Bitcoin blow as fund drops U.S. exchange application | Hacker News Reader

Bitcoin blow as fund drops U.S. exchange application

reuters.com

71 pointsuptown74 comments

It says this fund is still traded at unofficial exchanges at prices a number of times higher than the value of the bitcoin it holds. The multiple layers of speculative mania involved in that boggles the mind.

It trades on the OTC Bulletin Boards since 2014 or so, and is prime for getting easy exposure with IRA accounts simply because it can be accessed through normal brokerages.

Hasn't exactly been a bad bet for those people.

Different prices at different trading venues speaks to the difficulty of moving funds quickly between them. When those hurdles are overcome, such a glaring arbitrage opportunity will disappear.

Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges?

You're probably correct, but...

>Would you consider it "speculative mania" if GBTC traded at a steep discount to all other exchanges?

This is as shallow an argument as "If Jimmy broke his leg getting hit by a car, would you say I got hit by a car if I broke my leg?"

If you were also playing in traffic, then yeah.

To get live data from ICE--the exchange that withdrew the request--I'm currently paying a broker $120/month.

By comparison, just about every crypto exchange currently offers push feeds and historical data for free. In most cases you don't even need to sign in.

In some sense this is a measure of the immaturity of crypto markets.

But it's also a reminder that with main institutional players moving in, the barriers to entry will go way up.

We'll probably start to see more brokers and vendors and more consolidation/buyouts of the crypto exchanges.

As a fund manager, I wish there was a data warehousing service I could pay for with a queryable by the minute (or better granularity) API that captured multiple exchanges across multiple countries for the top 50 coins.

I would pay a lot monthly for that product. Such a pro-level service doesn't exist at all yet.

Also there aren't any derivatives or futures to speak of yet (don't point out the existing futures markets, they have no volume).

Source: I run CryptoLotus, a crypto hedge fund.

If you're interested in building this, you can easily stream data at any scale into Google's BigQuery [1] from any number of clients, using simple HTTP POST requests, and then have a single SQL-queryable interface to that data.

[1] https://cloud.google.com/bigquery/streaming-data-into-bigque...

Reading what you describe, I think Coinigy does this currently. I have a premium account and use it as an 'exchange aggregator' for my trade portfolio, to trade on and trade between many different exchanges with many trade pairs, and I believe it offers an API so that I could essentially abstract their frontend from the process. I pay about 20 dollars a month.

Yes, Good source for BTC historical data

https://www.coinigy.com/bitcoin-data/

BTC is easy. There are a million sources for it. The altcoins are the hard ones.

Which trade pairs are you looking for that Coinigy doesn't track and service already?

There's at least two of these: https://www.coinapi.io/ https://cpxtrading.net/news/

CPX doesn't have the breadth of exchanges I'm looking for. CoinAPI is interesting. I'll play with it and give you an opinion.

I know the guy who did it a little; it's new, but if you have requirements, ping him and he'll probably fix it for you.

What do you think of Bitmex?

The bitmex founder is brilliant. Read their newsletter, it's some of the best writing in crypto.

I believe that as small exchanges are attempting to gain market share, giving away their data makes sense. They need to advertise the liquidity on their market in order to attract business. As exchanges get bigger, they reach a point where they think, "You know what, there are a lot of people who can't run their business without quotes from our exchange." And they start charging for data. And it's true, and furthermore, there are large financial institutions that are farily price insensitive. So they keep raising and raising prices. I don't have any hard evidence of what the end result is. Price equilibrium? Implosion of liquidity because nobody wants to buy their data any more?

Given the volume of data from ICE, $120/month is reasonable. I don't think they price data to profit from it -- just to ensure their systems are used by serious actors.

So what you're saying is greedy people will put a price on everything they can touch just to suck everything around them dry.

Its been priced in that nobody expects the SEC to approve that application.

But pay attention to this space, the guy who worked on the Winklevoss Bitcoin ETF - which got rejected too - has taken the job at the SEC of approving ETFs. The last guy finally quit because of some red herring about supporting the trump administration or something (the Chairwoman Commissioner quit too)

I love when a power vacuum gets people I like in government, especially when nobody is noticing.

Whoa. So the likelihood of an SEC-backed coin exchange is... nonzero??

well if crowdfunding can get OK'd ..... why not crypto?

https://www.sec.gov/news/pressrelease/2015-249.html

Crowdfunding was OK'd by Congress in the financial reform bill of 2010 and the JOBS act of 2012, it took the SEC 3 additional years of dragging their feet to be forced to be "okay" with it, and the SEC introduced many compromises which makes crowdfunding under those regulations to be dead-on-arrival with the 1 million usd limit and similar costs as other kinds of fund raising.

Despite that, understand that crypto enjoys no such luxury from Congress, and what we are talking about here has nothing to do with crowdfunding via crypto like the ICOs, but instead digital commodity trust ETFs

Establishing giants in the bitcoinosphere, effectively?

yes, they've brought this on themselves. there is a vast conscience of ideas and an even vaster risk taking public, that has been shut out of the markets for reasons such as lacking pedigree or preexisting wealth.

GBTC is a regulatory dodge that does not reliably track the price of bitcoin. As someone who wants a bitcoin ETF, I’m certain the SEC would not have approved the listing of GBTC and very confused as to why ICE (who should know better) ever thought they would.

Huge blow to bitcoin. It's down a whopping 3%.

I think it'd be great to be able to trade BTC on a regular stock exchange, but I'm not going to hold my breath for that to happen. Also, I think the big players who have an interest in speculating are already holding and not sitting around thinking "aww rats, it went up another 50% this week, if only we could buy it on the stock market!" Or maybe they are and once it hits the market it'll shoot to 20k. Who knows.

Mark Cuban's bubble tweet gave it a bigger slide. I'm not sure where it's headed but it sure is a wild ride.

That's overstated. I can already exchange Bitcoin easily and it's the best return I have of all my funds.

It would generally be appropriate to say things like "was the best return" or "has been the best return" when describing past price appreciation. "Is the best return" could be reserved for something like a stable source of income.

Many people earn income in bitcoin or cryptocurrency and would consider the US dollar the poor investment or purchase.

It is all a matter of perspective which simple wasn't apparent because there weren't options a decade ago.

...for some definitions of "many"

Literally dozens.

thats probably true, the philosophy has been there since at least 2012 though

This is a bit different, BIT is an open-ended trust that derives its value solely from the price of Bitcoin; not a direct exchange of Bitcoins.

Dramatic title

RIP bitcoin. Current valuation is $4142.99 higher than it should be.. Im thinking we will get there within a couple of years. $1-2 seems about right per 1 BTC.

As someone involved in this stuff since 2011, the constant "death of Bitcoin" predictions are sooooo tedious.

Bitcoin only died 171 times so far: https://99bitcoins.com/obituary-stats/. The first time was in December 2010 when it was priced at $0.23.

In theory, the governments may try to kill it once it reaches too far (to the point of being considered fiat money). However, the said government will also invite lots of backlash from the people and technically, no single government can stop the blockchain network completely.

> no single government can stop the blockchain network completely

Would you like to place a wager on that?

They cannot. Once the transaction becomes part of the blockchain, its replicated to each and every node in the world (we are talking about thousands) that span the length and breadth of the planet. Thus, its practically impossible.

Quick thought experiment: I just did a quick back of the envelope calculation on the brute force approach. 50% of the current hash rate would be 548 million retail - (current rate 8M TH/s, 1850$ retail Antminer S9 rated 13.5 TH/s). That's a quick thought on naive approach - not sure I have that right, so please check my work. I have a few other ideas as well. edit: of course, the existing hash rate would still be there, so you'd have to double it, not buy half. I still think the retail estimate is on the high side (markup, not leveraging economies of scale). My guess is that an organization like DARPA could buy Bitcoin for <250M$.

I think large states definitely have the resources to launch 51% attacks

But large states cannot do it in a legit manner as they have to follow some constitutional rights of their citizens. Most constitutions of these countries have enough freedom rights paved into them to avoid such blatant action by the government. Besides, the backlash in the media would be unbelievable, the party that does this kind of thing may not find many voters in the next election due to the negative press (at least in technologically advanced nations like USA and Sweden where people are generally aware of online rights).

Which US constitution clause would prohibit the US government from launching a 51% attack?

The fourth amendment?

Where you live sounds very nice.

getting the timing right is pretty much next to impossible. this does not change the fact that it will ultimately end that way.

> getting the timing right is pretty much next to impossible. this does not change the fact that it will ultimately end that way

The argument that anything ends at some point is fruitless. Not sure how you are separating BTC out from anything else here

What about the cryptomarket as a whole, 1-2$ total down from 100-200 billion?

Things that enable previously impossible use-cases don't just go away.

Yeah, it's a pity that more technocrats don't actually understand how bitcoin works, why it is innovative, and how supply and demand control prices.

Please, can you guess me the numbers of the EuroMillions lotto?

The $1 valuation strikes me as way more arbitrary than $4k. What features mean that it should be near USD parity? It should either be above or below the USD based on >>insert valuation technique here<<. But why should it land near $1-2? Why shouldn't it be $0.003 or $30.00?

If it should somehow land on parity with fiat currency then maybe it should be a weighted mean of the global currencies but $1-2 seems incredibly arbitrary.

So, the fact that people are over-paying for bitcoin by 2-3x its market price suggests to you that demand will rapidly decrease?

can you please connect that with logic?

Yeah...$20 million market cap seems reasonable... smh...

What is "smh"?

"Shaking my head".

"shake my head"

Thank you.

There is utility in BTC thats why im putting 1-2$ value on it.

4000$ + per one BTC is pure insanity that will soon end badly for most "speculators".

There is nothing new under the sun. Go back to the tulips and many booms and busts after. Its happening with BTC now. And just like all the others it will end the same.

> There is nothing new under the sun. Go back to the tulips and many booms and busts after.

Predicting bubbles is nothing new under the sun. I remember 10 years ago when craft beer was a bubble. I also remember 5 years ago when a buddy of mine in finance told me "tech is a bubble because there are too many languages". Everyone is an expert, and everyone can say "tulip" as if it's meaningful.

Craft beer is tasty, many people love it and regularly buy it to consume it; not to store it in the cellar with the hope that one bottle will cost $50000 in 3 years. That's real business that has real profits.

Regarding tulip mania: The 1841 account is based upon a 1797 account which was sourced from "three anonymous pamphlets published in 1637 with an anti-speculative agenda" contemporary historians describe as "pieces of propaganda and a prodigious amount of plagiarism"

A historically honest account characterizes tulip mania as "no more than a meaningless winter drinking game, played by a plague-ridden population that made use of the vibrant tulip market."

So, assuming you are making a parallel between bitcoin and the fictional "propaganda" narrative of tulip mania: that comparison falls apart quickly, since (1) bulbs have an exponential growth rate. (2) the 3 year crash did not feature boom + bust cycles with steadily increasing bottoms. (3) Bulbs are not permanent or fungible. (4) short selling bulbs was illegal. (5) bitcoin is not subject to a decree by dutch parliament that futures contracts must be options with the buyer allowed to back out for a 3.5% fee.

The way that bitcoin mirrors tulip mania is that it is subject to "propaganda" with an "anti-speculative agenda", and that both took place during a rapid increase in the fiat money supply.

the fact that you tout the "tulip mania" example shows that Bitcoin and markets are not the only things you know little about:

http://www.smithsonianmag.com/history/there-never-was-real-t...

> BTC is pure insanity that will soon end badly for most "speculators"

> Its happening with BTC now

Join the long line of people that have been saying this for almost 5 years and have been so soooooooooo wrong

Did you read the article you posted? Actual tulip mania, as described in the article, is much more similar to what is happening in bitcoin than the mythologized tulip mania.

Frantic speculation in a narrow space with the market eventually crashing when speculative buyers are no longer willing to bid up?

What was going for tulips is that they had an "expiration date" bitcoin will probably take longer because there's no such thing.

To me bitcoin lost its appeal after transaction fees became high. The value is ok, since you can still use fractions of it, but current transaction fees and time to wait for confirmation makes it unsuitable for daily use. So in my mind bitcoin already failed what it supposed to provide.

> Join the long line of people that have been saying this for almost 5 years and have been so soooooooooo wrong

You're overstating your case. They just haven't been proven right.

In such a young, poorly understood, and speculative, environment it seems reasonable to suspect a bubble. 5 years doesn't prove or disprove anything.

The first time I saw someone refer to Bitcoin as tulips was in 2011 when I started in the space. I'm sure others labeled it as such as soon as it started trading in 2010 at $0.06.

a few people have been called crazy for pointing out bubbles... prematurely. it does not change the fact that its still a bubble. as i said getting the timing right is pretty much impossible. time and market will be the ultimate judge ;)

Do you think that the entire space "is a bubble" as in, "cryptocurrency itself will go away one day." Or did you mean "is in a bubble" as in, "the price will drop significantly someday."

cryptocurrency clearly has utility. it may stay as it is or most likely undergo some changes and stay in a different format. The issue is valuation - yes, it is bubble IMHO thats going to pop. Timing of that "pop" is a million dollar question.

You're in luck! Blocks of 10,000 Satoshis are currently trading at a little over $0.41; they haven't even reached dollar parity yet.

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