - I get to refile all my returns for past years and change my accounting method.  And maybe need to talk to a tax accountant?