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Merged Bitcoin - Part 3

I can’t remember where I read it but someone that was arguing in support of DeFi I used this as a bit of a useful example — borrowing hundreds of millions of dollars for under a minute for some flash trading or something. Crazy. I can see like a one day hedge ETF or fairly short-term instrument but borrowing a billion for seconds? Anonymously?
 
ponderingturtle said:
I also want to know what the supposed benefit, other than this kind of corporate raiding, of borrowing a billion dollars for under a minute.
Click to expand...

It's useful for wash trading NFTs too. Borrow a huge sum of crypto, "buy" your own NFT moving it one wallet to another, then return the money back to the lender. You just created a false data point about the market value of your worthless doodle and you're only out a bit of transaction fees.
 
Geez, I hadn't even thought of that. In the back of my mind, I was wondering who would have the capital to do some of those wash trades. Duh - just borrow the money for a few seconds.
 
SuburbanTurkey said:
It's useful for wash trading NFTs too. Borrow a huge sum of crypto, "buy" your own NFT moving it one wallet to another, then return the money back to the lender. You just created a false data point about the market value of your worthless doodle and you're only out a bit of transaction fees.
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Crypto has set back scamming innovation by decades because all the old school scams work again and most of them aren't even clearly illegal.
 
Suddenly said:
Crypto has set back scamming innovation by decades because all the old school scams work again and most of them aren't even clearly illegal.
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On the other hand, it's a boon for scam neophytes because you can steal thousands upon thousands of "dollars worth" of crypto or NFTs for very little to no entry cost and extremely low risk, which creates an ideal environment for learning and practicing.

You can, if you want, just drop a trojan into a few random peoples' Etherium wallets that grabs all their money and NFTs, and since all of these assets' value is purely speculative, you don't actually lose anything by using some of them to just try out other types of scams, or even engaging in "legitimate" crypto investments like actually buying some monkey cartoons for yourself, or buying stake in a DAO. If you're feeling lucky, tumble the coins and cash them out. Waste some of the stash by gifting substantial amounts of stolen coins and some NFTs to a random wallet or two, sending investigators in the wrong direction and having an innocent person completely take the fall for your thefts. Like Zombo.com, the only limit is yourself.
 
Bail Out The Whales

Top Retirement Plan Fidelity Now Offers Cryptocurrency For 401k Plans

Fidelity Investments will allow customers to invest in bitcoin with their
401(k) plans later this year, becoming the first major retirement-plan
provider to embrace cryptocurrency as a savings vehicle. Customers
will be able to put up to 20% of their savings into bitcoin, with other
cryptocurrencies likely to be added later, the Wall Street Journal first
reported.

Fidelity is the largest US retirement-plan provider, with 23,000 companies
using it to administer their plans. Those employers will decide if their
workers can have a bitcoin option. If they do, the companies can also
lower the threshold of savings put into bitcoin. Fidelity already has
some footing in the crypto market, offering a trading platform specifically
made for hedge fund investors. Fidelity manages $2.7 trillion in assets
for 20 million clients.

But concerns over cryptocurrency still loom. The Justice Department
said in March that cryptocurrency should be avoided in retirement accounts
because the market swings are too volatile. Bitcoin has shed 40% of its
value since its November high of $69,000. The Labor Department regulates
401(k) plans sponsored by companies and has cautioned that providers
should use "extreme care" before adding cryptocurrencies to their plans.
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I wondered how, when things turns south in the cryptorecession,
billionaire Bill Miller would get out of his 50% position in Bitcoin.

Well it turns out, easy problem, easy solution.
 
The Department of Labor’s Employee Benefits Security Administration (DOL) issued Compliance Assistance Release No. 2022-01 (the “Release”) on March 10. The Release warns 401(k) plan fiduciaries to “exercise extreme care” before including cryptocurrency options on a 401(k) plan’s investment menu.

…

Speculative and volatile investments

The Securities and Exchange Commission (SEC) has warned against the highly speculative nature of investing in cryptocurrency, as it is prone to extreme price volatility due to factors including uncertainties in valuation and reporting, speculative conduct, and incidence of theft and fraud.

(Snip)


Evolving regulatory environment

Here, the DOL basically likens the cryptocurrency markets to the Wild West. Plan fiduciaries considering cryptocurrency investment options must analyze how evolving regulatory requirements may apply to issuance, trading or other investment-related activities and, ultimately, impact investments by plan participants.

The DOL’s strongly worded warning against including cryptocurrencies on the menu of investment options for plan participants should put employers and plan fiduciaries on notice of the seriousness with which the agency regards these kinds of assets. Particularly concerning is that the DOL’s warning extends to cryptocurrency-related investments available through 401(k) brokerage windows.
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So there’s that. Hard to believe that a huge retirement company would touch these right now. I wonder if the announcement is just testing the waters or chumming for press.
 
My employer uses Fidelity for the 401k's. I'm thinking of asking our benefits department to decline all bitcoin-involved plans. I do take issue with the environmental impact.
 
re·ces·sion
/rəˈseSH(ə)n/

noun: recession; plural noun: recessions
1. a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
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In the past two quarters, bitcoin value is down a third, ETH is down a quarter and $2.5 Billion worth of fraud has been extracted from crypto / NFT scams. How much more time before it's a "crypto recession" please?

KHDcBNh.jpg


IyXHwHx.jpg
 
carlitos said:
In the past two quarters, bitcoin value is down a third, ETH is down a quarter and $2.5 Billion worth of fraud has been extracted from crypto / NFT scams. How much more time before it's a "crypto recession" please?

[qimg]https://i.imgur.com/KHDcBNh.jpg[/qimg]

[qimg]https://i.imgur.com/IyXHwHx.jpg[/qimg]
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It's still several 5 times higher then 2 years back. 10 times higher if you compare it to March 2020. Bitcoin down 1/3 is minor correction in Bitcoin standards. If anything, BTC is remarkably stable recently .. investors are waiting for another 10 times increase.
 
carlitos said:
In the past two quarters, bitcoin value is down a third, ETH is down a quarter and $2.5 Billion worth of fraud has been extracted from crypto / NFT scams. How much more time before it's a "crypto recession" please?

[qimg]https://i.imgur.com/KHDcBNh.jpg[/qimg]

[qimg]https://i.imgur.com/IyXHwHx.jpg[/qimg]
Click to expand...
I don't know if there is an official definition of "crypto recession" but if you define it to mean two successive quarters of falling prices then your charts don't show it.

Prices fell in the December quarter but remained relatively stable during the March quarter.
 
carlitos said:
In the past two quarters, bitcoin value is down a third, ETH is down a quarter
and $2.5 Billion worth of fraud has been extracted from crypto / NFT scams.
How much more time before it's a "crypto recession" please?
Click to expand...


Admittedly I don't think everyone will call it that. Probably get a different name.

Over the past ten years inflation has risen twenty five percent, mostly over
the last two years, meanwhile labor productivity has risen thirteen percent.
With inflation outstripping labor productivity, wages cannot keep up with
inflation which means people will begin running out of money.

What then happens to bitcoin and crypto speculation in general when
people need money to pay their bills?

My best guess within three years a recession will knock them down hard.
 
Solitaire said:
What then happens to bitcoin and crypto speculation in general when
people need money to pay their bills?
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If a hodler needs money to pay their bills then they may have to sell some of their crypto holdings.

But you are assuming that it is the average "Joe Blow" who is buying cryptos. It is more likely to be people who have money to spare for investing who are doing the buying. So we can't tell how declining living standards will affect the price of bitcoin. It is just as likely that money spent on bitcoin may increase if traditional investments (stocks and bonds) start to lose their viability.
 
Warren Buffet makes a flawless contention that bitcoin is worthless.
It may take some time but this reprehensible Mal use of finite resource will be taken down like a lifer.
 
psionl0 said:
But you are assuming that it is the average "Joe Blow" who is buying cryptos.
It is more likely to be people who have money to spare for investing who are
doing the buying. So we can't tell how declining living standards will affect the
price of bitcoin. It is just as likely that money spent on bitcoin may increase
if traditional investments (stocks and bonds) start to lose their viability.
Click to expand...


Ah, I see my error.

The little guys, the holders, don't bring down markets. They don't get
out until the market reaches bottom. So the big guys cause the declines.

And sure enough, I found a very short article on that.


Bitcoin, Crypto Tumble In Tech Stock Rout by Rob Lenihanmay

Cryptocurrency prices plummeted Thursday as investors looked to the near
impact of the Federal Reserve's interest rate hikes. Bitcoin was down 8.8%
to $36,308, at last check, well off its record high of $69,044.77 in November.
Ethereum lost 6.8% to $2,744 and dogecoin was off 4.53% to $0.129068.
Over on Wall Street, the Dow Jones Industrial Average finished down 1,063
points, or 3.1% to 32,997, while the S&P 500 lost 3.56% and the tech-heavy
Nasdaq fell 5%. Cryptocurrencies have been moving in tandem with stocks,
particularly the tech sector.

"There’s carnage across financial markets and crypto is no exception," Luzi
Ann Santos, markets expert and editor with Finder. "On a day when you have
the Nasdaq down almost 5% and the S&P 500 slumping 3.6%, you’d have
a lot of fund managers scrambling to sell assets that could help them cover
losses. That means booking whatever gains they’ve had in the crypto market
to cover those losses in the stock market," Santos added, "and that’s why
we’re seeing red across the board."
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The big guys buy longs rather than shorts on tech stocks. And when
those derivatives incur losses in a down market, they cover by selling
their cryptocurrency holdings.

These numbers allow one to calculate the effects of a market downturn
on the price of cryptocurrencies. The ratio of Bitcoin to Dow Jones is 8.8/3.1,
so if the Dow Jones falls 30% in a recession then Bitcoin must fall 85%.

Simple, no.
 
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