Is crypto currency the largest financial fraud ever?

[PoS]

You made a relevant argument?

Compared to yours, yes I did.

 

[Yes_Minister]

Compared to yours, yes I did.

I commented that your comments did not age well, you are tried to make some comment/joke about Canadian maple syrup. You are bad at taking ownership of past mistakes and bad at comedy.

 

[craig]

We are about to see if the celebrated crypto transaction logging will show where the money went.

 

[SMTA]

You made a relevant argument?

That’s never happened and never will.

 

[yankintx]

The almost 30% drop in crypto currency investments over the last month prompted me to do some research and I found this article:

Cryptocurrency Is a Giant Ponzi Scheme

Cryptocurrency is not merely a bad investment or speculative bubble. It’s worse than that: it’s a full-on fraud.

jacobinmag.com

As a former software engineer the discussion of the technology seems accurate but my layman's knowledge of finance does not allow me to judge that aspect of the article though it appears to be dangerous to our financial system. China and India have virtually banned crypto currencies and perhaps for good reason. Can anyone else provide incite.

Like ‘The 1929 Crash’—New Crypto Winter Warning As Sell-Off Wipes $1.5 Trillion From The Combined Bitcoin, Ethereum, Solana, BNB, Cardano And XRP Price

A new "crypto winter" could be around the corner after a huge crypto price crash has wiped $1.5 trillion from the combined cryptocurrency market—hitting bitcoin, ethereum, BNB, solana, cardano and XRP hard...

www.forbes.com

Crypto is crashing—and experts predict more pain ahead

Stalwart coins like Bitcoin have shed over 40% in recent months.

fortune.com

I would say yes

It's speculation of the highest order based on a fake currency.


Rubes

 

[PoS]

I commented that your comments did not age well, you are tried to make some comment/joke about Canadian maple syrup. You are bad at taking ownership of past mistakes and bad at comedy.

How did my comments not age well? Did everyone stop investing in crypto? Prove it.

 

[Stealers Wheel]

I'm no financial expert, but honestly there's not a significant difference between cryptocurrency and physical money. That's something we could all adjust to.

I'm told it's the underlying blockchain technology that is going to change our lives, because it provides a universally verifiable history of ownership (of anything it is applied to.)

I worked in the financial industry a bit, and I can confirm that all over the world there are offices full of people whose job it is to verify ownership of houses and cars and everything else we've got.

This technology potentially replaces all of them, and any jerk with a cell phone will be able to 100% verify the ownership history of anything in the system.

Well, of course! And it will be backed by the full faith and credit of the United States of America, just like dollar bills are today./s

Look at a bill in your pocket. It says right on the bill "This note is legal tender for all debts, public and private." That means that if someone owes you money, you have to accept the U.S. dollars as payment of the debt. Otherwise, you cannot seek legal redress for the debtor defaulting. Go ahead, tell your debtor you demand payment in crypto coin. He can tell you to pound sand. Take him to court. Find a judge who will find in your favor and tell the debtor they must pay in crypto. It ain't gonna happen.

 

[Yes_Minister]

How did my comments not age well? Did everyone stop investing in crypto? Prove it.

Does everyone have to stop investing in crypto for its market to collapse? The biggest crypto company just collapsed and this whole thing looks like a ponzi scheme. You might as well go to Vegas and put everything on black rather than invest in crypto.

 

[PoS]

Does everyone have to stop investing in crypto for its market to collapse? The biggest crypto company just collapsed and this whole thing looks like a ponzi scheme. You might as well go to Vegas and put everything on black rather than invest in crypto.

If the crypto market has collapsed as you claim, then why are so many people still in crypto? Explain that.

 

[Higgins86]

If the crypto market has collapsed as you claim, then why are so many people still in crypto? Explain that.

Same reason casinos in Vegas are still full

 

[Deuce]

I'm confused by this. I can think of no instance where selling a stock was problematic. I clicked "sell," and bam, sold.

Because someone was buying it. You don't sell stocks to the ether.

 

[Cardinal]

Because someone was buying it. You don't sell stocks to the ether.

Who's buying it? Yes, I'm aware of how dumb I look by asking this. This is really not my lane.

 

[Deuce]

Who's buying it? Yes, I'm aware of how dumb I look by asking this. This is really not my lane.

I mean I can't tell you specifically which person or entity bought your stock. There's a lot of different ways this happens but at the end of the day some other entity has to buy your stock. It could be some big financial institution, could be some random day trader, could be some other person using the Robinhood app.

 

[Cardinal]

I mean I can't tell you specifically which person or entity bought your stock. There's a lot of different ways this happens but at the end of the day some other entity has to buy your stock. It could be some big financial institution, could be some random day trader, could be some other person using the Robinhood app.

Well, that's what I'm trying to figure out. When a stock plummets and goes from, say...300 to 1, who's saying, "Yeah, I'll buy that failing stock"?

 

[Deuce]

Well, that's what I'm trying to figure out. When a stock plummets and goes from, say...300 to 1, who's saying, "Yeah, I'll buy that failing stock"?

Often it is dropping that fast because nobody really is buying it. Someone tries to sell at 300, but cant because there's no buyer. The price is lowered until it either dips below a value the seller was willing to take or someone buys it. Oh look here was someone who had a buy order at 1 dollar, so now the sale goes through and the market price is 1 dollar.

 

[Mithros]

Who's buying it? Yes, I'm aware of how dumb I look by asking this. This is really not my lane.

I think this is a fair question.. and I don't think it's very obvious.

My understanding for retail investors going through a broker is that the buying and selling is kind of virtual. The broker takes your money, and credits your account with the asset. You pay more than you would on the open market The brokerage keeps both cash on hand plus a portfolio of stocks. So if you sell stock A and then someone buys stock A three days later, the broker doesn't have to do anything but collect the trading fees. So based on what their clients hold they reallocate their internal holdings. I'd assume they can also borrow stocks from other brokers if they don't have the stocks on hand.

So small retail investors are essentially buying and selling directly to the broker. Large trades mean buyers need to find sellers in an auctioning process on an exchange. That's like the pit where everyone is screaming with paper and . I'd assume very large trades are more like business deals. I doubt Elon just put 3 billion in Tesla on the auction block and left it up to fate.

In crypto the exchanges are the brokers and the blockchain is the exchange. The retail investors buy and sell directly to the exchange (like FTX, or Binance). The exchanges are supposed to then buy and sell so that their books match their customers. Obv not all of them do that. On the plus side for them, their "assets" are essentially worthless, the exchanges all collaborate to set prices, and they can also be magic assets into existence to cover any balance hole. As long as more investment money is coming in than going out the rest is "profit". In a non fraudulent bushiness, when more people are selling than buying they could just let the price of the stock fall. But crypto is a leveraged pyramid scheme built on leverage pyramid schemes. If the price craters, then people withdraw.. if they withdraw then new money dries up. If new money dries up then they can't pay their obligations. So they have to continue to add layers of leverage and ponzi to keep the grift running.

At least this is my understanding.

 

[uptower]

Most of it appears to be financial trickery of some sort, requiring buy in to have any value. A Ponzi scheme of sorts where earlier investors are paid by later ones. The various brands of crypto out there are just variations trying to jump on the wagon.

But I will say I wish I'd believed in Bitcoin back in '08 and bought just a hundred bucks worth. I thought it would go nowhere when it first came out.

 

[multivita-man]

What a cracker of an interview this turned out to be"

Binance/CZ: "We want to be transparent. We want to set the golden standard for reliability...solidness in this space."

Becky Quick of CNBC: Well then do it.

Binance/CZ: "We're financially okay"

Becky Quick (paraphrasing): Including if someone came along and wanted their $2 billion back? lol

Binance: We'll let the lawyers handle it.

Becky Quick (not paraphrasing) literally rolls her eyes and looks away from the camera as if to say GMAFB!

Aaron Sorkin: This far, you haven't disclosed your liabilities, and I'm wondering...why that is...and whether you will.

Binance/CZ: "We are working with firms to audit financial liabilities...Audits don't reveal every problem."

Beck Quick: Well an auditor from a big four would reveal that. If you could get a big four auditor to say that...

Binance/CZ: "Actually many of them don't know how to audit crypto exchanges" lolol

Yeah, this isn't another FTX Ponzi scheme crash in the making. lololololol

 

[multivita-man]

Most of it appears to be financial trickery of some sort, requiring buy in to have any value. A Ponzi scheme of sorts where earlier investors are paid by later ones. The various brands of crypto out there are just variations trying to jump on the wagon.

But I will say I wish I'd believed in Bitcoin back in '08 and bought just a hundred bucks worth. I thought it would go nowhere when it first came out.

They literally just invented a financial product and got people to believe in it. And as long as there are enough people who believe in fake investment products, I guess some of the money that follows ain't fake.

 

[multivita-man]

Well, that's what I'm trying to figure out. When a stock plummets and goes from, say...300 to 1, who's saying, "Yeah, I'll buy that failing stock"?

A lot of buying/selling these days is automated. People set their ceilings and floors. People pick a sell or buy date. The stock trips one of those (or another) trigger, and bam, deals are done. It's the democratization of markets that makes the vast majority of trading a non-event, even on a day when there's heavy selling. It's only when the stock markets (or if you're an unlucky individual investor, a specific stock or group of stocks) begins to shake and rattle violently that you might run into a problem. But even in the case of wild market drops, there are triggers that can suspend selling, and if things are really, really bad, they can just shut the shop for a day until cooler heads prevail. IIRC, some of these mechanisms were put into place after the 1987 meltdown.

 

[multivita-man]

If the crypto market has collapsed as you claim, then why are so many people still in crypto? Explain that.

I think much of it can be chalked up to hopium. Big money investors like Cathie Wood are a prime example. She got rich during the pandemic by making big bets on a rather narrow class of investments, one of which was crypto. She's lost a shit ton of money for the clients who bought into her ETFs during their peak. Obviously, they don't want to sell at a massive loss, so they're following the conventional wisdom that says, wait for sunnier day and hope that the price goes up again. I would say that for some of the investments in her portfolio, sure, some of those individual stocks will recover, but some won't -- some will actually get worse.

Amazon, Apple, Nividia and other tech stocks have all cratered during the last year, but we've already covered why BTC is different. Will it go all the way to 0? Probably not. Could it eventually get to a point where the price stabilizes? Probably so. The question then is, what is the floor? What is a stable BTC price? It's probably not $18,000 - not when we've not even had a recession yet. Because trust me, when the recession actually comes ashore, people are going to want cash. As in liquidity. BTC isn't liquid. No matter how much lipstick we try to put on that poor pig's mouth.

 

[PoS]

I think much of it can be chalked up to hopium. Big money investors like Cathie Wood are a prime example. She got rich during the pandemic by making big bets on a rather narrow class of investments, one of which was crypto. She's lost a shit ton of money for the clients who bought into her ETFs during their peak. Obviously, they don't want to sell at a massive loss, so they're following the conventional wisdom that says, wait for sunnier day and hope that the price goes up again. I would say that for some of the investments in her portfolio, sure, some of those individual stocks will recover, but some won't -- some will actually get worse.

Amazon, Apple, Nividia and other tech stocks have all cratered during the last year, but we've already covered why BTC is different. Will it go all the way to 0? Probably not. Could it eventually get to a point where the price stabilizes? Probably so. The question then is, what is the floor? What is a stable BTC price? It's probably not $18,000 - not when we've not even had a recession yet. Because trust me, when the recession actually comes ashore, people are going to want cash. As in liquidity. BTC isn't liquid. No matter how much lipstick we try to put on that poor pig's mouth.

Bitcoin is very liquid, moreso than most other forms of investment. The one thing to remember is that there are other volatile investment instruments besides crypto, such as derivatives and pink sheets, and their regulations are pretty lax or nonexistent as well.

 

[rhinefire]

It is one thing to have movie stars selling products but another telling viewers how to invest their money. Crypto investors must spend millions on lottery tickets as well with the results being the same. No sympathy The punchline is no one knew what the product was!!

 

[multivita-man]

Bitcoin is very liquid, moreso than most other forms of investment.

I would never argue that other investments are necessarily liquid; I'm arguing that BTC isn't an investment. It's basically a game - like Draft Kings. If you win, great, but just know what it is before you buy the dip.

The one thing to remember is that there are other volatile investment instruments besides crypto, such as derivatives and pink sheets, and their regulations are pretty lax or nonexistent as well.

True, but BTC has the particular distinction of being popular with risk that is widely misunderstood or not accounted for. In the end, it's the Bitcoiner's money, so I don't care either way. People play fantasy football, buy lottery tickets, and pull slots at a casino - and some win money that's very real. I think BTC's the same. I do not put it in the category of other investments, though. That's all I'm sayin.

That being said, like one of the posters said earlier, if you were one of the original believers, you could pull your money out now (assuming it's not stolen or permanently lost by some unscrupulous exchange) and come out smelling like a rose. Problem is, if enough people have the same thought at the same time, well, that's a bank run. That doesn't usually end well.

 

[Mithros]

I would never argue that other investments are necessarily liquid; I'm arguing that BTC isn't an investment. It's basically a game - like Draft Kings. If you win, great, but just know what it is before you buy the dip.



True, but BTC has the particular distinction of being popular with risk that is widely misunderstood or not accounted for. In the end, it's the Bitcoiner's money, so I don't care either way. People play fantasy football, buy lottery tickets, and pull slots at a casino - and some win money that's very real. I think BTC's the same. I do not put it in the category of other investments, though. That's all I'm sayin.

That being said, like one of the posters said earlier, if you were one of the original believers, you could pull your money out now (assuming it's not stolen or permanently lost by some unscrupulous exchange) and come out smelling like a rose. Problem is, if enough people have the same thought at the same time, well, that's a bank run. That doesn't usually end well.

There’s an important caveat here. Crypto runs on crypto exchanges. Dollars run through banks. Crypto to crypto exchanges can be done on the chain, but crypto for cash requires an transaction on the chain and one using real banks.

So how much money is there if people were to try and sell (and the exchanges didn’t freeze accounts like genesis has done for the last month).

How much money is there if a run were happen? The two sources of value are exchange reserves and stable coin reserves. Crypto investments in crypto is just part of the Ponzi scheme. Binance looks to have less than 2.4 Billion. I doubt the other exchanges have more. Most of the real value is in stable coins. Circle has 43 B, USDC has 6 of 22, Tether is a fraudulent house of cards. To be generous let’s say there’s 60B in real assets backing crypto.

The market cap for crypto is over 800 Billion so at most crypto investors will get less than 10% on the dollar, far less when we subtract the liabilities backed by stable coins not included in crypto market cap.

One of these stablecoins is not like the others...

A look at the reserves backing the three largest stablecoins in the crypto-conomy.

dirtybubblemedia.substack.com