Please vote in the poll about the future of this thread: https://bitcointalk.org/index.php?topic=1993570.0

It reads to me like the growing hubub triggerring a bank run, and then Tether creating this incident in-house as a delaying tactic. Classic ponzi bank run behavior.

I've been feeling that the price jump has been built on FOMO speculation for a while now. I think that the real, solid base is around $6k (roughly following the longer-term linear trend), but I expect speculators to stabilize it if it reaches $10k, at the very least, and then those prices might or might not stabilize.

So IMO $6k and below is "solid", $6k-$10k is semi-solid, and everything above $10k is a house of cards. No idea what'll actually happen in the next few days, though; it's pure speculative madness. In the next hour, I wouldn't be surprised to see a drop to $10k or an increase to $16k.

BCH is so boring technologically... ETH has better tech for cash-like transactions, with their effectively-unlimited block size, short block intervals, and uncle blocks, and ETH isn't even specifically designed for that. (Note: I have never owned any ETH.) People are going to claim that I'm saying this just because I have a personal grudge against BCH (which isn't really true), but I just can't take BCH seriously at all.

The drop is clearly due to the fact that Bitcoin is backed by drama, and there has been a shortage of drama lately.

Things are awfully quiet right now. We're going to need some real spicy headlines like:

Mark Karpeles to reopen MtGox; initial balances set by lottery
Bitcoin Core devs call for reducing the max block size to 100kB. "Fees are too damn low!"
Tether announces that USDT is now paying 7% weekly interest

A couple of months ago I heard someone on Bloomberg Markets saying that all assets were inexplicably rising at the same time -- stocks, real estate, collectibles, BTC, etc. And now it seems that all assets are falling at the same time. What is the underlying reason for this? One explanation that comes to mind is that people are selling all of their other assets in order to buy into the falling stock market. Or is it some underlying economic thing with the fiat economy?

P.S. I totally called it in this post:

I tend to be a perma-bear, but this most recent crash feels really artificial.


There really should be no reason for 2014 to recur, since the overall situation is so immensely different, but I also can't help but see parallels. I've always thought that the upward movement after the 2015 doldrums was driven to a significant extent by the 2016 halving, though, which wouldn't apply to a time-accelerated model. And in 2013-2015 the price dropped about 83% from its ATH, which would lead to a price of about $3200 in the current situation.

Meta idea: since people are always making price predictions, I was thinking that it'd be cool to add a "Speculation score" number under your posts/merit/activity while in the speculation section, with the score based on some continuously-running price prediction game. I probably don't have time to develop a game like that, though. But if someone else creates it off-site with the necessary APIs, your site could provide the scores for the forum. Anyone want to create it?

No, I'm imagining a game that's at least somewhat separate from normal posts. At the very least you'd have to specifically indicate your prediction in your post contents so that the system could understand. (But I'm really imagining a separate website that's not linked to posts.)

Interpreting post contents is too difficult. Modern AI is powerful enough that you could probably do it with >90% accuracy, but it'd still be too inaccurate to actually be satisfying, and designing and training an AI to be even halfway decent would take tons of time.


There are many possible ways of doing it. If I were to create the game, I think I'd do it in the style of parimutuel betting, but using play-money chips. So:
 - If you're willing to bet at least 10 chips, you could create a new prediction, like "I predict that the price will be between x and y at time t".
 - People could bet on either side of existing predictions.
 - Once the prediction is decided, the chips of the wrong side would be distributed amongst the betters on the right side, somewhat-proportionally to their respective bets. However, the rewards formula would need to give more reward to people who placed bets earlier than others. (You could copy the rewards formula from one of the existing parimutuel betting sites.)
 - Whenever you have less than 10 chips, you're given chips so that you have 10 chips. So even if you're constantly wrong, you can still keep playing.
 - Your speculation score equals your current number of chips.

It sounds like it'd be fun to write the game as I described, but it'd probably take me ~40 hours, and I just can't spend that kind of time on such a niche feature.


Something like that would be fine, but I don't want to run any manual competitions. If someone wants to do that, you'd just have to create an unchanging URL from which the forum can automatically import scores.

I read through the Tether manipulation paper. IMO it made two convincing points:

#1 Someone has a habit of doing this:
 - Issuing new USDT
 - Within days, moving that USDT to BitFinex, Bittrex, and/or Poloniex
 - Using that USDT to buy crypto (seemingly a portfolio of BTC & others). They especially like to buy crypto when the price is just below whole numbers.
 - Moving the resulting crypto back to BitFinex
 - Rarely or never selling the crypto for USDT again
 
The authors argue that this is Tether/BitFinex themselves, and I think that this is in fact the most likely explanation. But the authors didn't address the alternative possibility of this being a particularly ham-fisted whale who is a close partner of Tether.

#2 Due to end-of-month trading, Tether has probably always been trading with USD deposited with them (fractional-reserve), though at least until March 2017, USDT was probably not complete monopoly money, since they did go to the effort of achieving an end-of-month USD balance.

The authors also tried to argue some other points which I didn't find convincing.

---

I took the paper's data at face value. There were several points where I thought that they could be cherry-picking data, but it's too difficult to check this sort of thing. Cherry-picking / confirmation bias is especially easy to do with block-chain analysis. And I know for a fact that their method of grouping block-chain transactions is not robust in general, though it probably was sufficient for what they did here.

I've thought for a long time that USDT is almost certainly a scam, and this paper makes me think so even more. Though I was actually a little surprised that this provides evidence (via the end-of-month trading) that USDT ever had any real USD.

The paper estimates that if you removed the USDT issuance events which the paper's authors regard as most likely to be BTC price manipulation, the BTC price would be $4100 as of March 31. But that's based on a whole pile of assumptions; I wouldn't give it much credence. I think that the collapse of USDT will be mostly limited to the obvious direct effects (ie. some exchanges would have major troubles, there'd be many people stuck with worthless USDT, etc.), and there would not somehow be a natural "rollback" of any gains which monopoly-money USDT may have driven. Also, the paper makes clear that all major crypto was affected, often much more than BTC, so this isn't any sort of argument against BTC in particular.

New BCH roadmap:

I'm seeing a lot of fake-looking panic everywhere. Bullish IMO.

I wouldn't be surprised if people irrationally freak out about it. I could see the price dropping further once more people hear this news. Though realistically, CXBTF was just made available on US markets about a month ago, and its all-time US trading volume looks to be only something like $5 million, so it's not as if a major player in the market was just removed.

According to some apparent SEC quotes on CoinDesk, it looks like the SEC is annoyed by some language in CXBTF's marketing material, though I can't actually find the source of those quotes.

IMO about $1-2k of the price is built on top of people hoping for an ETF (which would probably quickly put the price well above $10k), so any news that hints for or against quicker ETF approval is likely to have major effects.

I wonder if the recent Core bug will move the market. It might be the worst bug since 2010, though luckily it wasn't actually exploited and is unlikely to cause future trouble.

Knots actually focuses on being less stable / more experimental than Core. Maybe a more stable software fork is needed.

Jihan is reported to have said a few hours ago regarding the BCH fork, "I have no intention to start a hash war with CSW, because if I do (by relocating hash power from btc mining to bch mining), btc price will dump below yearly support; it may even breach $5000. But since CSW is relentless, I am all in to fight till death!" I think he or someone aligned with him dumped on low volume in order to send some kind of message, though I'm not sure what that message is supposed to be: there really shouldn't be much fundamental relationship between hash power and prices except insofar as it causes technical issues (eg. slow blocks -> higher fees), but no BTC issues seem likely here.

That was my thinking as well when I first read it, but it was posted ~3 hours ago, before this crash. It strikes me as too much of a coincidence.

CSW's whole thing is to exploit how people tend to believe that things aren't total lies. So when he says he's Satoshi, people think "Well, I don't believe he's Satoshi, but maybe he knew Satoshi". Or "He failed to destroy BTC with mining power like he said he would last year, but maybe he still actually has a bunch of mining capacity hidden away somewhere." Or "There's no technical way for him to irrecoverably screw with SegWit transactions, but maybe he found some bug somewhere."

But really he's completely full of shit; the vast majority of claims he makes are complete lies from front to back. (And often just a tiny bit of research will make this obvious.)

If there had been significant upward pressure, then we wouldn't have been stuck at ~$6.5k for so long. I predict that ~$5.5k will be "the new $6.5k" for a while, maintaining relative stability with periodic bouncing.

I suspect that we're on a long-term slow downward trend until either the next halving or until something major happens (eg. ETFs, maybe certain global events, etc.).


It doesn't really matter either way. ABC wouldn't have accepted SV blocks even without the checkpoint, so the narrative that it's somehow "cheating" makes no sense, and the checkpoint also doesn't prevent any likely attacks, so it's pointless centralization. These guys still haven't figured out how consensus systems work...

If you don't think that an ETF or similar big boosting event is likely in the next ~year, then that might end up paying off, but personally I wouldn't sell large amounts now. First of all, it'll probably at least touch $6k in the near future. Second, you don't know when an ETF will be approved or the next 2008-style financial crisis will happen, both of which could truly put BTC through the roof. (Insider trading will probably put BTC to $10k+ some time before an ETF is actually approved.) Third, while cryptocurrency will probably not take over the world anytime soon, it's a very real and growing niche which isn't ever going away, and I see no serious competitors to BTC for king of the cryptocurrency space.

It all depends on your risk tolerance and time horizon, though. If there's any BTC price that would ruin you, then it might be a good idea to sell some.

Greg posted a detailed explanation of CSW's most recent fraud: https://bitcoin.stackexchange.com/questions/81115/if-someone-wanted-to-pretend-to-be-satoshi-by-posting-a-fake-signature-to-defrau/81116#81116


True, I've historically erred much more on the side of bearishness. But since I mostly hodl, only speculating with smallish amounts if at all, that means that I'm rarely disappointed, and sometimes happily surprised.

The market activity sure is interesting... Lots of volume.


XRP is a centralized fiat currency sort of like USDT, so you'd expect it to behave differently from real cryptocurrencies.

I won't completely rule anything out, but I suspect that we'll never drop below $2k. While we're likely to touch $3k, I think that anything below $3k is upwardly-unstable.

In the absence of some underlying catastrophe, the absolute floor IMO is $700, which is where we were 1.5 years ago. But many of the gains since then were real & fundamental.

Yeah, I'm not making major purchases now or anything. And I definitely wouldn't mine it if doing so becomes unprofitable (though in fact it seems very profitable right now due to hype). Price-wise, IMO it'll start looking like a good buy if it hasn't been superseded by clones in about a year. I'll be looking for a point of low sentiment at that time. Some people have said that you'll need to wait like 3 years before it escapes from its inflation pit, but keep in mind that Bitcoin's inflation-rate-over-time was roughly the same in its first 4 years; such high initial inflation is why you saw people buying pizzas for 10k BTC like it was nothing. But growth, if it occurs, can overcome even pretty massive inflation.

The tech is just so awesome: a high degree of privacy combined with by far the best decentralization-preserving on-chain scaling tech ever devised, plus several smaller innovations in grin's particular implementation. Even if it was somehow guaranteed to halve in price every year, I'd still consider it cool and want to do something with it.

Ayre has reportedly been involved with CSW since at least Feb 2016. See this lengthy article, though note that it uses info from several highly unreliable sources, so you have to second-guess everything. Apparently, Wright worked in Antigua on gambling websites a long time ago, which is Ayre's residence and line of business, so they probably met directly or indirectly through this.

Wright first publicly made his appearance in the Bitcoin scene in Dec 2015, and apparently he was engaging in the "I'm Satoshi but down on my luck, plz give me a small loan of a million dollars" shtick from at least around mid 2015. The fact that Ayre was involved so early makes me a bit suspicious that he could be in on the con, but it's also possible that he's just fallen for it real deep.

I find Ayre's actions inexplicable. He appeared in this space suddenly, with a thin recent history. He's fixated on statist arguments, but his history makes me think that he should be biased against the state. (CSW has also been talking about this: which one is influencing the other?) He's stuck steadfastly by CSW for 3+ years with nothing obvious to show for it, and probably significant losses. (But is there something we don't know about? Does he somehow stand to profit from the current course of events, where SV & CSW fail in a loud and dragged-out way?)

If anyone has some connection to Ayre through a friend-of-a-friend or something, I'd really like to know what's actually going through his mind.

If that's the case, then that's nice (for us; sad for him), but I haven't been reading him that way. Admittedly, I only started paying him much attention recently.


OMG that's terrible. Hopefully they're able to get out of there safely.

BitFinx responds: https://www.bitfinex.com/posts/356

Confirms that a ton of money is at least "tied up".

LOL. This shitcoin is DOA.

If you're OK with that, then you can use the credit card that you already have and:
 - Get x% back
 - Use your ordinary fiat currency instead of a weird amalgamation
 - Have your payment accepted at pretty much every retailer on earth

There's a huge market for KYC payments, but it's already filled by credit cards etc. I see zero market for Facebook's KYC cryptocurrency: it's the worst of all worlds.

I hadn't been following this closely for a while, but the class action complaint against Tether/BitFinex makes things look pretty bad for them... How important are they to the current ecosystem at this point? How much has the risk of Finex+USDT going the way of MtGox already been priced in?

The complaint doesn't completely convince me that Finex was printing USDT to manipulate prices, though it's certainly possible. I've been skeptical of USDT's backing for a long time. If they weren't manipulating, then the whole matter looks like the US government stole their money and then turned around and said, "Now you're operating at fractional reserve, so you're fraudulent!"

Lots of economic havoc. Everything is down; it's like the opposite of the "everything bubble" which has been happening for the last several years. Stocks are down, which is expected, but GLD, Bitcoin, and even TLT (=long-term treasuries) are also down. Where is the money disappearing off to? Are institutional investors really selling everything and then putting the cash "under their mattresses"?

I was especially surprised by long-term treasury yields. People are saying that the high yields are because the US is about to spend trillions of dollars on the coronavirus response, but I always thought (based on past behavior) that the treasury markets didn't really care about US debt. It'd be interesting if yields went way up -- to several percent --, which would turn this recession into a full-blown debt crisis as well. I don't think the Fed would let it happen, though, and I suspect that their intervention would not be enough to cause hyperinflation or any other short-term disaster, either, this time.

The Fed was already propping up the economy, and now they've turned it up to 11. At some point this is going to cause so much mal-investment & disconnection between the real economy and the financial system that everything really just collapses. It could happen this time, though maybe not: the USD being the global reserve currency strengthens it a lot. I've previously predicted that the collapse would come in a few decades. Regardless, the Fed's actions here very much reinforce my skepticism of the fiat economy in general. I'd much rather own a lot of BTC than participate fully in the Fed's/US's crazy game of Monopoly.

I think that the recession is good for BTC medium-term. People are selling now because people are selling everything now. But 2008 was what motivated the creation of Bitcoin, and the same things are happening now. I could see ATHs this year.