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Yesterdays Latte posted:Hang on, if this bank decides to just liquidate the collateral instead of making the margin call (or just decides not to do it in the first place), that would feed back into itself, right? They'd have to sell the butts at lower and lower prices trying to get rid of them, driving the price down, which will scare more people into selling their butts, forcing the price down lower, and so on. yeah that's why for something like bitcoin you should get liquidated when the notional value is 200% of the loan, so you can take big losses dumping it and still get your money back
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Jun 14, 2022 03:51
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Random Stranger posted:You have to use an extra axis to plot bitcoin since the returns are imaginary. it's a great case to be the lawyers for, akin is going to make bank on this
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Jun 15, 2022 02:23
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CRUSTY MINGE posted:That lawyer better be demanding pre-payment. their fees come ahead of paying creditors in a bankruptcy and celsius has plenty of money to pay them for the years this case will take
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Jun 15, 2022 02:32
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priznat posted:"we did not want to get yelled at for 30 minutes straight" they have real lawyers in place now who basically pulled a gun on him and told him under no circumstances can he make any public statement, at all
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Jun 17, 2022 18:43
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Scratch Monkey posted:Why are all these coins “USDWhatever”? What does USD mean in this context? It's supposed to be worth exactly one dollar
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Jun 21, 2022 13:43
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Star Man posted:Is anyone still treating crypto like a future currency? I feel like that belief is long dead and it's just a rush to get rich or die trying. bitcoin is so obviously not functional as one that nobody really pretends anymore, but a lot of the altcoins pretend that's going to be part of their future value (but they're still actually sold as speculative investments that will go up because in the future someone might do that
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Jun 21, 2022 17:23
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Shofixti posted:This got me wondering: how do non-dividend yielding stocks even have value? The value proposition of a stock as I understand it is that you own a very small portion of the company and are also entitled to some portion of the profits as a result. Stocks are priced in part for the dividends they yield and also future expectations of the company’s performance, which would in turn influence the dividend yield? With a non-dividend stock you’re only hoping for the capital gain when you later sell it. But why should it have value at all if it doesn’t provide anything to the holder? Hope that question makes sense. two basic ways: 1) a stock that does not pay dividends may not pay dividends because it's in "growth mode" - they are retaining earnings and using them to improve the business. the idea is that you will get much bigger dividends in the future once they finish growing. you are valuing the stock based on your assumption of when those dividends will begin, and how much they will be. for example, for a long time microsoft did not pay dividends - but now it does. google doesn't pay dividends but people assume it will someday. 2) a company can get bought out. for example, many tech companies goal in the past few years was not to make profits and return those profits to investors: it was to get bought out by google/facebook/apple/microsoft at a high value. so those companies were more valued by your hope that your share will get converted into cold hard cash google gave you (or, alternatively, some amount of their shares that you can readily convert to cash or receive dividends on whenever google gets around to starting to issue dividends). google, of course, expects to make that money back by using the assets and collecting the profits from that use directly.
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Jun 21, 2022 18:01
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oh i missed option 3: stock buybacks sometimes companies, rather than pay dividends, use their cash to buy back their own stock (iirc this is tax-advantaged, and also stock-boosting-to-help-the-ceo's-stock-options-get-in-the-money-advantaged). this, also, provides a way to use the retained earnings of the company/asset value of the company to convert your equity share into cash in a manner other than selling it to another third party. stock buybacks are basically a disguised dividend, that you can either receive in the form of additional ownership in the company OR conversion of your ownership to cash, but are basically the same thing - a transfer of profit from the company to the shareholders.
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Jun 21, 2022 18:07
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it is critical to understand what underpins an "investment" to understand if it is, in fact, an investment, insurance, or just degenerate gambling. bonds and equities are using your money to fund an enterprise that intends to generate a profit by, basically, creating useful things or supplying useful services. you spend $10 million building a factory, that will generate $1m in profit indefinitely. there is a positive expected value because, on average, capital invested in business generates a profit. bonds and equity differ in the allocation of risk/reward, but you are making money by generating real value in the market. trading in the market is shifting around who owns the rights to those future profits, but you are not trading "against" that counterparty - you are finding someone who prefers future cash more than you do (at the current price for it). futures (commodities trading) and options are negative EV. every dollar you make comes from the other side of the trade. if i buy an option from you, you and i are betting against each other. every dollar i make is a dollar you lost. same for futures: every dollar one side gets, the other side lost. no "value" is created here - it is purely a bet between two people and one side wins. it becomes negative EV because the house takes a cut. the only "value" created is, in essence, insurance. take futures on wheat. a farmer needs to get a certain amount of profit, or they lose their farm (causing additional losses) - wheat prices being too low hurts them by a lot more than just the lost profit. so they want to sell their wheat in a futures market to "lock in" a good price even if that is losing some potential value - because they are shifting the risk of loss to a party less harmed by it. that is the only potential "value" in futures/options markets - hedging against a risk that would cause knock-on effects. similar to how you know fire insurance on your house is negative EV - but if you lose your house and all your possessions your life is going to be wrecked a lot more, so you'll take the loss of $50 per month in EV to avoid the potential effect of being homeless, then losing your job, etc etc etc. buying a commodity for the sake of holding it is basically futures trading, just with way less leverage (which is not nothing, considering it is trivial to lose more than "everything you put in" in futures trading), with the cost of holding the commodity. greater-fool trading is even more negative EV because the underlying asset has no value. beanie babies, or tulips, are eventually going to zero. if you buy them above zero, someone (you, or the next guy) are losing all that money. perhaps you sell it at a gain because you get lucky - but then the next chain of fools is losing even more money. crypto has tried to pretend its "generating value" to fit into the first category, but it's always bullshit. most ICOs are, transparently, pitching the "coin" as essentially equity in the new venture. the issue is every time you dig into their claims there's no there there, and no way of generating value (and, of course, you have the massive deadweight loss of mining draining cash out of the system), it's purely greater fool speculation. evilweasel fucked around with this message at 18:36 on Jun 21, 2022 |
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Jun 21, 2022 18:34
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Cantorsdust posted:Other people are talking about what stocks are and how they differ from crypto because they represent ownership of a real productive asset, but I want to respond to this post as well: it is very, very important not to get c-spamish about this discussion because all it does is confuse the issue. what we're talking about is the generation of surplus value. capital, in this sense, is the investment of goods and labor into an enterprise that will produce goods of greater value than the inputs - classically, "building a factory". who gets that excess value is the political debate. that you can generate greater value is not a political debate: communist countries build factories too, it's just they distribute the created value differently. for something to generate value, it needs to have outputs of more value than the inputs. the inputs for cryptocurrency are expensive electricity. the outputs are waste heat. value is destroyed in this system.
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Jun 21, 2022 18:40
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priznat posted:Isn't the average length of a NFL career like 4 years or something, imaging blowing one entire year on crypto tanking. he's a first round pick so his first four years are guaranteed but he isn't exactly looking like he's getting a whole bunch after that so far
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Jun 21, 2022 21:28
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HappyHippo posted:Meanwhile, BlockFi, which also has 3AC exposure, got a $250 million loan from FTX so they can pretend everything's fine for a while longer: the proceeds of the loan aren't subordinate to anything. they are dollars. what they should be saying (and are not, lawl) is that the debt created by drawing on the revolver is contractually subordinated to "customer" debt and, of course, there are many loopholes built in because if it gets to that point, the attempt to calm the market failed and FTX would like its money back, please
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Jun 22, 2022 17:23
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HappyHippo posted:What I'm trying to say is, if you tell them you think it's a scam, you're just inviting them to try and prove to you that it's not. If you just say "I'm not interested right now for personal reasons that I'd rather not discuss," there's no refuting that. Just kill the conversation. your unwillingness to discuss can, in fact, be refuted by a well-crafted argument of annoying the everliving poo poo out of you until you crack
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Jun 22, 2022 17:37
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HappyHippo posted:Yeah I think they're trying to make people believe the latter, without actually saying it because it would be false. I assume that this means FTX is first. also it is blockfi saying the revolver is "intended to" be subordinate to things is pretty irrelevant because when that issue gets litigated, no court will care they said that if FTX made the misleading statement perhaps you could effectively bind FTX to it notwithstanding the documents (though it would be an uphill battle)
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Jun 22, 2022 17:40
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Scratch Monkey posted:A lot of these crypto bigwigs seem to be from east Asia. Is it just me or is there a reason for that? it's a lot riskier to be from the united states when your business is breaking united states securities and regulatory laws hong kong, singapore, etc are all well enough linked to the global financial network you can do this sort of stuff (compared to, say, mainland china or russia) but also have a lot of friction between a US regulatory agency getting mad at you and something happening to you
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Jun 27, 2022 17:53
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The Pirate Captain posted:Someone posted an article about people short selling Tether a few days ago, question for people who understand finance: would it be possible to lose money doing that? As a stable coin, it’s basically impossible for it to go over $1, but as we’ve seen they can go quite a bit lower. Worst case scenario you’d have to buy it back for $1, which would be the same price you shorted it. There would be fees associated with the short presumably, but if you do a large enough volume it should be easy to make money even if the value only fluctuates by fractions of a penny. From historical charts it seems to fluctuate with the $.99-$1 range all the time, so even if you’re only making $.0025 per, that can add up real quick if you put in millions. And you can repeat it multiple times a day, whenever the value is at a solid $1. the only way you make serious money on this is using enormous, enormous leverage to magnify your .0025 cent gains into something significant - which magnifies your losses by the same amount it is not impossible for it to go above $1, if there is excess demand. it won't go hugely above 1 - but it can go slightly above 1. and you know who can make it do that? the exchange, working with whales they shared your short and what it takes to liquidate you at with, because everyone in crypto is long crypto so doing anything to short crypto in the crypto ecosystem is a hugely bad idea
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Jun 28, 2022 15:52
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The Pirate Captain posted:But you can buy shorts that don’t call for like 3 weeks or more. There’s no way an exchange could keep the value above $1 for any serious amount of time even with the whales, and all it would take is a single fluctuation below $1 for your auto traders to liquidate. thats not how it works if i short a million tethers, let's say i pay a cent per tether: i pay $10,000. but remember: I owe a million tethers to someone, and that someone wants to make sure i am good for it. so i must also put up margin: collateral, proving i have the funds to go repay you the million tethers. so i need to put up a million dollars (for the tethers) plus some additional security - let's just say it's another penny. so, $10,000. I put up $1.01 million. this is because, hey, maybe at the three week mark tether is at 1.01 so you need more money to buy back the million tethers. but if, during those three weeks, tether goes to 1.01 - i have to put up additional margin because the lender is no longer protected against the price going up another cent. you get liquidated because you don't have enough margin. so the exchange tells a whale "hey, spike the price to 1.02 and we liquidate this guy and seize his $10k". or they just do it themselves with fake trades, and take your money.
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Jun 28, 2022 16:00
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The Pirate Captain posted:I thought you could liquidate a short at any point before the call. So if I have $10mil in the bank and want to short $5mil tether it wouldn’t matter if the price goes up to $1.02 at some point because I have more than enough collateral for that. And hey, if they do manage to get it up that high somehow, I could put another few mill into it at that price and make an easy 2% when it drops back to $1. Or if I’m being even more clever, put in 1 mil originally, wait for the whales to spike the price up to $1.01 to try to spite me, then put in 8 mil at that price. I’ve kept $1mil in reserve to cover any margins. Then you've posted two million dollars with a sketchy-rear end exchange to make $10k. Also note that if the value never fluctuates far enough below what you need for a real profit you lost whatever you spent to borrow the tethers.
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Jun 28, 2022 17:57
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Ups_rail posted:Also why would institutions wanna buy bitcoin? I mean isnt just good for buying drugs and illegal poo poo. here is one of the most terrifying things about finance you think “its hundreds of millions of dollars, there must be teams of highly qualified people thinking through every aspect of it” nope its a guy, wired on coffee and potentially cocaine, who didn’t sleep last night and really doesn’t care about anything other than his next bonus every time i look under the hood at a finance company I’m terrified which makes finance, but dumber, wrap around to comedy
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Jul 2, 2022 14:14
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notwithoutmyanus posted:I see plenty that target random people even discussing crypto and pointing out like 700% in 4 weeks on trading bots. which is explicit scams and fraud. Like poo poo, in my heyday I made 3% a day on bots for a month and that was insane (and not sustainable, and also pure luck of circumtance). Today, I like much more sanity settling for well under 1% a day that I can sleep on. I, too, will settle for a mere sub-365% return per year. Or maybe not given that I didn't bother to do the math on 1% daily compounding instead of additive.
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Jul 2, 2022 16:51
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Squiggle posted:Is that uh...how bankruptcy normally works? it is common when the old board is going to get sued to hell and back, so they want to appoint the people in charge of doing that
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Jul 6, 2022 20:19
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notwithoutmyanus posted:I know how this goes. When the crypto exchange I was working for went under, this was the kind of people they appointed as CEO's whose goal was basically dismantle the company. these are the people who get appointed when previous management completely hosed the company and want to make sure that the report that says they didn't do anything wrong has the stamp of approval of an "independent" they don't get appointed until you're already measuring for the coffin
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Jul 6, 2022 20:37
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latinotwink1997 posted:No, I mean, why the hell would they short the drat thing when it was worth fractions of a penny at that point? That seems dumb as hell. because there were trillions of it in circulation so you could multiply those fractions of a penny by a trillion
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Jul 11, 2022 16:31
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notwithoutmyanus posted:Voyager today: hey look, just because "they refused to pay" and "they lost all their money in an obvious ponzi scheme" and "the founders have gone on the run" and "if there was anything left the founders took it" doesn't mean there's not some blood to get from that stone
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Jul 11, 2022 20:27
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There Bias Two posted:What insane logic are they using to claim that mining is contributing to the power grid? they paid power plants a lot of money, so those power plants were incentived to expand! the same market incentives that, supposedly, encourage texas power plants to winterize their plants
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Jul 11, 2022 22:12
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HappyHippo posted:I don't touch the poop so I can't be sure, but from my understanding you can (could lol) in fact hold regular USD in your account at Voyager, either after you fund it by putting money in, or after you sell stuff. That money was insured in the event of MCB's failure (but, crucially, not Voyager's). They've got $350m of cash in the account so obviously somehow you could hold cash there in relatively large amounts.
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Jul 12, 2022 00:16
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Scratch Monkey posted:Don't worry. Celcius is not a BIG MEAN BANK so it's cool that once they take my deposit it literally becomes theirs to do with what they want The info makes clear it's a two billion dollar hole once you zero out the value of their unnneded cel tokens and depreciate the mining op. And that's a two billion hole against a lot less customer debt than I thought making it a bigger percentage shortfall. evilweasel fucked around with this message at 22:34 on Jul 14, 2022 |
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Jul 14, 2022 22:31
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PITY BONER posted:In my opinion (and conjecture based on the history of crypto), the price is being artificially pumped to bounce and stay in its current range for three simple reasons: i had a meeting with someone involved in crypto who was straight-facedly saying that "people are saying this is the last good buying opportunity in crypto for a decade" and he wasn't even really trying to sell us on crypto do not underestimate the degree to which people involved still believe
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Jul 16, 2022 17:54
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PITY BONER posted:I am having a little difficulty trying to understand how stupid this all is, and the fact that it was designed that way on purpose by real humans who thought they were making next-level tech. Also to close the door it costs $200
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Jul 17, 2022 02:57
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re: ponzi scheme it is correct that in a ponzi scheme the estate often goes after net winners: the theory being that the payments are an intentional fraudulent transfer - it is presumed every payment made in a ponzi scheme is an intentional fraudulent transfer. i suspect that in celsius that would get limited to a subset of high-value winners as long as it stays in chapter 11 (and, anyone closely linked to the company_. if it collapses into a chapter 7 liquidation the trustee will go after a broader set of people who withdrew. i don't know the hole in celsius is big enough it's worth going after just people who got their principal back and making them share the loss too, but i would think that's a bridge too far in either event. i also don't recall exactly where the ponzi scheme presumption applies - it seems likely celsius was both (a) trying, and failing miserably, to turn a profit on the investments; and (b) the interest on withdrawing depositors was paid from later depositors. i don't know if that officially constitutes one or not of the top of my head. evilweasel fucked around with this message at 02:04 on Jul 18, 2022 |
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Jul 18, 2022 02:00
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kw0134 posted:Also posing the question as it originally phrased is wrongly binary, because you can't predict what precisely the peak will be you'll take your profit along the way so that you're realizing gains and reducing your risk (and your profits, to be sure) but you'll still capture a good portion of the value of the move by sizing down as it gets higher. The choice is not "sell everything at an unpredictable peak" and "never sell and ruin your life". the real thing to realize is that money has diminishing marginal utility. if you're sitting on $45 million of paper gains while you are, uh, not previously a multi-millionare, the change in your life from selling now, right now, sell it now is way, way more than the change from that point to you having $90 million instead. your losses will hurt more than your gains. of course its going to be hard as hell to pull your money out at that point but you've got to realize that at that point more money is basically a high score but less money has a real impact on your life. well, less money after a certain point, you're probably fine with losing a million or two at that point.
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Jul 22, 2022 14:57
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Deep Glove Bruno posted:i know this is broken record territory but how does someone who can dress themselves and go potty believe that an NFT of a physical object has anything to do with the physical loving object? this is psychosis drugs, and lots of them
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Jul 27, 2022 12:48
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Cyrano4747 posted:Because people have to churn worthless calculations to authenticate the blockchain (which mining is part of), which means that the rewards have to at least match the price of electricity. If the miners aren't at least breaking even over the long term they start pulling back, which jerks around the difficulty of the mining, making it more profitable for the ones that remain. You are correct that price and difficulty are going to be correlated. You are getting the correlation backwards, however. At any given difficulty, there's a marginal cost per coin - and if there's a big difference between the two, that will lead to adding or subtracting mining hardware so that the difficulty changes until the marginal cost of mining a new coin is roughly the same as the current price. So the changes in price should lead changes in difficulty (and not the other way around).
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Aug 25, 2022 14:53
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Somfin posted:Okay, as the idiot who brought that up, I feel like I must not understand something here; wouldn't a miner expect the price of BTC to cover the cost of mining it? Would that not result in some form of a "minimum" sale price for those coins in aggregate? lots of people expect to win the lottery. that doesn’t affect anything either.
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Aug 26, 2022 04:09
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VitalSigns posted:This is probably a question for divabot, but isn't that limit arbitrary? It's just a hard-coded number someone picked because you need some target to set the difficulty of the number-guessing game, and Bitcoin was just a proof of concept running on a few computers. Why not pick a higher number now that there's gazillions of processors guessing numbers. No, it has to do with the block size not the difficulty. The difficulty has nothing at all to do with the tps.
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Aug 26, 2022 22:48
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abigserve posted:lol didn't like 20 people freeze to death last winter due to lack of power to be fair that wasn't because the texas power grid was overloaded it was because texas, in its infinite stupidity, created a power grid that rewards operators when enough power generators fall offline, so all of the power plant owners have winterized exactly half their plants so one fails, so the other one makes approximately 300x the profit, when it gets cold. that few days with the power grid failing was more profitable for the power companies than the rest of the year combined. also texas has severed any inter-state power grid connections to keep THE FEDS from regulating their power grid so they can't even go hat in hand to such more competent states as mississippi and oklahoma and beg "please sir, my i have some electricity"
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Aug 30, 2022 14:52
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the fact that texas' power grid cannot handle high temperatures (lol) is, however, due to bitcoin mining among other things
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Aug 30, 2022 14:56
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MarcusSA posted:I’d kinda like to read the court ruling behind this. the general rule is if you're given money by mistake you have to give it back there are certain exceptions. from the description you gave, it sounds like the person properly notified the bank of the error and then they didn't do anything, and it was that specifically that created the exception. there is also an exception if you are a very large, very stupid bank and accidentally paid $900 million of debt you administer with your own money
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Aug 30, 2022 20:35
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PhazonLink posted:unless your own enough stock to have a decent influence on the board or the ceo, prez whatever this is kinda lol. if you own all the stocks in the world all companies are private. they're yours.
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Sep 5, 2022 00:58
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Neito posted:Proof of Stake works differently: rather than trying to guess a number, you tell the network "I'm willing to burn X eth", meaning they get pulled completely from circulation and can never be used again for anything else; in exchange, you get an X/eth_pool_size chance of being the validator for a block and therefore being awarded the newly generated eth. this isn't quite correct. you can unstake your currency. but if you "cheat" while staking, the protocol (in theory) penalizes you by taking your currency.
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Sep 12, 2022 20:02
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