Ether soars above $1k as Bitcoin sets another record(arstechnica.com)
arstechnica.com
Ether soars above $1k as Bitcoin sets another record
https://arstechnica.com/tech-policy/2021/01/ether-soars-above-1000-in-broad-cryptocurrency-rally/
28 comments
Etherium seems quite promising. They recently moved to Proof of Stake, which gets around many issues with Bitcoin like energy consumption, miner consolidation, and 51% attacks (it would by definition be more expensive to pull off than you could possibly gain by faking a transaction). Add to that the possibility of staking Etherium and you have an asset that generates returns.
Is there any resources on how proof of stake works in etherium? There's this page https://eth.wiki/en/concepts/proof-of-stake-faqs, but it just seems to be listing out some possible approaches without explicitly saying "etherium does this".
If you plan to buy Bitcoin please wait a few months until lawsuit against Tether [1] gets a ruling - if they are found guilty of a price manipulation scheme it should temporarily bring Bitcoin price down to more reasonable level, say below 1000 USD.
[1] https://www.courtlistener.com/recap/gov.uscourts.nysd.524076...
[1] https://www.courtlistener.com/recap/gov.uscourts.nysd.524076...
The market cap of Tether is $21,807,025,291 according to coinmarketcap. Wouldn't the rush to trade all those tokens for something else push up the price of BTC?
There is an interesting doomsday arb that I have been toying with (fully believing that USDT is 90% of the alpha in BTC).
The trade here is to be long exchanges that are USDT backed and short exchanges that are USD backed. This ultimately leaves you with a net short of USDT vs USD but it's very different than just being short USDTUSD on an exchange because those very exchanges won't be solvent if this unravels.
So basically if the world doesn't end, you're mostly hedged (you have have manageable spread risk between the two exchanges) and if it implodes, you should see prices on the USDT exchanges skyrocket as people buy crypto to send elsewhere where they will immediately sell for fiat. The result is that BTCUSDT soars and BTCUSD plummets. Now, you'll never get paid on your BTCUSDT length but you will get paid on the short leg in your legitimate USD exchange
At the end of the day there are better ways to make money in life though. But the trader in me will probably put a few quid to work here.
The trade here is to be long exchanges that are USDT backed and short exchanges that are USD backed. This ultimately leaves you with a net short of USDT vs USD but it's very different than just being short USDTUSD on an exchange because those very exchanges won't be solvent if this unravels.
So basically if the world doesn't end, you're mostly hedged (you have have manageable spread risk between the two exchanges) and if it implodes, you should see prices on the USDT exchanges skyrocket as people buy crypto to send elsewhere where they will immediately sell for fiat. The result is that BTCUSDT soars and BTCUSD plummets. Now, you'll never get paid on your BTCUSDT length but you will get paid on the short leg in your legitimate USD exchange
At the end of the day there are better ways to make money in life though. But the trader in me will probably put a few quid to work here.
Yes, and that's exactly what's happening right now, that's why Bitcoin price rose from 10k to 32k USD since September. Music is going to stop soon, and people are desperately looking for chairs to sit on.
Tether's market cap has increased a ton in the past few months.
BTC's market cap is like over 600 billion...
Huge institutional accounts are taking their coins off exchanges and putting into cold storage.
How does that go along with what you're saying?
BTC's market cap is like over 600 billion...
Huge institutional accounts are taking their coins off exchanges and putting into cold storage.
How does that go along with what you're saying?
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In my opinion, that is not why Bitcoin’s price rose last month but I do not wish to share all that I know and give my hand away (for free). Many investment managers, who previously only flirted with cryptocurrencies, have started making rather high price predictions to their followers or investors. Most hold a 1% to 5% of their portfolio in bitcoin or other cryptocurrencies as a hedge but not as a primary bet. If I remember correctly, a 1% position in Bitcoin in 2017 combined with a 99% position in the S&P500 would’ve doubled the performance of a 100% S&P500 portfolio. Something like a 14% return vs a 28% return. (Then in 2018 if you didn’t rebalance your portfolio, it would’ve dropped down quite a bit.)
Did someone downvoting me because I disagree with you that bitcoin will go down to 1000 USD? Alright, if you’re bearish and you think it will go down, put your money on it! Buy put options, sell bitcoin futures, or short bitcoin. Any of it works. Many cryptocurrency exchanges let you short against a USD stablecoin, many brokerages let you sell futures, and half a dozen brokerages let you buy put options (or sell call options). But don’t put any more money on your bet than you’re willing to lose!
Heck I’ll even give you an offer, if you want to let me know what your position is, I’ll take the other side!
Put your money where your mouth is.
Heck I’ll even give you an offer, if you want to let me know what your position is, I’ll take the other side!
Put your money where your mouth is.
They could just swap the Tether for some other stablecoin that tracks the US dollar. There’s quite a few of them now. In that case, nothing happens to the price of Bitcoin.
USDC, USDJ, DAI, PAX, BUSD, GUSD are 6 alternatives to USDT. There are apparently also half a dozen other USD stable coins.
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People have been saying Tether is gonna crash since late 2017 and that FUD directly helped cause the cryptocurrency crash of late 2018. People that would’ve swapped out of crypto into tether swapped out of crypto all together when they lost faith in tether. But look, tether is still around and doing fine. It has held it’s value of $1 for most of the time. People say it might not have it’s full reserve requirement of 100% dollars. But banks in the United States normally operate with a reserve requirement of only 10%. There are also a few different tether replacements available for people to swap into now.
>> But banks in the United States normally operate with a reserve requirement of only 10%
The banks are legally allowed to do that, Tether wasn't. According to the lawsuit at some point they started declining buying back USDT, due to the lack of real dollars in their bank account. That's clearly a fraud, since they were assuring their customers they have sufficient reserves.
Also, the reason they were at some point missing $850M was because that money was seized in various countries as coming from drug cartels. Seems like there's a lot of rope to hang them with.
The banks are legally allowed to do that, Tether wasn't. According to the lawsuit at some point they started declining buying back USDT, due to the lack of real dollars in their bank account. That's clearly a fraud, since they were assuring their customers they have sufficient reserves.
Also, the reason they were at some point missing $850M was because that money was seized in various countries as coming from drug cartels. Seems like there's a lot of rope to hang them with.
There actually isn’t a reserve requirement anymore. That 10% requirement was removed sometime in mid 2020. Frauds that act like a bank or are a bank can last quite a lot longer than most people realize even if their deposits are lent out, collateralized, or lost altogether. You only know who’s swimming naked when the tide rolls out.
From what I see, USDT (Tether), is still one of 6 prominent stable coins on Poloniex. Prominent enough to be listed first. If USDT stopped being worth $1 for too long, I’d assume the exchanges would remove it. According to this chart, Tether has done it’s job fine through the ups and downs.
https://coinmarketcap.com/currencies/tether/
From what I see, USDT (Tether), is still one of 6 prominent stable coins on Poloniex. Prominent enough to be listed first. If USDT stopped being worth $1 for too long, I’d assume the exchanges would remove it. According to this chart, Tether has done it’s job fine through the ups and downs.
https://coinmarketcap.com/currencies/tether/
The lawsuit I cited suggests that two exchanges were actually complicit in the scam - and Poloniex is one of them.
Also, since Tether has its bank accounts in Deltec bank in Bahamas, the inflow of $15B to such a small country would be visible in country's foreign currency balance sheets. The official report from Bahamas government shows that this balance is currently around $60B and has actually decreased during 2020. So this $15B worth of newly issued Tethers are not actually backed by USD (those money never reached Tether bank account), they were printed out of thin air.
Also, since Tether has its bank accounts in Deltec bank in Bahamas, the inflow of $15B to such a small country would be visible in country's foreign currency balance sheets. The official report from Bahamas government shows that this balance is currently around $60B and has actually decreased during 2020. So this $15B worth of newly issued Tethers are not actually backed by USD (those money never reached Tether bank account), they were printed out of thin air.
I only have one opinion on the current trends of Ether and Bitcoin: Bitcoin is uncorrelated to the rest of the market so if there must be a bubble then a BTC bubble will have less impact on the rest of the economy than a housing or stock bubble. I don't want to see people lose their mortgage or their job.
It’s crazy that Ethereum has risen so fast! Some people I know were predicting it to go up to $1000 by the end of 2020 when it was $630 in December so I bought in then. They were only off by 4 days since today is Jan 4th. I’m glad I did because it is up by a higher percent than Bitcoin.
What's the point of Ether though? Is there any actual use case?
The only crypto usecase I've seen so far that makes sense is for Bitcoin, a store of value, like digital gold. Works against inflation of fiat currencies etc.
The only crypto usecase I've seen so far that makes sense is for Bitcoin, a store of value, like digital gold. Works against inflation of fiat currencies etc.
I’ve done some research in the past trying to answer that question as well, and I concluded that there really wasn’t any, at least not any large ones.
Ethereum allows decentralized smart contracts, but the value seems fairly limited. The most promising use case I found was for a decentralized exchange... but that doesn’t seem valuable enough to justify its price. Also, a decentralized exchange + smart contracts are possible via L3 solution on Bitcoin and Lightning Network too.
Three other competitors in the smart contract space are also among the top 10 coins: Polkadot, Cardano and Chainlink.
Ethereum allows decentralized smart contracts, but the value seems fairly limited. The most promising use case I found was for a decentralized exchange... but that doesn’t seem valuable enough to justify its price. Also, a decentralized exchange + smart contracts are possible via L3 solution on Bitcoin and Lightning Network too.
Three other competitors in the smart contract space are also among the top 10 coins: Polkadot, Cardano and Chainlink.
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The point of Ethereum is to leverage smart contracts on the blockchain to create a "world computer", ie. a completely decentralized compute layer. Some cool stuff can be done today, but we're not quite at the place where we can build truly generically useful stuff yet.
Ethereum 2.0, which is just starting to launch now and will take another 2 years probably to be actually useful, goes a long way toward making it really powerful as a platform though, imo.
Ethereum 2.0, which is just starting to launch now and will take another 2 years probably to be actually useful, goes a long way toward making it really powerful as a platform though, imo.
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At this point, which cryptocurrencies do you think have the best risk/return?
Or put another way, which are you currently most invested in?
Or put another way, which are you currently most invested in?
I don't find that these articles acknowledging BTC/ETH clearing the 30k/1k price point provide any value to the discussion surrounding their existence.
Article acknowledges incumbents, pumps them, drops some other altcoin names and provides brief summary of XRP issues with SEC (which we've already discussed here).
Article acknowledges incumbents, pumps them, drops some other altcoin names and provides brief summary of XRP issues with SEC (which we've already discussed here).