Bitcoin Cracks $5000

[devil21]

Just like I asked during the last run-up, is anyone trying to cash out at these prices? Never got a single affirmative reply last time. I'm genuinely curious how liquid these exchanges really are...or are you hodling something that has a high dollar value but without the liquidity to actually redeem it?

 

[dannno]

Just like I asked during the last run-up, is anyone trying to cash out at these prices? Never got a single affirmative reply last time. I'm genuinely curious how liquid these exchanges really are...

I bought some gold, it worked fine.

 

[devil21]

I bought some gold, it worked fine.

A very wise choice. Doesn't answer my question about cashing out, though.

 

[r3volution 3.0]

I'm genuinely curious how liquid these exchanges really are...

The volatility suggests "not very"

 

[dannno]

The volatility suggests "not very"

Wouldn't it be the opposite?

 

[r3volution 3.0]

Wouldn't it be the opposite?

Less liquid markets tend to be more volatile.

Compare penny stocks and FOREX, for two extremes.

 

[dannno]

Less liquid markets tend to be more volatile.

Compare penny stocks and FOREX, for two extremes.

I'm just trying to reconcile how a market with high volatility, which remains solvent, is lacking liquidity compared to a market that remains relatively constant, and thus does not require the same amount of liquidity to stay solvent as long as the market remains non-volatile.

 

[r3volution 3.0]

I'm just trying to reconcile how a market with high volatility, which remains solvent, is lacking liquidity compared to a market that remains relatively constant, and thus does not require the same amount of liquidity to stay solvent as long as the market remains non-volatile.

I don't know what you mean when you talk about a market being solvent. Solvency applies to firms, not markets.

And I'm not sure that you know what I mean when I say liquidity.

More liquidity doesn't have anything to do with whether the market is rising or falling.

A more liquid markets just means one in which there are more buyers/sellers.

E.G. The NYC car market is more liquid than the Podunk WV car market.

Or the market for oil is more liquid than the market for antique spittoons.

 

[dannno]

I don't know what you mean when you talk about a market being solvent. Solvency applies to firms, not markets.

And I'm not sure that you know what I mean when I say liquidity.

More liquidity doesn't have anything to do with whether the market is rising or falling.

A more liquid markets just means one in which there are more buyers/sellers.

E.G. The NYC car market is more liquid than the Podunk WV car market.

Or the market for oil is more liquid than the market for antique spittoons.

The question that was originally asked was whether you could go to coinbase.com and sell your bitcoin and cash it out when the price is high.

So the question is whether there is enough liquidity for places like coinbase to pay out the cash.

Well, people are buying bitcoin at high prices, with cash, so the cash would then be available to those who cash out.

Typically when bitcoin prices go high, the volume is high. There haven't been any issues with solvency at coinbase and it has made it through a lot of bitcoin volatility.

So I'm not sure why there would be a huge concern.

 

[r3volution 3.0]

The question that was originally asked was whether you could go to coinbase.com and sell your bitcoin and cash it out when the price is high.

So the question is whether there is enough liquidity for places like coinbase to pay out the cash.

Well, people are buying bitcoin at high prices, with cash, so the cash would then be available to those who cash out.

Typically when bitcoin prices go high, the volume is high. There haven't been any issues with solvency at coinbase and it has made it through a lot of bitcoin volatility.

So I'm not sure why there would be a huge concern.

Is coinbase doing the buying/selling themselves, or are they an intermediary between their customers buying/selling to each other?

 

[dannno]

Is coinbase doing the buying/selling themselves, or are they an intermediary between their customers buying/selling to each other?

As far as I know, both.

They have a separate exchange that is just for trading cyrpto called GDAX, and then they have their buying/selling main platform where you can buy crypto with your bank account or sell bitcoin and have it cashed out to your bank account.

 

[r3volution 3.0]

As far as I know, both.

They have a separate exchange that is for trading, and then they have their buying/selling main platform where you can buy bitcoin with your bank account or sell bitcoin and have it cashed out to your bank account.

As far as coinbase's own financial situation, I have no idea.

As for trading on their exchange (or any other), which is what I was talking about, the cash isn't sitting in a vault somewhere.

If I sold you some BTC last month on an exchange, that doesn't mean I'm going to be there to buy tomorrow when you try to sell.

 

[Zippyjuan]

Is coinbase doing the buying/selling themselves, or are they an intermediary between their customers buying/selling to each other?

There was this article from earlier this year (March) : https://www.forbes.com/sites/cbovai...ing-volume-is-fake-says-bitwise/#70329eac6717

95% Of Reported Bitcoin Trading Volume Is Fake, Says Bitwise


While many use CoinMarketCap as a go-to resource for cryptocurrency market data, roughly 95% of bitcoin trading volume reported by this website is fake, according to a Bitwise Asset Management report.

CoinMarketCap reports approximately $6 billion per day in bitcoin trading volume, but the actual figure is $273 million, or roughly 4.5% of the reported amount, according to Bitwise.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

When conducting its analysis, Bitwise culled data from 81 exchanges, which it selected based on reported bitcoin trading volume. Exchanges that reported less than $1 million worth of volume per day were excluded.

Bitwise, which recently proposed a bitcoin exchange-traded fund (ETF), submitted this report to the U.S. Securities and Exchange Commission (SEC) as part of its application process.

"IF true, it's clearly not a positive for the industry," emphasized Tim Enneking, managing director of Digital Capital Management.

However, "most of the largest exchanges appear to have a much lower level of 'fake' volume, so the 95% number is hardly evenly spread across exchanges," he noted.

Enneking outlined several reasons why exchanges would inflate their volumes:

Other than simply wanting to make volume appear larger than it is for commercial reasons (the greater the volume, the easier it is to attract even more traders), three other factors may play into the motivations behind exaggerating volume: (1) the generalized decline in volume over the last 12 months or so, which makes appearing to be larger both more important and more difficult, (2) the growing volume on OTC platforms, which both exacerbates and accelerates the first problem, and (3) the seemingly endless proliferation of new exchanges, meaning that more players are fighting for larger pieces of a shrinking pie.

More at link.

 

[devil21]

I don't know what you mean when you talk about a market being solvent. Solvency applies to firms, not markets.

And I'm not sure that you know what I mean when I say liquidity.

More liquidity doesn't have anything to do with whether the market is rising or falling.

A more liquid markets just means one in which there are more buyers/sellers.

E.G. The NYC car market is more liquid than the Podunk WV car market.

Or the market for oil is more liquid than the market for antique spittoons.

I meant liquidity in the sense of easily receiving cash back out of an exchange/market after selling. Yes, having buyers and sellers is a measure of a liquid market but that assumes the cash is there in the first place to complete the transactions and then cash out. I'm wondering if these exchanges aren't mostly just a way of draining fiat out of the system, since it seems few actually cash back out into fiat.

 

[Zippyjuan]

Bubble popping already? Or just a profit taking pull back? Hit near $14,000 then tumbled to about $11,000. https://finance.yahoo.com/news/bitcoin-almost-wipes-mega-gain-210332829.html

 

[Mordan]

I meant liquidity in the sense of easily receiving cash back out of an exchange/market after selling. Yes, having buyers and sellers is a measure of a liquid market but that assumes the cash is there in the first place to complete the transactions and then cash out. I'm wondering if these exchanges aren't mostly just a way of draining fiat out of the system, since it seems few actually cash back out into fiat.

liquidity depends on the amount being sold. Can China sell all its US bonds instantly? No. Are US bonds liquid? Yes.

At my level, i have cashed out in fiat life changing amounts. Enough for the taxman to come knocking on my door.

I still keep a majority of my networth in Bitcoin. Best saving account ever. You have to hodl, buy the dip and sell small percentages at blown out tops.

So when looking at my currently very humble networth.. Some rich people can afford to splash on easily until 100k usd a bitcoin.

 

[devil21]

liquidity depends on the amount being sold. Can China sell all its US bonds instantly? No. Are US bonds liquid? Yes.

At my level, i have cashed out in fiat life changing amounts. Enough for the taxman to come knocking on my door.

I still keep a majority of my networth in Bitcoin. Best saving account ever. You have to hodl, buy the dip and sell small percentages at blown out tops.

So when looking at my currently very humble networth.. Some rich people can afford to splash on easily until 100k usd a bitcoin.

A few people selling their bitcoins at these high valuations and China cashing out their entire bond holdings at once are hugely different scenarios. In one instance I'm talking about a few hundred thousand maybe and in the other trillion+. I'm asking the question of anyone that, say, bought 50 bitcoin at $300 and has since cashed out 25 at once for $250k. That's the measure of a ponzi scheme. But it's also worth noting that the Chinese bond scenario is a test of a ponzi also. Don't have the cash (digital or otherwise) to fulfill a large redemption? You're running a ponzi.

 

[RonPaulIsGreat]

Just like I asked during the last run-up, is anyone trying to cash out at these prices? Never got a single affirmative reply last time. I'm genuinely curious how liquid these exchanges really are...or are you hodling something that has a high dollar value but without the liquidity to actually redeem it?

I believe I answered you last time, I cashed some out, and depostied into my bank account. This isn't hard to do.

 

[devil21]

I believe I answered you last time, I cashed some out, and depostied into my bank account. This isn't hard to do.

I ask because every time there's a pump and dump in bitcoin, there's suddenly bunches of posts on forums practically begging people to put their money into it. It comes off like there's not actually enough cash in the exchanges for the pumpers to cash out of the pump unless new marks put it in.

 

[Mordan]

I ask because every time there's a pump and dump in bitcoin, there's suddenly bunches of posts on forums practically begging people to put their money into it. It comes off like there's not actually enough cash in the exchanges for the pumpers to cash out of the pump unless new marks put it in.

we ask because that's how we got in the first place. That's how we saw the light.

And we want other people to join the fun in breaking the power of central banks.

Did I complain about people buying at 10 USD when i first bought at 1000 usd?

Smart money knows when to fold.