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Cryptocurreny retailer BitPrime closes trading after running out of money
- soared 4y agoWould someone mind calming me by explaining why this is not a huge red flag, this isn’t the beginning of the end, and a theoretical crypto crash won’t throw the market into turmoil (or why the current market turmoil ain’t so bad)? I don’t have any kids to feed, just young dumb and tired of market crashes.
- deleted 4y ago[deleted]
- SkipperCat 4y agoBitcoin market cap is about 580 Billion. SP500 market cap is about 38 Trillion. During unremarkable market swings, the SP500 gains and loses the entire Bitcoin market cap daily (1.5%) Crypto can go to zero and the world will continue on.
- daniel-cussen 4y agoThese days rather, it loses and loses the entire market cap of bitcoin daily.
- xwdv 4y agoWhile this particular event doesn’t mean much, if you are heavily invested in crypto you should be anything but calm. 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.
- glerk 4y agoBTC, ETH and XMR are pretty comfy. A lot of scams are going to get purged, and that’s a good thing. Good projects will survive as they always do.
- xwdv 4y agoBTC already dropped another 1000. Will continue dropping.
- glerk 4y agoIf you’re so sure about that, put your money where your mouth is and go short it.
- aaaaaaaaata 4y agoLots of 1000s to go.
- deleted 4y ago[deleted]
- gjvc 4y ago"The normalized insanity from the past several years is just beginning to unwind."
- imron 4y ago> or why the current market turmoil ain’t so bad You can buy the dip! /s
- cozzyd 4y agoBuy some (casino) chips first, then the dip...
- randomfinn 4y ago> a theoretical crypto crash won’t throw the market into turmoil 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.
- smabie 4y agoReally hard to know the exact breakdown, but there's also a significant amount of institutional activity in crypto too. The recent crash has put a large whole in the balance shit of many trading firms and VCs
- gumby 4y agoCryptocurrencies are a tiny and insignificant part of the financial landscape. Maybe (formerly) a bit larger than VC but even less influential.
- senectus1 4y agoIt seems to be (I hope so anyway) quite inbred as well... for the most part, only those in the crypto space should be affected. with little repercussions in the wider world
- grapeskin 4y agoBitcoin alone was apparently given a market cap of over 2 trillion recently. 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.
- beezle 4y agoSlightly less than Apple's market cap.
- adamnemecek 4y agoGDP is annual. Market cap is not. It’s like comparing income with net worth.
- variaga 4y agoIt's the classic mistake of comparing stocks and flows
- aaaaaaaaata 4y agoTo Belgium, perhaps.
- the_gastropod 4y agoMarket cap is a hilariously meaningless term in the world of crypto. $2 Trillion very simple <number of coins> * <last purchase price> calculation. Nowhere near $2 Trillion of actual money are in this system. Comparing this to the GDP of one of the largest economies on the planet is... well, it's just silly.
- chris123 4y agoAll you have to know is that any coin that has to be backed by anything is a shit coin. Think about that. Understand that. There's only one coin that is not backed by anything, that has no founder, that has no ulterior motive, that is not centralized, that is not designed as a get rich quick scheme for the founders. And the venture capitalist, in the backers. You know which one that is. So if you make that realization, however painful, that might be, you are neo, you have taken a red pill. And no, that real world, your first glimpse of it, it's not going to be pretty, but then, after you process, you will see it is beautiful, it is full of hope and love, you have found home.
- deleted 4y ago[deleted]
- trophycase 4y agoNobody who uses crypto has ever heard of BitPrime
- woah 4y agoThis is some random startup nobody has heard of. HN likes to work themselves into a froth over every scrap of bad crypto news, but this is utterly insignificant. Crypto will continue to fluctuate wildly as it always has.
- xur17 4y agoAnd they're not going insolvent / losing customer funds. They are shutting down because they were not able to run their business profitably.
- rabuse 4y agoYeah, never heard of this exchange before.
- fny 4y agoDotcom bubble friends. BITO ETF at the top to unload VC capital onto a bag holding public.
- zionic 4y agoThis. They did the same thing with “terra USD”, some shitcoin I had never heard of until it failed. It was even named to confuse people by sounding like USDT. HN is only a step above CNN when it comes to trustworthiness on this specific topic.
- cycrutchfield 4y agoUST was like the #8 cryptocurrency by market cap…
- atleta 4y agoI'm not positive on crypto in general, but they seem to have run of of their own money (capital) and not their customers' money. I.e. they didn't lose their customers' coins. Actually, it seems that they have never held them anyway. So it's not like a bank crash. 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.
- Barrera 4y agoExchanges are auxiliary to Bitcoin. The protocol works quite well without any need for an exchange. The exchange in question is a small-time player. Back when the biggest of the big time players, Mt Gox, went under in 2014, Bitcoin came back stronger than ever.
- ascendantlogic 4y agoIt sounds like it's a business that has run out of its own money at exactly the wrong time. There's no customer deposits on this exchange in terms of crypto accoording to their FAQ so this is a case of "startup runs out of money", not "crypto is going to zero"
- jimmydorry 4y agoMy speculation: 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.
- hluska 4y agoI don’t like crypto and in all truth, I would love to use this as evidence that I’ve always been right. However, at its core, this story is about some random startup running out of money. It doesn’t mean a thing and I can’t possibly use it to slag on crypto.
- shadowgovt 4y agoI haven't seen a market crash since the housing crisis. Of course, I didn't move my money into crypto so that might be the reason.
- grey-area 4y agoThis is a sign (among many) of the endgame yes. If you have money in cryptocurrencies and can get it out you should do so now.
- SkyMarshal 4y agoCrypto is still a new and high-risk asset, and is considered a risk-on asset by all of the broader financial markets. 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.
- onlyrealcuzzo 4y agoLuckily we were still at the beginning of banks lending REAL money using Crypto as collateral. 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.
- aaroninsf 4y agoIf you're talking about the crypto market crashing, 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..
- rabuse 4y ago
- lostmsu 4y agoMonthly?
- burnished 4y agoTechnology forum has articles about controversial (polarizing!) technology topic. Tbh, the tenor here also isn't doomsday predictions, it's some "elaborate on the core value, any value" with some jaded cynicism akin to assuming any unknown telephone number is a scam call
- cute_boi 4y agoI am amazed how dominos are falling one by one.
- smabie 4y agoThis is literally some no name small OTC desk that caters to the New Zealand retail market. It's success or failure doesn't really mean anything.
- cute_boi 4y agoYea, I know, but my opinion is based on multiple news not just this post :). https://community.intercoin.org/t/what-backs-a-currency-terra-luna-drops-nearly-100/2518 https://community.intercoin.org/t/what-backs-a-currency-terr...
- progx 4y agoIn a volatile market, when most of the trades happen, a trading platform run out of money. Aha.
- Nursie 4y agoThe question is here - how can they run out of liquidity in the first place? Surely as an honest exchange platform you match buyers and sellers, and take a transaction fee? This implies they have been playing games with customer deposits. Which would be shocking for a cryptocurrency platform!
- djbusby 4y agoIf they didn't have an exact match for the deal maybe they just were the other party - waiting for the other side of the txn. So, in the middle they kept losing a bit on each deal as crypto dropped and poof...the market-maker funding pool is zero. Good news for $COIN?
- throwanem 4y agoThey could certainly use some right now.
- 3np 4y agoThey're an OTC platform and retailer. Meaning when customers buy or sell through their platform, the counterparty is Bitprime, not other customers. As for their "swap" service, that's just proxied to Changelly, another company. 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.
- Nursie 4y ago> the counterparty is Bitprime Oh that's interesting. Then that's a very different proposition.
- toxicFork 4y agoThey explain it pretty well in the article.
- readthenotes1 4y ago"Our overheads have exceeded our earnings for some time" You and I have a different idea of what " pretty well" means, unless I missed something.
- llamataboot 4y agoIt has only just begun...
- version_five 4y agoMaybe... from what I see (which is limited), "crypto" is feeling the same downward pressure that other stocks like tech are feeling (someone just posted an article about that). But people still haven't come around to the "this is just BS" phase yet that needs to happen. All crypto under current operating models is worth zero, it doesn't need to be marked down, it needs to (and will) be recognized as a scam and written off. I don't see progress towards that out of any of the news I've seen.
- junofan 4y agoI don’t understand the go-to-zero case. Surely an open source, permissionless financial system has some value? There’s tons of value being captured in closed financial systems.
- the_gastropod 4y agoSurely an open source, battle-tested, massively widely used operating system like Linux has some value? There's tons of value being captured by closed operating systems.
- smabie 4y agoBut there is tons of value being captured by closed operating systems?
- the_gastropod 4y agoWindows is closed source and quite a profitable part of Microsoft’s business.
- Spooky23 4y ago
- seibelj 4y agoThis is not a product anyone has heard of. Negative crypto stories get a lot more play on HN than the legions of tech startups laying off workers, and FAANG stocks ruining RSU packages. The whole world of markets is being popped right now. For example pension funds are doing terribly: https://www.wsj.com/amp/articles/pensions-bad-year-poised-to-get-worse-11652175002 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.
- woah 4y agoGrubHub stock is down to $3 after a high of $20. Food is a scam.
- burnished 4y agoDo you know that GrubHub doesn't make food, their business model doesn't have anything to do with food, except in the most tangential sense?
- aaaaaaaaata 4y agoWhat does this have to do with perceived value based on today's market rate...?
- burnished 4y ago>>GrubHub stock is down to $3 after a high of $20. Food is a scam. It is a response to this statement. Grubhub and food are not linked.
- Swenrekcah 4y agoInteresting analogy, since food is the prime example of the sort of real and true value of which crypto has absolutely none.
- rchaud 4y agoNot a scam as such, but definitely a service that's been propped up with investor money, and is only now facing the realities of having to deliver real profits.
- rco8786 4y ago“Small startup closes after running out of money” is not a terribly catchy headline I guess.
- mdoms 4y agoIt's also less descriptive, accurate and precise.
- rco8786 4y agoYes true, but my point is more that the headline is purposefully catchy (which is fine, it's a headline) but the actual content is not really noteworthy in any way except that "cryptocurrency failing" gets people's attention. 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.
- Lerc 4y agoI don't know about that. They include the word small. Judging from the original headline and HN story position, how big would you estimate this business to be?
- robocat 4y agoYou can estimate business size from: https://www.bitprime.co.nz/about-us/ https://www.bitprime.co.nz/about-us/
- deleted 4y ago[deleted]
- krnlpnc 4y agoCanary in the coal mine
- KarlKemp 4y agoAnd that coal is needed to run a bunch of space-heaters made by NVIDIA.
- QuickMVP 4y agoWhere is the media what talked paper numbers as real valuations?
- phire 4y agoHmm... Bitprime have grown since the last time I was paying attention. 20 employees.... 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?
- claytonjy 4y agoWho is the target market for such a service?
- samstave 4y agoyes ...?
- phire 4y agoThere are plenty of crypto exchanges that only deal with crypto. Or only have on/off ramps for some local currency that isn't really practical for people outside of that one country. 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.
- tracer1 4y agoGenerally OTC desks are useful for large purchases. Let's say you want to acquire $100 million in Bitcoin - you could go to Coinbase and just do it, but you'd drastically move the market, have a really obvious candlestick, and an observant third party could look for large movements from Coinbase and potentially track your holdings / de-anonymize you. 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.
- dehrmann 4y agoThis seems to be a small player, so it's not especially concerning, but when the Coinbase CEO says his company has "no risk of bankruptcy," it's one of those moments where I wonder why he felt he needed to say that. Sure, they reported it as a possible risk to the SEC, but then "nothing to see here, folks" doesn't inspire confidence.
- bau5 4y agoGrandstanding is commonplace in crypto. If you don't talk big and everyone else does, you sound like you lack confidence.
- notananthem 4y agoCoinbase is gonna get rekt if their earnings and general operations are any indication
- mrtweetyhack 4y ago
- qeternity 4y agoWould not be surprised if they were keeping their treasury in UST as a number of other companies had been doing to earn 20% yield from Anchor.
- Damian21 4y ago[dead]