Gold collapsing. Bitcoin UP.

[cypherdoc]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Yes, agreed. I haven't read too deeply on SecondMarket's plans - why is Barry going that route? He seems to otherwise be spot-on with all things bitcoin/markets related.

he clearly stands to make a killing in USD terms if this goes thru.

even ardent Bitcoin supporters can sometimes lose perspective.

edit:  it's actually also possible he and Second Market lost a significant amount of money via mtgox.  i know they had a local branch there in Tokyo near mtgox to facitate tx's in Yen.

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[chriswilmer]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Is it really that bad? My assumption is that they can't really affect the market too much when they "fix" the price. It's not like Bitstamp is going to disappear. If Barry wants to fix the price, he's going to have to look at Bitstamp himself (as well as all other exchanges) and then fix the price pretty close to what the market thinks is fair anyway. Right?

[cypherdoc]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

I'm out of my depth here, but I wonder if they will have a more difficult time "fixing" Bitcoin due to the simple fact that Bitcoin can move around the world at light speed when compared to the cumbersome metal.

If people stop being dinosaurs and learn to take possession of their coins, "the powers that be" will have a much more difficult time attempting to put a leash on it.

I wonder if the dinosaurs have to die out before a change like this can occur? How many more times will I have to watch the slow motion train wreck of people losing their coins due to trusting third parties?

yes, it would be more difficult.

at least with gold, they have some of it (unlike Bitcoin), and they can shield actual supply stats.  and with interest rates, they have the central banks at their backs along with corrupt gov't.

but that won't stop them from trying and preventing the next crash before we move on to yet another high.

[damnek]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Do you think it's possible he was forced to do this in order to receive Wall St.'s blessings?

[traderCJ]

gold UP, btc in the DUMPS 

bitcoin is up today and Gold as well, Stocks are down and Dollar has been down lately, maybe it is finally the start of what is overdue, Janet Yellen will stops tapering right after it started and the FED will increase QE
It may be the last time to get bitcoins and gold cheaply before the price goes up a lot and everyone want to buy

Bitcoin is up roughly 4-5x the % that gold is up today.

it's a matter of what's going to run up the fastest and the furthest with time.

I subscribe to your overall view of Gold collapsing, Bitcoin UP. But I think we will see one more big bull run with Gold. Also Gold AND Bitcoin going UP and fiat going DOWN makes me happy 

we need to suck those goldbug bulls in one last time.

the finale.

You should get into comedy, you'd probably make a killing.

[cypherdoc]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Is it really that bad? My assumption is that they can't really affect the market too much when they "fix" the price. It's not like Bitstamp is going to disappear. If Barry wants to fix the price, he's going to have to look at Bitstamp himself (as well as all other exchanges) and then fix the price pretty close to what the market thinks is fair anyway. Right?

perception moves in waves and cycles. 

the perception they can create with the billions of USD they bring to the table in a price fixing scheme could be significant in the short term and be to the detriment of small players like Bitstamp.  i would hate to see that but yes, in the long run, it shouldn't matter.

this is Bitcoin's Tension.

[cypherdoc]

gold UP, btc in the DUMPS 

bitcoin is up today and Gold as well, Stocks are down and Dollar has been down lately, maybe it is finally the start of what is overdue, Janet Yellen will stops tapering right after it started and the FED will increase QE
It may be the last time to get bitcoins and gold cheaply before the price goes up a lot and everyone want to buy

Bitcoin is up roughly 4-5x the % that gold is up today.

it's a matter of what's going to run up the fastest and the furthest with time.

I subscribe to your overall view of Gold collapsing, Bitcoin UP. But I think we will see one more big bull run with Gold. Also Gold AND Bitcoin going UP and fiat going DOWN makes me happy 

we need to suck those goldbug bulls in one last time.

the finale.

You should get into comedy, you'd probably make a killing.

ah, the latest generation of troll.

[Melbustus]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Is it really that bad? My assumption is that they can't really affect the market too much when they "fix" the price. It's not like Bitstamp is going to disappear. If Barry wants to fix the price, he's going to have to look at Bitstamp himself (as well as all other exchanges) and then fix the price pretty close to what the market thinks is fair anyway. Right?

Yeah, I'd think such a plan wouldn't be viable in bitcoin due to being able to arbitrage the asset itself directly. Unless, as you note, prices are set *very* close to fully liquid exchanges.

What I'm becoming more interested in is whether or not (and/or how) this new exchange could allow or prevent naked shorting. Can someone school me in how this works?

[traderCJ]

ah, the latest generation of troll.

Back at you, old timer.

[Adrian-x]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Do you think it's possible he was forced to do this in order to receive Wall St.'s blessings?

Love your Rai stone icon. There is one that sank and people still used it as money even though it was lost. Makes me thing of Gox if the coins turn out to be lost.

Wouldn't a solution to the problem be to buy on both the free market and SM exchange. Then the reduced liquidity would slowly push up the price?

[cypherdoc]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Do you think it's possible he was forced to do this in order to receive Wall St.'s blessings?

Love your Rai stone icon. There is one that sank and people still used it as money even though it was lost. Makes me thing of Gox if the coins turn out to be lost.

Wouldn't a solution to the problem be to buy on both the free market and SM exchange. Then the reduced liquidity would slowly push up the price?

the real solution would be to open up trading to everybody including individuals on a 24/7 basis, just like we have with the other exchanges.

sort of like a real exchange?

[chriswilmer]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

Do you think it's possible he was forced to do this in order to receive Wall St.'s blessings?

Love your Rai stone icon. There is one that sank and people still used it as money even though it was lost. Makes me thing of Gox if the coins turn out to be lost.

Wouldn't a solution to the problem be to buy on both the free market and SM exchange. Then the reduced liquidity would slowly push up the price?

the real solution would be to open up trading to everybody including individuals on a 24/7 basis, just like we have with the other exchanges.

sort of like a real exchange?

cypherdoc, is there a problem with adding a strange-price-fixing exchange into a mix of "real exchanges"? I feel like the price-fixing is an issue if it's the only option, but doesn't detract if it is just thrown into the mix.

[Grafzep]

i wanted to comment on this new exchange that is forming on Second Market.

i don't like the sounds of how it's being structured.  seems eerily similar to the London Gold Fix and also how the banks have rigged Libor.  anytime you get a dozen or so banks on the telephone to determine the price of something, you're asking for trouble.  we know they rigged interest rates and probably have tried to rig gold as well.

from what Barry Silbert talked about on Bloomberg, doing a twice daily Bitcoin price fix based on what a bunch of banks say the price is would be ridiculous.  i'd rather rely on Bitstamp to be quite honest.

We might have Bitstamp accounts and price ticker feeds in front of us, but many don't. And although there's obviously room for collusion on a fixing committee, it wouldn't last long if it was regularily miles off exchange prices.

An AM/PM (more likely midday/midnight?) fix would likely be useful, especially for the various ETF (or ETF-like) products being put together. For example, if you (as a punter) want to sell some of your ETF it obviously wouldn't be possible at last price, it would have to be at next price, so a reliable and generally trusted fix would be needed.

[tvbcof]

...
What I'm becoming more interested in is whether or not (and/or how) this new exchange could allow or prevent naked shorting. Can someone school me in how this works?

Here is what the exchanges can do to discourage naked shorting:  They can keep folding and losing everyone's BTC.  In this way people will eventually be trained to not retain a significant BTC balance under the care of the exchange.

In order to naked short, one needs to give someone something they don't have (and the other person needs to accept it.)  This is relatively easy with stocks since the DTCC looks the other way and the receiver only sees what their brokerage account shows on the UI (that is, phantom shares.)  BTC is different in that I don't have to rely on the broker's UI.  I can rely on my own wallet as a source of truth.  Of course if I'm using my exchange account as a bank account, all bets are off.

[cypherdoc]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

[Peter R]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

I don't think the motive is sinister, I think it is a matter of political expedience.  Bitcoin's image is not pristine; if this new exchange is open exclusively to big highly-visible and regulated players, there will be less objections from above and below.  In other words, this has better optics.

A foot in the door...

[Grafzep]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

If you take the point that some kind of daily fix is administratively desirable for an ETF, then how would you do it?

You can’t take any Exchange price because the tape will be painted. You can’t take a time average because it’s too historical. Asking a group of major buyers and sellers to tip their little flags at consensus isn’t that bad. As I said, if they’re consistently miles off the market they’ll soon be forced to change.

Retail investment, in the sense that buyers trust someone else to manage their coins, is coming and will operate in some ways we may think absurd. But that’s where the new money after next will come from.

[Melbustus]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

I get how that can happen for interest rates, where member banks and CBs set the rates anyways, and can support some tacitly-colluded target. Can see it somewhat with the gold market too, since people aren't actually moving metal, and therefore there's lots of opportunity for obscurity with regard to who has what, etc.

But with bitcoin, where the underlying asset can move instantly with zero friction, doesn't arbitrage take care of any gross price discrepancies rather quickly? What am I missing?

[cypherdoc]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

I get how that can happen for interest rates, where member banks and CBs set the rates anyways, and can support some tacitly-colluded target. Can see it somewhat with the gold market too, since people aren't actually moving metal, and therefore there's lots of opportunity for obscurity with regard to who has what, etc.

in the same way they "set" interests too low, they can set a Bitcoin price too low.  how do they do that with interest rates?  with an avalanche of digital money typed into a computer screen and artificial buying of UST's via pomo's.  in Bitcoin's case, a too low fix would act like a naked short that tv above alluded to. and if they start losing money when they stray too far from the real price, they just go cry to mommy, the Fed, to cover their losses.  in the meantime, the real Bitcoin will take a hit.

my concern is it's a matter of size; the banks bring billions/trillions of artificial USD's to the table while Bitcoin is still in a nascent phase and potentially manipulable.

But with bitcoin, where the underlying asset can move instantly with zero friction, doesn't arbitrage take care of any gross price discrepancies rather quickly? What am I missing?

how can you or i arbitrage when we're not allowed to go into their artificial exchange and buy low to sell high on a real exchange?

[cypherdoc]

the real question is why do the banks want to make it a closed, exclusive exchange?

i can think of only one reason; manipulation.  remember that all they do for Libor is conduct phone calls that ask what interest rate participating banks can borrow money at.  that's been definitively shown to be a scam.

a real exchange that includes all participants in a market would squelch that.

I don't think the motive is sinister, I think it is a matter of political expedience.  Bitcoin's image is not pristine; if this new exchange is open exclusively to big highly-visible and regulated players, there will be less objections from above and below.  In other words, this has better optics.

A foot in the door...

who cares about better optics or political expediency?  Bitcoin is doing just fine, thank you very much.  i don't care that we're at half the high; what matters to me is that we're at 19.13x the price of one year ago exactly.

i think ppl are just panicking after gox's failure.  watch the Bloomberg interview of Silbert.  even he comes across as desperate to me.  he even says they prematurely came forward with this idea to counteract the gox news.  and his desperation to accept regulation at his level sounds to me like he lost Yen to the gox bk.