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Wall Street Banks Are Reportedly Backing Away From Cryptocurrency (siliconangle.com)
Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. While none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed.
From a report: Multiple leading firms had either announced or were rumored to be entering the market earlier in the year, but few have come to fruition. The report said that "while none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed." Notable among those firms was Goldman Sachs. In May it was reported that the company was preparing to launch a bitcoin trading desk that would involve the bank using its own money to trade with clients in a variety of contracts linked to the price of bitcoin.
It was presumed that clients would include hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc. in 2017. Fast forward to December and no such bitcoin trading desk has been launched. In September it was reported that the plan had been abandoned, but a day later Goldman Sachs Chief Financial Officer Martin Chavez denied the report, saying that the bank's "exploration of the digital asset class is an ever-evolving process and is in response to significant client interest." He added that the report was "fake news."
It was presumed that clients would include hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc. in 2017. Fast forward to December and no such bitcoin trading desk has been launched. In September it was reported that the plan had been abandoned, but a day later Goldman Sachs Chief Financial Officer Martin Chavez denied the report, saying that the bank's "exploration of the digital asset class is an ever-evolving process and is in response to significant client interest." He added that the report was "fake news."
Goddamn fucking banks trying to ruin yet another fucking thing with their fucking greed. "Futures contracts" is the biggest fucking scam I've ever fucking heard of.
Bit coins sudden fall was triggered the day the bit coin futures market opened. No surprise. this allowed people to short bit coin (borrow other people's coins, and sell them, planning to buy them back later). So of course with all those sales in the market the price went down massively. And the herd instinct of Bitcoin faith followed, making a pile for the Short sellers. Further confirming this hypthesis is how the price also miraculously stabilized just about exactly one-short-contract duration later.
THe good news is this, while the futures market did create a way for all the shortsellers to take the slack out an overprices situation, overall it's great news. Futures makets provide hedging insurance as well as price arbitrage. This means much better liquidity and the ability of buy without risk (worried the price will collapse? Buy a short option. Worried the price will go up? sell a short option? )
So ironically, now it is finally safe enough for wall street.
Some drink at the fountain of knowledge. Others just gargle.
Banks have government contacts, know how to get laws passed, add some warm bodies to the "compliance" department as the cost of doing business (and keeping the small fry out), and generally do very well within the existing fiat currency system.
They don't really need cryptocurrencies to survive, as long as the existing fiat system stays reasonably functional. Should cryptocurrencies really take off, that'll be the end of checking account banks as we know it, because their customers will no longer need them.
So of course they'll dip in, trying to figure out what the hype is all about. And of course, as soon as they really understand what's what, they'll GTFO, or try to kill cryptocurrencies some other way. They may very well team up with governments for that last bit.
Stop pumping your "investments" with never ending story submissions, msmash.
That is the purpose of short selling: to reduce the effect of market bubbles. If you didn't have short selling you would only have people who cheerlead to make a stock go up. The short sellers are the only ones looking critically at an investment. That is why companies like Enron hate short sellers (they called them "terrorists" https://www.nytimes.com/2006/0...), and Elon Musks hates them too (https://www.wired.com/story/what-are-short-sellers-and-why-does-elon-hate-them/). Only people and companies with something to hide hate short sellers. If a company is healthy and doing the right thing, short sellers can't affect them.
Oddly bit coins fall is partly why it's safer now
It's like when a forest is immolated and then the area is less likely to suffer a catastrophic fire in the near future.
This is a bad analogy though because a forest actually serves a purpose, and charred forest has growth potential.
There's a legitimate reason to be annoyed with short-sellers. Short-sellers have an incentive to exaggerate bad things in a company and blow up little things into big things. Yes, a company trying to hide issues hves reasons to hate short-sellers but others have legitimate concerns also.
Short-selling doesn't help against bubbles. And cheer leaders buying stocks doesn't make the price more invalid, things are worth what people are willing to pay for it. The existance of many Apple fans, means they can charge more for their products, but it doesn't make the price invalid, just a bit overpriced for non-fans. The same applies to stocks. If people are willing to invest it in a company beyond traditional metrics it just make the stocks a worse investment for standard investors, but has nothing to do with a buble. If anything fans products products and stocks against volatility by provding a base consumer base not reacting to traditional business numbers.
.. fans protects products against...
To be able to transfer funds without the need for banks to process the transaction?
Sort of the right idea but you can't ignore the fact that criminals (via stolen coins) and China own about 99.9% of all bitcoins in circulation. THEY are the ones in control of the price and you can't do anything about it.
Um, yes it does. Tesla is a bubble stock. So is Apple as are Amazon. Their stocks would be ever more overvalued if shorts didn't exist. Tech is currently in a bubble right now, but that bubble is popping. The bubble would be much larger. The price of Apple products has nothing to do with stocks. You don't know what you are talking about.
There are no legitimate concerns. The longs have an incentive to do the same to hype a stock up. Ridiculous. Short sellers can be easily disproved, unless their concerns are valid.
This. The GP cites Elon Musk / Tesla, but completely fails to consider the huge amount of overstated negative press that gets thrown around every time Tesla makes even a minor misstep. Tesla is apparently one of the most shorted companies in US history, yet seems to be (mostly) doing the right thing and, when things do look a little marginal, getting themselves out of the fix. Who has the most to gain from this exaggeration, and thus according to Occan's Razor is most likely to be the prime contributor to it? Yep, the short sellers. They have their place, but it's far from as black and white as the GP seems to think.
UNIX? They're not even circumcised! Savages!
It is now official. Wallstreet has confirmed: *BTC is dying
One more crippling bombshell hit the already beleaguered *BTC community when Walstreet confirmed that *BTC market share has dropped yet again, now down to less than a fraction of 1 percent of all servers. Coming on the heels of a recent Netcraft survey which plainly states that *BTC has lost more market share, this news serves to reinforce what we've known all along. *BTC is collapsing in complete disarray, as fittingly exemplified by failing dead last [samag.com] in the recent Sys Admin comprehensive networking test...
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The whales support will support the current price for a while and occasionally come in, maybe even conspire, to raise it for a while. Then more fish will come in and lose. Just Wall St before and during the 1920s. Before the crypto-shills jump yes there's a similar tactic currently in the global securities markets, the Trump/Republican tax cuts used for buy backs to prop up stock valuations. The difference is the global securities markets at their roots are supported by stock dividends and, like fiat and fiat contracts, the guns of the rule of law. Argue among yourselves as to whether there's one law for the rich and one for the poor but Bitcoin now exists only to separate suckers from their cash and burn large amounts of carbon. Blockchain was never going to work with the carbon footprint.
I work in the tech area of one of the large banks.
We have reviewed it many times.
"what does this thing *DO*"
"It holds money"
"Like a bank account"
"we sorta it holds money in a immutable ledger"
"well the immutable ledger is interesting but we already do that as required by law".
To a bank crypto currency is mildly interesting because it involves money. But who do you think owns the fed? It is not the US gov. It is the large banks.
But make no mistake in what I am saying. The banks will wring every cent out of you. They will do it on a scale that will make a botnet blush.
Safe for a bank is about risk. Lets say I put out 100 bucks but can assure I get between 99.99 or 110.00. They will almost assuredly take that bet. Now if that same range is say 0 and 200. They may not take the bet and consider it too risky depending on whatever their excel spreadsheets tell them. BTW dirty little secret of Wall Street? It is run on excel. Thousands of them each with their own 'secret sauce'.
Remember these are the same people who took thousands of underwater loans and put them all together and somehow magically thought that was a good risk.
Remember liquidity comes at a cost. That cost what they call the middle man. Do you really think oil was going for 120 a barrel a few years ago because of physical demand? No it was futures and price manipulation. Once supply caught up to the financial demand the bottom fell out of it. That is how bubbles work.
The banks will use its standard suite of tools on crypto. It is just another currency to the banks. They are already well versed on playing those markets. Just in this case there is a *lot* less regulation.
Facts. Nobody ever bitches about the cheer leaders hyping up a stock. Because it MAKES them money. Fucking hypocrites.
General public understood what bitcoin (or any cryptocurrency) really is: a scam!!!
So, all attempts, using mass media, to re-hype bitcoin is failing (& will keep failing)!!!
So, sooner or later, bitcoin (& all cryptocurrencies) will completely runout greater fools to buy it for any price!!!
HODLers:
Stop lying to yourself & sell ASAP (or endup w/ 0)!!!
STFU you have no idea what you are talking about. Get a life
Yes, and in the land of high frequency trades, stocks just go up up and up. Seriously, the "legitimate" exchanges are all down for the year. So why should the crypto exchanges be an exception to the prevailing bear sentiment?
The red flag is that banks were looking to get into in the first place.
If an entire industry known for doing whatever it takes to fuck over customers wants to go into unregulated territory, anyone who still believes that it will all work out due to some market fairy invisible hand shows themselves to be gullible idiots.
Those who do not learn from commit history are doomed to regress it.
Uhhhhh... With crappy logic like this, why should I not assume someone paid for this article intending to dissuade other buyers while they load up during the dip?
your thin skin doesn't make me a troll
Your ledge isn't immutable. We've got to trust that you aren't changing it.
and no-one trusts banks, as they've proved and over and over again they aren't worthy of it.
and no-one trusts the law these days
and no-one trusts the government not to "legally" alter the ledger by adding more money and giving it to the banks for free.
There are a lot of issues with bitcoin, but the ledger that's mathematically immutable and doesn't require anyone to trust anyone else is a fucking fantastic breakthrough.
I'm guessing he implied the banks own the federal reserve.
A piece of faeces is reportedly backing away from a pooper-scooper.
Requiem for the American Dream
The oil was going for the price it was going because of supply and demand. Price collapsed because supply in the world's biggest oil refining and consuming economy shifted dramatically in last decade, shifting the oil trade routes completely. To the point where people who always paid premium before the shift, like East Asians, actually had a discount in the end, and people who had a discount as primary purchasers stopped buying alltogether.
Just because all you have is a hammer, doesn't mean that all problems are nails. Just because all you know is banking doesn't mean that all trade is about finance shenangans.
Overvalued doesn't mean bubble. If the investors overpaying are fans and not just mistaken. The overevalution is unlikely to burst, and thus the overevalution isn't a bubble (a bubble is an overevalution that bursts)
Sorry, I dont have a belief that to "borrow other people's coins, and sell them, planning to buy them back later" is a good thing when you go on to say that this allows fo price arbitrage and improved liquidity, as it its a good thing.
arbitrage means to take advantage of a temporary irrationality, which is as you basically imply, the introduction of short selling. What caused this? oh right, short selling.
short selling does not contribute to liquidity
If people want to profit off a downturn of a position, they shouldnt be able ot sell something that is not in their posession, furthormore even if it were allowable -- if someone "lets" thier shares be shorted (sold) , they are being SOLD -- and should have tax implications for that.
Really, they should only be able to buy a damned Options Put in order to 'gain' from a downtrend. Otherwise, they are able to create the trend, given enough power (money) backing these short sales.
People dont realize how litle it takes to push the scale down, and its legal manipulation buy the bourgeoisie.
The performance of a company is completely divorced from that company's stock price. Otherwise anyone could programmatically and systematically profit from the market. No... That is not entirely correct... The performance of a company is only one of many minuscule metrics that impact a company's stock price. That is why the stock market is gambling from the perspective of an investor. You are investing in something that you have no control over. This is why real estate is a much better investment. Real estate gives you control over the asset. The success or failure of that asset depends more on what you put into it. But it is more work. But it is counter to the stock market because you are investing your own money but also the bank's money.
Real exchanges that follow SEC rules for securities trading are forbidden from showing the order book, unlike shady, illiquid crypto exchanges (which is all of them).
Your understanding of Arbitrage is thin. It comes up up many more contexts than you imagine. For example, when the prices of a security often makes perfect sense for people who have the average level of risk aversion but no sense for people with higher or lower levels of risk aversion. Arbitrage and hedging can take advantage of this difference in desired risk aversion. No one is losing anything. People who are risk averse welcome lower returns in return for lower risk.
Some drink at the fountain of knowledge. Others just gargle.