I don’t have any kids to feed, just young dumb and tired of market crashes.
Which is as much as an unfounded absolutism as stating the opposite. While there's not fundamental limit to what you're saying, there might be qualitative differences though going forward: I can still go into a store these days and buy tulip bulbs, it just doesn't cost me two salaries...
The service seems to have been making it possible for people to sell their coins directly to one another. (Crypto exchanges hold your crypto and don't do an actual transaction through the block chain until you withdraw what you have. Though they could still guarantee not losing your coins if they go bankrupt...)
This is what they said about it:
> Are my funds safe?
> We don’t hold customer funds – at the time of the trade, we send the cryptocurrency directly to your wallet. If you need to execute a trade at this time, other platforms can facilitate this.
Crypto can go to zero and the world will continue on.
I don't think it will affect markets much. There are only a few companies involved. Most of the money is from the retail investors, and that money is already gone. The crypto exchange balances going to zero won't change things much as those are mostly imaginary numbers anyway.
That’s roughly the entire GDP of France. If France’s economy poofed out of existence or halved in value, that’d be a huge shake up.
The market cap of a stock (shares outstanding x share price) makes sense because each share represents a piece of the profits of the company and an ownership stake. If you took away half of the shares, the price per share would ~double and the market cap would remain the same since it's based on current cash + projections about the future profitability of the company, and the share price reflects those expectations. None of that is true for crypto.
Financially illiterate crypto people started multiplying the coin price x number of coins outstanding and calling that a "market cap" but there's nothing underlying the crypto world. Owning a bitcoin doesn't represent a percentage profit of some underlying economic activity that's being independently valued, coins are zero coupon bearer instruments, the value is in the coin itself. It's like talking about the "market cap" of pesos, just incoherent and easily gameable.
"Market cap" estimates assume that everyone could sell without the price moving. It's going to be far more sensitive to price changes than an actual country's GDP, it's based on what current trading prices are.
And Bitcoin, unlike a company with a huge market cap, isn't providing goods or services. E.g. if Apple disappeared into thin air, everyone hoping to buy new Apple phones or computers would be dramatically affected and that would have a ton of ripple effects. But if Apple's sales dropped to 0 and then they went out of business, their valuation would be down to 0 but a lot of people would've recouped some of their investment on the way down - the people selling earlier being better off than the ones later. This is a crazy scenario, though, since they're sales wouldn't go to 0 overnight.
So who's actually relying on Bitcoin? Some companies in the space, sure. Probably a bunch of individuals who did stuff like use bitcoin as part of their wealth portfolio when taking out loans. But if those people had those holdings wiped out, will the ramifications be huge? My guess is probably not but I don't actually know how many people would, for instance, be unable to pay their mortgage if their crypto holdings imploded.
(This will be interesting to see if a crash does happen: in a world where you believe prices always go up, the "clever" move is to not sell your bitcoin, but to borrow against it, so it appreciates in the background still. But in a world where there's a crash, this could leave you worse off than before, the debt won't go away just because the price fell.)
I guess it was about 10 % at some point not too long ago?
So you won't see much effect in the real economy.
There is absurd amounts of Crypto lending that's probably causing a lot of margin calls forcing a negative feedback loop in Crypto prices.
Everytime this happened before - the Central Bank of Tether came to the rescue and printed 10% of the entire Crypto market cap in ~2 days to pump up the market ~30%.
Time will tell if they have the balls to do this now - when they're already under investigation in many jurisdictions.
If you are big into an altcoin, prepare for that to go up in smoke the next few months.
If you hold a lot of Bitcoin, make peace with it losing over 75% of value in the next few months. It’s going back to pre-covid levels at best.
It looks exactly like Robinhood (a liquidity issue), but without the faceless an unaccountable entity sitting behind them telling them to suspend trading.
These guys appear to be acting as middlemen between their New Zealand customers and several exchanges. Bank transfers take days to finalize (and weeks to settle), so their business appears to be built around capitalizing on that time opportunity and allowing their customers to lock-in quotes without having to wait for their funds to appear in their exchange account if they dealt directly with an exchange.
While the crypto markets are stable and the volume is predictable, everything is fine and they can maintain a balance on their exchanges and in their bank account. A sudden surge in volume (due to a massive price swing) means having to close shop and suspend trading while the transfer from exchange to bank account (or the other way) finalizes.
yes, this is absolutely in context indicative of the speculative circus ending.
Everyone knows the coyote has been running in air, waiting for various planks of a putative bridge to somewhere to materialize; those who put money into this vision who do not have it out now, will not get it back in a meaningful time frame, modulo dead cat bounce.
IMO "hodling" anything other than the most conservative (sic) of "coins" means taking a total loss. Bitcoin and Ethereum and a few others may crawl back over a few years; whether there is appetitive for another bubble with them is TBD.
It is not rational to believe their putative utility will emerge in that time; any future run up will merely be another round of speculation..
When Fed interest rates are low and credit is cheap, money supply increases and more of it flows into higher risk/return assets like crypto and drives their prices up.
When Fed interest rates go up and credit becomes more expensive, money supply decreases and funds flow out of high risk assets like crypto, driving their price down.
The current bear market will last as long as the Fed continues raising interest rates, then turn back into a bull market when that reverses. Unless there's a war going on, in which case all bets are off.
Of course, I didn't move my money into crypto so that might be the reason.
You can buy the dip! /s
Which would be shocking for a cryptocurrency platform!
Because crypto is so well known for the honesty of its actors.
Good news for $COIN?
Looks like they don't even maintain custody of user funds at all.
All this is very clear from the existing docs on their site.
Oh that's interesting. Then that's a very different proposition.
> Our fee structure is different to that of a brokerage or exchange. As a retailer, our expenses are generally higher than a sole crypto trader’s.
So apparently not an "exchange platform", but rather a "retailer".
Presumably they're trying to cater to less-technical folks who'd pay extra for the convenience/ease.
> What you see is what you get! Our advertised rates include ALL fees, and the price agreed upon at the time of purchase is fixed regardless of what happens in the market. Our fees appear slightly higher than exchanges because we have done all the hard work for you – with education and support to help get you started, and no need for you to deal with multiple exchanges or currency conversions.
OK, well that does explain things more neatly.
You and I have a different idea of what " pretty well" means, unless I missed something.
"We don’t hold customer funds – at the time of the trade, we send the cryptocurrency directly to your wallet"
I guess shows this isn't another Quadriga event. So that's good!
I spent a little time in the industry and the most prominent voices are just snake oil salesmen and charlatans now. Anyone who truly believed from the beginning made so much money that it’s not worth the risk for them to be publicly involved in the community.
It became an MLM for bros and basement-dwellers alike to gamble their stimulus checks on.
Just yesterday tether printed another billion usdt.
They were openly proven to have only 3% of their currency backed by USD by the NY AG but everyone just ignores that judgement.
They never held under audit, have proven to not be backed by USD and refuse to disclose their holdings. Their CFO is an Italian surgeon who sold pirated copies of Windows.
When eventually that falls, the entire space I figure will implode.
Crypto is new, so it's mostly recognized by early adopters - people that are more likely to change their mind in the changing circumstances. There's also a lot of the "get rich quick" crowd, money laundering, illegal purchases, and other activities there, but these are all the factors that support the price of crypto.
So yes, it's extremely volatile. Yes, its price depends on the mood of lots of moody people. But it's still a valid commodity backed by human greed.
For some context, a few years ago, they only did OTC trades (you ask for a quote and have a few hours to confirm the price and send the funds), with quite a large minimum of a few thousand. You only really delt with them if you wanted to on-road or off-road large amounts of New Zealand dollars. They didn't even run their own crypto wallets or have any infrastructure. They would just run accounts on larger crypto exchanges (binance?) and manually confirm deposits.
Looks like they have updated their process recently to be more automated so they can accept lower minimums, but their process apparently hasn't changed. They still don't hold customer funds and only trade between crypto and NZD.
It's entirely possible they ran into problems because their model isn't compatible with large downward volatility. Or maybe an exchange froze their account?
An OTC desk can be setup to spread the buy over several days / months, buy across markets, and optimize for best price execution. It's not necessarily a huge business, but a lot of businesses and high net worth individuals will use these types of services instead of trying to learn the skills themselves.
Bitprime allowed people in NZ to easily transfer value in and out of those exchanges. Or directly into a wallet for other services (i.e. buying NFTs or paying ransomware), or to hoddle.
If you do that by buying $10k x 10k transactions, your demand will increase the price of the asset and mean you pay more than current price for no good reason.
OTC desks either collect the $100m from large holders in big blocks, or they use working capital to constantly buy the asset and sell it for a single quoted price (hoping to gain on arbitrage).
In this particular case, they also offered the unique service of accepting /nzd vs. EUR/USD/JPY/KRW
Also, the best OTCs tend to be failure tolerant: website down or DDoS'd? Doesn't matter, you talk on Signal or WhatsApp or Telegram.
...?
If BitPrime was a CRM SaaS that shut down and laid off all 6 of its employees or whatever nobody would think to write an article about it.
https://www.wsj.com/amp/articles/pensions-bad-year-poised-to...
This has nothing to do with crypto and is going to hurt a lot of innocent people. Not a top concern for HN however.
https://community.intercoin.org/t/what-backs-a-currency-terr...
