They could have simply kept their assets in stable coins, like Dai, Tether, etc..They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken). Another option would have been to open a hedging short position on say, Bitmex. There's lots of ways they could have cashed out, effectively.
Exchanges have also been suspected of manipulating prices to liquidate future positions, there’s literally a twitter account dedicated to force liquidated Bitmex position.
When every player is operating in bad faith it is very hard to come up with a legitimate way to protect yourself other than not participating.
Those suspicions have always been extremely poorly grounded.
> Exchanges have also been suspected of manipulating prices to liquidate future positions, there’s literally a twitter account dedicated to force liquidated Bitmex position.
Not by anyone serious. Sure, people get liquidated all the time because they don't have enough maintenance margin. The risks are very clearly defined, and all you have to do is read them.
> When every player is operating in bad faith it is very hard to come up with a legitimate way to protect yourself other than not participating.
There is no evidence that the major exchanges are operating in bad faith. And even if they were, what is your point? My point is that they could have neutralized the currency risk of their assets. And that point is absolutely true.
I am really quite ignorant on the issue, but they seem to me like reasonable suspicions when Tether’s purported “audits” are anything but.
If the case is that Tether is actually insolvent, then history gives us a very good example of exactly what’ll happen once the run starts.
My point isn't that the market is rational or perfect. My point is that they could have hedged.
I believe for a while Bitfinex would let you wash trade with your own account, that’s how poorly run these markets were.
To turn into dust?
>They could also sell into USD on exchanges that allow you to trade USD (e.g. Kraken).
And trust Kraken then.
>Another option would have been to open a hedging short position on say, Bitmex.
and trust bitmex then.
There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
Oh, you mean the 'dust' that is worth exactly $1 at this moment, where Ethereum has lost 90% of its value? That dust?
> And trust Kraken then.
Yep, the exchange that's been trustworthy and operated seamlessly since its inception, sure. And still does.
> There are no scalable options to cash out $10m to a bank and sleep well. You could cash out into some "stable coin" only to wake up to it costing $0.04 (hello nubits). Tether is no safer in that matter.
You may not sleep perfectly, but you'll sleep a lot better than if you're holding it in crypto. And that is my point. And if you wanted to use Dai, you could actually sleep perfectly. Dai has held up perfectly well, and you can hold it off-exchange.
The most common disclaimer in finance, but equally applicable to all things in life.
However, if you would like to discuss probabilities then the history of the crypto market only reinforces the trend of failure as discussed in this thread.
Gemini, Coinbase?