Comment by MuffinFlavored | Hacker News Reader

Comment by MuffinFlavored | Hacker News Reader

Parent Full thread

Given the headline, you'd think Bitcoin would maybe be bothered, right? Wrong?

Bitcoin started the year at $16.6k USD and is currently $26.9k USD (a return of 62% year to date).

Why?

Who/what is dumping money into Bitcoin that would cause this much demand? Can the rise in price be attributed to demand? I don't see how it couldn't be.

How many millions of USD have been converted into "buy and hold" long term BTC investments? Is that the main driving force for this increase in price? It has to be a very sizable amount for BTC to be outperforming every other asset class... right?

There's no way the price is artificially up 60%+? How could it stay propped up? I've seen it mentioned many times before that crypto can possibly be manipulated by whales or "smoke and mirrors" if you will. Coinmarketcap.com says Bitcoin volume in 24 hours is roughly 615,000 BTC ($16b, 3% of the total circulating supply)

Is there more money going into BTC (inflow) than SPY/VOO/VTI/IVV/QQQ/mutual funds? I wouldn't imagine so. Why is the money that is making it into BTC (is the average middle American dollar cost averaging a portion of their paycheck bi-weekly into BTC through Coinbase?) able to increase BTC 60% YTD but a more sizable portion of money (because we can assume the stock market is much much larger of an investment vehicle) going into SPY/VOO/VTI/IVV/QQQ/mutual funds leads to a lesser return (SPY is up 3.95% YTD with like 1/4th of a 1.6%/year dividend in the process of being paid out so far, so call it 3.95% + (1.6%/4 quarters=0.40% quarterly dividend, Q1 just being paid out) = 4.35% return

>Given the headline, you'd think Bitcoin would maybe be bothered, right? Wrong?

>Bitcoin started the year at $16.6k USD and is currently $26.9k USD (a return of 62% year to date).

You're citing the growth in the last almost four months as evidence that Bitcoin isn't bothered by news that broke about an hour ago?

I just want to learn why Bitcoin is being taken so seriously as an asset class that it's outperforming bonds, equities, gold, silver, real estate, etc. (or if it is really, or if the price is being manipulated, and if so, how is that manipulation able to operate at this scale).

People are losing faith in the dollar. High inflation and bank runs play into this belief.

You mean like all the bank runs and high inflation in the crypto space?

> Who/what is dumping money into Bitcoin that would cause this much demand?

As usual, there's no way to tell if the demand is synthetic, or anything other than invented stablecoins and fake volume, because the entire market is deliberately opaque.

It’s the tether lending machine.

It wasn't operating last year when bitcoin was crashing?

Why/how was Bitcoin able to recover from its last crash? I get that "sentiment changed". But... who? Who was "afraid" of Bitcoin when sam bankman-fried got arrested/FTX collapsed, sold their coins, waited, saw everything get better, bought back in? Based on the price action, we'd have to assume a LOT of people have done that. Like, enough for it to shoot fall 21k -> 15k on the FTX news, then 15k -> back up to 26k. I just don't get it. Who is dollar cost averaging into Bitcoin with their fiat (USD, EUR, GBP, JPY, whatever it is) every paycheck? Millions of people? Where's the proof, other than the fact that "the price is up"?

I'm not sure whether this is sarcasm, but in case it's not: I do.

Do you do this on top of investing U.S. equities for retirement? What % do you invest in equities versus crypto? What % of your net worth is exposed to crypto and what % minority are you in for perspective for doing so (aka, if 50% of your net worth is exposed to crypto, you're obviously in a very small niche group and "biased")

Most Bitcoins are not bought with USD but with Tether and other stable coins. Tether is printed at the pace of billions per week recently so no wonder it lifts all the boats in crypto world.

> Most Bitcoins are not bought with USD but with Tether and other stable coins.

Isn't this like a pedantic detail? How is Tether bought? USD/EUR/GBP/JPY, right?

Fiat -> stablecoin -> BTC

Fiat -> BTC

basically the same journey

my point is, according to this https://markets.chainalysis.com/ there's $3b/day in BTC inflows...

> Fiat -> stablecoin -> BTC

> Fiat -> BTC

> basically the same journey

stablecoin == fiat is the lie that enabled and perpetuates the crypto madness

BTC holders always had trouble getting USD due to KYC onramps and offramps. People couldn't get out of a volatile BTC position back into stable USD fast enough... so holding BTC just wasn't worth the risk.

But Tether shows up and voila the holding problem is solved as it's a dollar "equivalent" that doesn't have to deal with pesky KYC laws slowing down USD cash-out. Let's trade one magic token for another on a whim, we'll deal with getting USD later. They're good for it. "Line go up" madness starts.

To anyone that's been actually paying attention, Tether is a house of cards waiting to implode. They are not worth 1 USD each, no matter how much anyone wishes, hopes or screams it does.

One by one the so-called stablecoins are being shown to be the garbage/scams they are. Once the market wakes up and realizes that they aren't actually worth a dollar, then BTC has nothing left to artificially prop it up.

Popcorn time.

Tether is printed and given out at will to buddies of scammers who run it. "Hey Paolo, can you help me with 100M as my exchange is in trouble?", " Sure thing, just write an IOU and I got you". Now Tether is "backed by commercial paper" and there is 100M of it in circulation to prop crypto.

And if you think my language isn't appropriate, Tether is run my literal scammers: a proven financial fraud and an online poker cheat. Chances of it being even semi legit operation are zero.

> How is Tether bought? USD/EUR/GBP/JPY, right?

The question is how much tether is originating as part of a cash transaction vs how much is being minted out of thin air specifically to buoy the price of cryptos.

That middle step is multiplying the fiat going to BTC because Tether (probably) is only partially backed and (probably) buying crypto to make money. So your one dollar that goes to tether gets multiplied. Something like

$1 -> 1 Tether -> $1 worth of bitcoin

$1 -> $1 worth of bitcoin (as an "investment" for Tether to make money)

$1 worth of bitcoin -> Collateral on loan to Tether -> $0.50 -> $0.50 worth of bitcoin

We don't know exactly what Tether is doing with their money because they don't open their books. Safe to assume it's some sketchy stuff though.

Sounds very similar to Robinhood's 2019 infinite money hack.

> How is Tether bought?

Nobody knows.

https://app.tether.to with wire transfer. There are high minimums, KYC requirements, and excluded jurisdictions (notably the US). Depending on your opinion these onerous requirements exist either for regulatory reasons or to prevent a bank run because Tether is not fully backed.

The point is that nobody can really say that all tether is bought this way, that there is a genuine flow from cash to the tether company to exchanges, and there are very reasonable suspicions that tether is just magicked into existence for use on friendly/complicit exchanges to help control the price.

Perhaps I should have said it's less a question of how tether is bought and more a question of if tether can be said to be bought, at its point of origin.

Are you saying more Tether is being swapped for BTC than is being bought with $?

Very little Tether (if any these days) is bought with USD. Tether admits themselves they don't hold USD reserves to cover it if it wasn't obvious already from other sources (there is much more Tether being printed than the whole inflow of money to Bahamas banks of which Deltec (Tether's bank) is just one.

Reply on news.ycombinator.com