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Comment by Retric | Hacker News Reader

There’s a fair amount of liquidity, but trying to withdraw 1 billion in Eth is going to impact it’s valuation.

Ethereum's daily trading volume is $7 billion, so it's likely that $1 billion would hardly affect its valuation.

Now subtract out the wash trading. I'm not saying it would or wouldn't affect the valuation, I'm saying that the top-line volume is a known fiction. Remember when "Coinbase Employee A" traded some 99% of the entire global LTC volume between two bots at Coinbase? Sure it's old news, but that's the most reputable exchange. [1, 2]

Much of the crypto market is a digital Potemkin village designed to make you feel like you're not nearly as alone as you are.

[1] https://www.cftc.gov/PressRoom/PressReleases/8369-21

[2] https://news.bitcoin.com/ipo-coinbase-pays-cftc-6-5-million-...

Potemkin as an adjective is such a useful tool when talking about the crypto scene. here's a post from when I used it extensively I guess about 8 years ago, in the same vein. Unfortunately as part of the cold war argot it seems to just draw blank stares from a lot of people under 35 or so.

<https://www.reddit.com/r/Buttcoin/comments/3hrum5/degenerate...>

"Potemkin exchange, Potemkin conversation, it's Potemkins all the way down. Like a matrioshka doll each layer deeper is identical to the one before, but smaller and less articulately defined. "

I wish I could take credit for the term, but I'm also a huge fan of 'Sierpinski scheme'.

Also, what on God's green flat earth was that article about? The one you were responding to, lol. I mean the late Mircea Popescu was a real piece of work, but, just, wow.

Popescu is like the ur-bitcoiner, and by extension the ur-kleptocurrency scumbag. He's one of the handful of people who have (or in his case, had) quite a bit of influence over the perpetual number go up movement of the market cap due to being one of the very earliest large hoarders of coins at penny prices, and a complete Kool-Aid drinking Central bank/central government hating misanthropic troll.

Although I will say in his direct company, he was fairly well-mannered and clearly had a curious mind but one warped by what must have been some sort of Trisomy on the asshole gene.

That article was lifted directly from his blog which, I'm not sure may still be active even now, that contain much of his musings on that same topic as well as lots of others, all as reprehensible and in my view absolutely would have entitled him to an early death - assuming he didn't fake it.

Sierpinski scheme, hah! Now I really want to somehow tie that end with Zooko's triangle. Reminds me of the guy who made a guide to "writing your first ethereum contract in Pyramid Scheme" oh another variation just occured to me: Fractal Fraud

You...don't have to subtract anything.

Liquidity is liquidity.

If liquidity goes away when big boys start selling, then, well, someone would have picked up on that, shown that, with data.

Otherwise, the (very real!) accusations of wash trading and other price fixing don't have tons to do with available liquidity, which as a term, refers to an investors ability to sell in a timely fashion.

You can sell $150M worth of ETH right now on-chain without moving the price much. If you aggregate the other chains and exchanges it's probably close to $1b in an instant sell, of course if you TWAP you'll get much better execution.

Daily trade volume doesn’t represent what it used to as market makers/HFT algorithms get into and out of positions several times a day. What matters for estimating impact is essentially the net flow across the day/week/whatever not the transaction volume. It’s unlikely to precipitate a sell off but a 1+% dip in the short term isn’t unrealistic.

Ethereum has 1% dips regularly, on the hourly. In crypto, that’s generally considered very stable.

By short term I mean weeks to months not minutes.

I doubt anyone would try and liquidate it in a single transaction on public markets.

One transaction accounting for at least 15 per cent of the trading volume for a day absolutely is going to affect its valuation.

How many things are there on earth that you can suddenly sell $1 billion worth of, and not lower its price? I never hear this criticism of any other assets even though it applies to virtually all of them.

Even on Uniswap, swapping 10,000 ETH ($18.5M) has just 0.9% slippage.

There is pretty decent liquidity for ETH and BTC at least, both on and off-chain.

If that’s what people where liquidating then it’s not problem, but 10,000 ETH and 2,000,000 ETH are just wildly different numbers here.

ETH has a $223b market cap, so 1b is .45%.

No? It's not?

https://coinmarketcap.com/currencies/ethereum/

Regardless, 1 billion is not 4% of 223 billion. You’re off by a factor of ten.

fixed... =)

0.45%

damn maths. thanks!

Market cap is not market depth, you can't withdraw $223B from a speculative asset with a $223B market cap. Just look at SafeMoon lol. Market cap isn't a bank account. It's determined at the margin by the last transaction price multiplied by the number of units outstanding. Bringing it up in this context is just misleading.

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