Crypto crash?

[GoSeigen]

I have no idea what to make of this, but it may be of interest here:

https://www.twitlonger.com/show/n_1ss24a6

Executive summary of the link target in the absence of any clue from the poster of the link:

Self-serving anonymous individual claims he/she will imminently leak incriminating messages posted on crypto-related Telegram forums that he/she covertly (and presumably illegally) collected over the past few years.

GS

[GrahamPlatt]

I have no idea what to make of this, but it may be of interest here:

https://www.twitlonger.com/show/n_1ss24a6

Executive summary of the link target in the absence of any clue from the poster of the link:

Self-serving anonymous individual claims he/she will imminently leak incriminating messages posted on crypto-related Telegram forums that he/she covertly (and presumably illegally) collected over the past few years.

GS

Mea culpa. Yes, I should have added a synopsis. I was just a bit taken aback by it and posted in haste. We’ll just have to see whether it turns out to be the real deal or not.

[GoSeigen]

I have no idea what to make of this, but it may be of interest here:

https://www.twitlonger.com/show/n_1ss24a6

Executive summary of the link target in the absence of any clue from the poster of the link:

Self-serving anonymous individual claims he/she will imminently leak incriminating messages posted on crypto-related Telegram forums that he/she covertly (and presumably illegally) collected over the past few years.

GS

Mea culpa. Yes, I should have added a synopsis. I was just a bit taken aback by it and posted in haste. We’ll just have to see whether it turns out to be the real deal or not.

Might be a good story if it turns out to be genuine...

GS

[Itsallaguess]

From the Telegraph this morning...

Bitcoin tumbles to 18-month low -

It's also a grim start to the week for cryptocurrencies as investor jitters spread through risk assets.

Bitcoin plunged to its lowest level in around 18 months in overnight trading after Friday's shock US inflation data continued to take its toll.

The world's largest digital token dropped as much as 8.9pc to $24,903.49 – its lowest since December 2020. Other cryptocurrencies also fell, with Ether down as much as 12pc to its lowest level since February 2021.

Crypto assets have been hit particularly hard by the Federal Reserve's aggressive shift to tackle surging inflation.

The collapse of the Terra/Luna ecosystem last month – and lender Celsius' move to pause withdrawals of coins this morning – have further eroded confidence in the space.

https://www.telegraph.co.uk/business/2022/06/13/ftse-100-markets-live-news-inflation-fuel-energy-cryptocurrency/

On the positive side, the 'tRiP tO ThE mOoN' just got that little bit longer and more enjoyable for holders of these types of 'assets', I suppose...

Cheers,

Itsallaguess

[bungeejumper]

Currently down to $23,660, and falling. The FT is linking it primarily to Celsius halting customer withdrawals, because of "extreme market conditions".

Sentiment towards these high-risk projects cooled sharply after the terra and luna tokens — which were the foundation of another popular yield platform — collapsed in a matter of days. The value of assets deposited on Celsius’s platform shrivelled to less than $12bn as of May 17 from more than $24bn in late December.

If I were a crypto holder (and I probably wouldn't know how to be ), the idea of not being able to cash out at will would put the skids under my confidence as well. It certain adds a new meaning to HODL. As in "we're holding onto your lousy outdated fiat currency for dear life."

BJ

[Urbandreamer]

Thanks for the link. For those who didn't follow it, everything is down. Including crypto.

It does put paid to many arguments about crypto being a inflation hedge or lifeboat though.

Re cashing in, isn't that like cashing in your blue chip shares, which are also down. I am however going to move the Bitcoin, that was recently bought, off the exchange.

I am likely to buy more over the coming year though.

Ps why are shares in big companies named after a gambling token?

[ReformedCharacter]

Ps why are shares in big companies named after a gambling token?

The term "blue chip" was first used to describe high-priced stocks in 1923 when Oliver Gingold, an employee at Dow Jones, observed certain stocks trading at $200 or more per share.1 Poker players bet in blue, white, and red chips with the blue chips having more value than both red and white chips. Today, blue-chip stocks don’t necessarily refer to stocks with a high price tag, but more accurately to stocks of high-quality companies that have withstood the test of time.

https://www.investopedia.com/terms/b/bluechip.asp

RC

[bruncher]

Thanks for the link. For those who didn't follow it, everything is down. Including crypto.

It does put paid to many arguments about crypto being a inflation hedge or lifeboat though.

Re cashing in, isn't that like cashing in your blue chip shares, which are also down. I am however going to move the Bitcoin, that was recently bought, off the exchange.

I am likely to buy more over the coming year though.

What would be a good bitcoin entry price point for a beginner (with no current holding)? I'm thinking parity with the US dollar.

[JohnB]

Equity down by 9%, bitcoin down 70%, I wonder if anyone here is borrowing to buy bitcon?

[Urbandreamer]

Equity down by 9%, bitcoin down 70%, I wonder if anyone here is borrowing to buy bitcon?

Not me. Then again I'm not borrowing to buy equities either.

Another thing that I'm not doing is lending my Bitcoin. There are arguments that the current crash is happening because counter party risk is coming home to roost.

One thing John, that will be interesting to look at is how current events influence the global hashrate. As the price falls, the rewards for mining fall. If electricity rises in price, or has a significant price, then you would expect miners to turn off machines to avoid losing money. What will it mean if that doesn't happen?

Bitcoin has been falling in price since December, but the hashrate doesn't seem to be dropping.
https://www.blockchain.com/charts/hash-rate

I'm sorry but I can't answer bruncher's question. What is known is that some companies with banking covenants have bitcoin in their treasury. If they breach those covenants then they will have to sell that bitcoin, driving the price down further.

I'm willing to buy at the current price, but only small amounts. If bruncher is right and it drops to $ parity I'll by buying lots.

[LooseCannon101]

Bill Gates agrees with me that Crypto-currencies are worthless. They only work when you can find a Greater Fool to buy.

Here is the article -

https://edition.cnn.com/2022/06/15/tech ... index.html

[Itsallaguess]

From today's Telegraph -

Bitcoin crashes below $20,000 to hit 18-month low -

Bitcoin has plunged below $20,000 for the first time since 2020, as tightening monetary policy across the world prompts a flight from riskier assets.

The cryptocurrency has now fallen more than 70pc since November amid a wider digital coin sell-off.

The world's largest cryptocurrency fell more than 9pc on Saturday morning, marking 12 straight days of declines. This means Bitcoin prices are now more than 70pc lower than where they were in November last year.

Other crypto tokens have similarly collapsed in price, with trillions having been wiped from the value of digital coins since they hit a high last year.

Ethereum, the second largest cryptocurrency, recorded a 24-hour fall of 9.1pc, while Binance Coin was down 8.2pc over the same period and Dogecoin down by 7.5pc, according to CoinDesk.

https://www.telegraph.co.uk/business/2022/06/18/bitcoin-crashes-20000-hit-18-month-low/

wHaT aN aMAziNg bUyInG oPpoRtuNiTy!!!

Cheers,

Itsallaguess

[Hornblower]

Thanks for the link. For those who didn't follow it, everything is down. Including crypto.

It does put paid to many arguments about crypto being a inflation hedge or lifeboat though.

Re cashing in, isn't that like cashing in your blue chip shares, which are also down. I am however going to move the Bitcoin, that was recently bought, off the exchange.

I am likely to buy more over the coming year though.

What would be a good bitcoin entry price point for a beginner (with no current holding)? I'm thinking parity with the US dollar.

Wait, you mean $1 for 1 BTC? You know only 21 million bitcoin will ever be created, right?

[Hornblower]

What a fascinating couple of weeks.

I certainly didn't see this bitcoin crash coming with such severity. It seems a confluence of factors have created a perfect storm.

Caitlin Long gives a great explanation on a recent 'What Is Money' podcast. This MIGHT be the 'canary in the coal mine' signalling dramatic things about to happen in bond, equity, property markets. Bitcoin market is 24/7 with no 'plunge protection teams' or 'circuit breakers'. There also seems to be sheningans going on with some counterparties, which people have been warning about for several years.

The Luna explosion was amazing. Bitcoiners had been warning about the nonsense of algorithmic stablecoins for some time, but I think even they were surprised by the speed of the collapse, and the enormous amounts of money lost.

Then came Celsius, which is still playing out at time of typing. They are a yield platform. You deposit bitcoin, or another crypto & they'll pay you a weekly interest rate. They claimed that this yield came from them short term lending to exchanges, speculators etc ...& that this was fully collateralized. However it was always a bit hazy exactly where the income was coming from, there was no independentway to verify this.

Now I'll confess, not only was I a user of Celsius, I also own equity in the company. This had performed spectacularly well, with a 17x increase in a year! However a few months ago I removed my funds from the platform, I had come to the conclusion that risking my Bitcoin just wasn't worth it for a bit of yield. Boy was I right. Lesson learned.

What I suspect has happened is that they started legitimate, but were forced further along the risk curve seeking yield to pay out to their users (so that their Assets Under Management kept going up). In other words, they were taking far more risk with their customers funds than they were claiming. There may also be an issue with rehypothecation... hence why they've frozen users funds (they don't have all the bitcoin the users gave them). This may well end in court cases & jail time before it's over. I don't think I'll have 17x my investment in the equity when the dust settles! However, I predict they'll survive, I understand BnkToTheFuture is in discussions about some sort of rescue....maybe a convertible bond or equity issue to refinance.

There's probably also other exchanges that have been rehypothecating their Bitcoin...more might fall before the end of this.

There's a cleansing fire burning out all the bad actors. This is what can happen in a free market like bitcoin.

We are in the weird situation of bitcoiners cheering on the carnage, even while they watch their personal net worth get decimated. We're a strange bunch. This seems to happen every 4-year cycle, bitcoin drops hard & the 'cryptos/alt-coins/sh*tcoins' plunge to near zero...most never rise again.

To the surprise of no-one here, I continue buying Bitcoin weekly. I'm getting a lot more satoshis for my £ than I was this time last year!

H

[Bubblesofearth]

Wait, you mean $1 for 1 BTC? You know only 21 million bitcoin will ever be created, right?

That would value BTC at £21 million more than it's actual worth.

BoE

[NotSure]

BTCUSD now below its previous high (from the last cycle). That's not meant to happen....

How about NFTs? (Not Flippin' Tangibles...)

[Urbandreamer]

Wait, you mean $1 for 1 BTC? You know only 21 million bitcoin will ever be created, right?

That would value BTC at £21 million more than it's actual worth.

BoE

It may be a stupid question, but what's a £ worth?

While we are on the subject what's a $ worth?

Oh and while you are considering that you might want to address what a $ is worth in £'s, as $21mill is not £21mill currently.

You might want to think about those things before you consider cryptocurrency. Those are basic ideas.
After that you can consider "money printing" etc. But you really do need to start with the basics of money before trying to understand crypto.

[Urbandreamer]

Ah NFT's....what the hell is an NFT?

Pete Davidson, Saturday Night Live

https://youtu.be/mrNOYudaMAc

Love it!
Brilliant mix of information and FUD. ASFIKT the information is right. The FUD? Well it could be right too.
Like the quick bit about tickets. That's actually a great use case for NFT's.
NFT's don't HAVE to be gif's and what they actually are is a form of contract.

[ursaminortaur]

Wait, you mean $1 for 1 BTC? You know only 21 million bitcoin will ever be created, right?

That would value BTC at £21 million more than it's actual worth.

BoE

It may be a stupid question, but what's a £ worth?

While we are on the subject what's a $ worth?

Oh and while you are considering that you might want to address what a $ is worth in £'s, as $21mill is not £21mill currently.

You might want to think about those things before you consider cryptocurrency. Those are basic ideas.
After that you can consider "money printing" etc. But you really do need to start with the basics of money before trying to understand crypto.

A US dollar ($) is worth 1 unit of what you pay your taxes with in the USA.
A Pound Sterling (£) is worth 1 unit of what you pay your taxes with in the UK.

(
Although bitcoin is legal tender in El Salvador the actual taxes to be paid are expressed in US dollars so its value isn't 1 unit of what you pay your taxes with in El Salvador
https://www.ft.com/content/8d7054e3-e597-48f4-b769-0ea2e53531c0

El Salvador’s bitcoin bill is still keen on king dollar
.
.
.
The U.S. dollar will remain the reference currency for the bitcoin price
)

It is those governments demand that citizens pay taxes in those currencies which gives them some value however their actual value at any particular time in terms of being able to be exchanged for goods or other currencies depends upon supply and demand which can depend upon the amount of currency in circulation (both that produced directly by the government or produced by bank lending in that currency) and desirability of that currency which can be influenced by factors such as how well the country's economy is perceived to be doing. Despite these fairly shaky foundations fiat currencies tend to be relatively stable and hence function well as a medium of exchange most of the time (though loss of confidence can sometimes lead to hyper inflation with currencies becoming essentially worthless and having to be replaced).

Bitcoin on the other hand was designed to be deflationary with a maximum limit to the number of bitcoins ever being produced and the value of bitcoins increasing as more people started using them. However in practice this led to them being used as an "investment" rather than a medium of exchange (currency) since with anything deflationary there is a tendency to wait a while before purchasing something as your bitcoin would then be worth more. Added to this was the fact that without government support (in the form of being required to pay taxes in bitcoin) there was a vast amount of short term volatility in its value which made it more difficult to use as a medium of exhange. And finally it is subject to losses of confidence which can see bitcoin values nosedive though the reasons for these are somewhat more opaque than with fiat currencies since bitcoin isn't tied to the economic performance of a particular economy or excessive printing by governments but still sentiment turns against it and the value falls.

[Bubblesofearth]

It may be a stupid question, but what's a £ worth?

While we are on the subject what's a $ worth?

Not a stupid question at all and it does indeed require a bit of thinking about.

The value of the legal currency of a country is determined by the present and perceived future worth of that country. This will be a combination of factors such as GDP and trade balance. Money printing does not increase the total value of a country, it simply reduces the value of each unit of currency.

BTC is not backed by anything other than peoples perception of what someone else might be prepared to pay in the future or vague notions about its role in some 'ideal currency' fantasy World.

You are right about it not being worth £21m, it's a bit less thanks to the £/$ exchange rate. My mistake.

BoE