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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."
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.
They simply knew there was nothing more to screw up there. ;)
Ezekiel 23:20
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.
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.
.. fans protects products against...
To be able to transfer funds without the need for banks to process the transaction?
"Futures contracts" is the biggest fucking scam I've ever fucking heard of.
Futures contracts help to provide stability, which is something that cryptocurrencies desperately need if they are ever going to be used as money rather than as modern day tulip bulbs.
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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1) Make random stuff up
2) Stick it into a random discussion
3) ???
4) Profit!
Ezekiel 23:20
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.
"Futures contracts" is the biggest fucking scam I've ever fucking heard of.
Futures contracts help to provide stability, which is something that cryptocurrencies desperately need if they are ever going to be used as money rather than as modern day tulip bulbs.
This. ShanghaiBill, once again I am in the rare position of agreeing with you. Peace out.
If it weren't for deadlines, nothing would be late.
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.
And right at the moment, banks are backing away from ALL investments except possibly Yapese stone disks.
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
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.
banks and wall street never liked crypto currencies at all. it is too hard for them to scam investors and wall street is all about scamming investors.
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)
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.