5 ms·

Theory That Bitcoin Price Is Being Propped Up

15 points by new2this 4y ago

logicalmonster 4y ago
Let's be real. Nobody knows anything for sure. People who like Bitcoin will deny this. People who hate Bitcoin will use this as confirmation bias. /thread
- jqpabc123 4y ago
  Nobody knows anything for sure. We know for sure that "bad behavior" is fairly common in this unregulated "marketplace". If it's easy and possible and profitable, someone is going to do it. This alone is sufficient to deter a lot of sensible investors.
  - logicalmonster 4y ago
    The so-called regulated marketplace only has a thin veneer of propriety. Naked short selling is rampant, many financial statistics are entirely self-reported with barely a slap on the wrist for intentional fabrications, market makers have privileges to manipulate the price that normal folks don't have access to, etc. And one time the plebs got one over on the financial class (the GME thing) they literally "shut it down".
    - mrguyorama 4y ago
      >And one time the plebs got one over on the financial class (the GME thing) they literally "shut it down". That's not what happened. Robinhood (and a couple others) weren't prepared for a stock with no fundamentals to be bought by everyone, so they didn't have the collateral for it that was required.
      - logicalmonster 4y ago
        "Your honor, my client didn't throw Joe out of the window, he merely defenestrated him at high velocity." "Oh I see. That's totally different. Case dismissed."
      - kayamon 4y ago
        How did they not have the collateral? The customers money is the collateral.
      - andirk 4y ago
        It wasn't as nefarious as it seemed at first, but the fact is the systems of investment currently in place do not allow for plebs to manipulate it in their favor. I was only an observer rooting for the common man, but I still have a difficult time seeing Robin Hood as a useful tool when they were not able to execute basic buying of an EFT on an open market.
ploum 4y ago
So the central argument is that whales manipulate the price by buying bitcoins once the price is low. Isn’t that the definition of a market? Could you imagine an alternative where this does not happen?
- new2this 4y ago
  The central allegation is that Tether would print coins for themselves that were not backed by USD and then buy BTC. Thus, artificially propping up BTC in a price range where they could then quickly sell, pocket profits, and stor the money to back the Tether they just printed.
  - jqpabc123 4y ago
    In other words, gaming the system is pretty easy when you're printing/minting the money needed to do it. This is what puts crypto in a league of it's own.
    - yucky 4y ago
      Isn't this what the Fed does? Not that they're in the same league, but it feels like the same sport.
      - jqpabc123 4y ago
        Nope. The Fed does not print money for it's own personal/private use or to directly benefit it's members. The Fed is incentived to profit from economic growth and increased financial activity --- which theorectically works to everyone's benefit. Individual Fed board members are restricted from personally investing in the financial markets to avoid the appearance of any conflict of interest.
        yucky 4y ago
        > The Fed does not print money for it's own personal/private use or to directly benefit it's members. You're referring to the small handful of people on its Board of Governors, but the member banks are private institutions run by private individuals who absolutely have investments.
sebastien_b 4y ago
LOL “theory”.
muted_sorts 4y ago
We're about to transition to digital currency/tokens. Lots of laundering happening. And Tax Season is upon us, which correlates with deflation in price. Yet, BTC is riding above 20K. This is artificial inflation of the price of BTC, no doubt.
deleted 4y ago
[deleted]
gregw2 4y ago
This article is less concrete than the Bloomberg TV coverage I saw sometime this last week that discussed the same theme/possibility of Bitcoin manipulation in recent weeks. That coverage discussed that much of the pricing up-moves this past month are happening on weekends when there is less liquidity/action, and then saying some analysts see this as suggestive that some whale(s) are deliberately trying to push the price up (using weekends to get the most oomph for their trading dollar.) There was also an assertion that the market volumes involved in bitcoin are substantially less than in other more traditional markets so the market is more susceptible to this sort of thing. I have no knowledge of the truth of any of this, but there was a thread of a "fact" to that argument which I didn't notice in this Fortune article (so I pass it on.)
- andirk 4y ago
  The low market cap of BTC, albeit some 100's of billions of $, compared to the huge indexes, of course makes price manipulation easier. But as a fan of the technology and future use cases for crypto in general, I do think most of the fluctuation in price is emotional moreso than anything else.

15 points by new2this 4y ago

Let's be real. Nobody knows anything for sure. People who like Bitcoin will deny this. People who hate Bitcoin will use this as confirmation bias. /thread

jqpabc123 4y ago
Nobody knows anything for sure. We know for sure that "bad behavior" is fairly common in this unregulated "marketplace". If it's easy and possible and profitable, someone is going to do it. This alone is sufficient to deter a lot of sensible investors.
- logicalmonster 4y ago
  The so-called regulated marketplace only has a thin veneer of propriety. Naked short selling is rampant, many financial statistics are entirely self-reported with barely a slap on the wrist for intentional fabrications, market makers have privileges to manipulate the price that normal folks don't have access to, etc. And one time the plebs got one over on the financial class (the GME thing) they literally "shut it down".
  - mrguyorama 4y ago
    >And one time the plebs got one over on the financial class (the GME thing) they literally "shut it down". That's not what happened. Robinhood (and a couple others) weren't prepared for a stock with no fundamentals to be bought by everyone, so they didn't have the collateral for it that was required.
    - logicalmonster 4y ago
      "Your honor, my client didn't throw Joe out of the window, he merely defenestrated him at high velocity." "Oh I see. That's totally different. Case dismissed."
    - kayamon 4y ago
      How did they not have the collateral? The customers money is the collateral.
    - andirk 4y ago
      It wasn't as nefarious as it seemed at first, but the fact is the systems of investment currently in place do not allow for plebs to manipulate it in their favor. I was only an observer rooting for the common man, but I still have a difficult time seeing Robin Hood as a useful tool when they were not able to execute basic buying of an EFT on an open market.

ploum 4y ago

So the central argument is that whales manipulate the price by buying bitcoins once the price is low. Isn’t that the definition of a market? Could you imagine an alternative where this does not happen?

new2this 4y ago
The central allegation is that Tether would print coins for themselves that were not backed by USD and then buy BTC. Thus, artificially propping up BTC in a price range where they could then quickly sell, pocket profits, and stor the money to back the Tether they just printed.
- jqpabc123 4y ago
  In other words, gaming the system is pretty easy when you're printing/minting the money needed to do it. This is what puts crypto in a league of it's own.
  - yucky 4y ago
    Isn't this what the Fed does? Not that they're in the same league, but it feels like the same sport.
    - jqpabc123 4y ago
      Nope. The Fed does not print money for it's own personal/private use or to directly benefit it's members. The Fed is incentived to profit from economic growth and increased financial activity --- which theorectically works to everyone's benefit. Individual Fed board members are restricted from personally investing in the financial markets to avoid the appearance of any conflict of interest.
      - yucky 4y ago
        > The Fed does not print money for it's own personal/private use or to directly benefit it's members. You're referring to the small handful of people on its Board of Governors, but the member banks are private institutions run by private individuals who absolutely have investments.

sebastien_b 4y ago

LOL “theory”.

muted_sorts 4y ago

We're about to transition to digital currency/tokens. Lots of laundering happening. And Tax Season is upon us, which correlates with deflation in price. Yet, BTC is riding above 20K. This is artificial inflation of the price of BTC, no doubt.

deleted 4y ago

[deleted]

gregw2 4y ago

This article is less concrete than the Bloomberg TV coverage I saw sometime this last week that discussed the same theme/possibility of Bitcoin manipulation in recent weeks. That coverage discussed that much of the pricing up-moves this past month are happening on weekends when there is less liquidity/action, and then saying some analysts see this as suggestive that some whale(s) are deliberately trying to push the price up (using weekends to get the most oomph for their trading dollar.) There was also an assertion that the market volumes involved in bitcoin are substantially less than in other more traditional markets so the market is more susceptible to this sort of thing. I have no knowledge of the truth of any of this, but there was a thread of a "fact" to that argument which I didn't notice in this Fortune article (so I pass it on.)

andirk 4y ago
The low market cap of BTC, albeit some 100's of billions of $, compared to the huge indexes, of course makes price manipulation easier. But as a fan of the technology and future use cases for crypto in general, I do think most of the fluctuation in price is emotional moreso than anything else.