Key Post How to bet on Bitcoin falling

tecate

Frequent Poster
Messages
563
I own an exchange that is ranked 20th in terms of business.
So I put through a whole pile of matched deals so that I rise to no. 10 in the league.

Why would that inflate the price of Bitcoin though?
I do understand that I am trying to apply logic to a completely irrational business but is there any reasonable explanation for it?
There's always rationale when it comes to making money (whether through sharp practice or professional/ethical practice). They want to inflate the volume figures. To do this, they were pinging trades back and forth. Just volume - that has nothing to do with boosting the price of BTC.
 

Gus1970

Frequent Poster
Messages
143
Thanks Leo

But let me get this straight.

I own an exchange that is ranked 20th in terms of business.
So I put through a whole pile of matched deals so that I rise to no. 10 in the league.

Why would that inflate the price of Bitcoin though?
I do understand that I am trying to apply logic to a completely irrational business but is there any reasonable explanation for it?

Brendan
Do you consider the other regular markets, rationale? Which way do they demonstrate their characteristic of rational/irrational in your opinion?
 

Leo

Moderator
Messages
10,247
I own an exchange that is ranked 20th in terms of business.
So I put through a whole pile of matched deals so that I rise to no. 10 in the league.

Why would that inflate the price of Bitcoin though?
It doesn't directly impact the price, though it may indirectly through perceived greater uptake of cryptos than is the case in reality.

Some of these exchanges charge up to $3M to list a crypto (CoinBene lists just shy of 60 of them), so there's quite an incentive there if you can pull it off.
 

Brendan Burgess

Founder
Messages
38,094
Do you consider the other regular markets, rational?
Good question.

Other markets are fundamentally rational with long periods of irrational exuberance and irrational pessimism. So we know that CRH shares are worth something. They generate a steady dividend income. Let's say the true worth is €x. The market may well price them at 2x or 0.5x. If they issue a price warning today, the price will fall. If they issue better than expected results, the price will rise.

Bitcoin is worth nothing, yet it has a price of $12,000. That is completely irrational. I often make the mistake of trying to understand something irrational with the rules of reason. Bitcoin is worth nothing but the price is $12,000. As reason doesn't apply, then it might as well be price at $1,200 or $120,000, which is why I have a stop in place. Eventually the price will match its value - zero. We can't predict the timescale or the path, but we do know the destination.

Usually when the price of a share like CRH rises or falls, there is a reason for it - a reduction in interest rates, a profits warning, a new roads programme in America. But with Bitcoin, there doesn't seem to be any reason to explain why it was priced at nearly $20,000 at one point, and then just over $3,000 a year later and now $12,000 another year later.

Brendan
 

Gus1970

Frequent Poster
Messages
143
Good question.

Other markets are fundamentally rational with long periods of irrational exuberance and irrational pessimism. So we know that CRH shares are worth something. They generate a steady dividend income. Let's say the true worth is €x. The market may well price them at 2x or 0.5x. If they issue a price warning today, the price will fall. If they issue bitter than expected results, the price will rise.
What’s your definition of rational? What you say above can be easily said about bitcoin. CRH shares are worth something, bitcoin is worth something, as easily deductable from the market. Assuming you can read a chart?
Are bearn sterns shares worth much lately?
How about Lehman Brothers?

Keeping on repeating that bitcoin is worth nothing is not going to make it true, regardless of how many times you say it.

It is your opinion, and i respect it as such, imagine a world where everybody’s opinion is equally respected, you might say i’m a dreamer, but i’m not the only one

Gus
 

Brendan Burgess

Founder
Messages
38,094
Whether I can read a chart or not doesn't matter. Bitcoin is worth nothing. The chart shows its price, not its value.

CRH is worth something because of the expected flow of dividends. You might expect more than I , so you would put a higher price on it than I would. That is perfectly rational.

Saying Bitcoin is worth $20,000 because you expect some Greater Fool to pay you $40,000 in a year's time is very dangerous gambling. I don't see gambling as rational. It's emotional.

Brendan
 

Gus1970

Frequent Poster
Messages
143
Whether I can read a chart or not doesn't matter. Bitcoin is worth nothing. The chart shows its price, not its value.

CRH is worth something because of the expected flow of dividends. You might expect more than I , so you would put a higher price on it than I would. That is perfectly rational.

Saying Bitcoin is worth $20,000 because you expect some Greater Fool to pay you $40,000 in a year's time is very dangerous gambling. I don't see gambling as rational. It's emotional.

Brendan
I take onboard that you have no interest if a respectful dialogue and prefer proclaiming unsubstantiated slogans, i’ll leave you to it.

I’m not young enough to know everything.
I know that i don’t know.

Peace and Love

Gus
 
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