Bitcoin

Kevin Richardson posted:

Excellent summary... we should probably just delete the first 6 pages of this thread and start with your comments.

Perhaps your title for the thread should have been:

"I'm totally stoked on Bitcoin - yet seeking reassurance"

Guys, there is more to Bitcoin and block chain rather than simply speculative investing/gambling yet that seems to be the majority discussion on this thread... true the recent explosion of interest and new money purchase of cryptos I suspect is mostly from those wanting to get wealthy quick and fear of missing out mentality. and yes I suspect values will rise significantly again in 2018. However I suspect if that is your only motivation with no understanding of the tech and how it is evolving. I feel that is not entirely healthy and could end in tears...... and if it is your motivation, and after all I do enjoy a day at the races as well, please only purchase what you are willing to write off.

Despite what I stated above... my little ‘gambling investments’ have rocketed.... there is now the issue of capital gains if you want to cash out... so you might find the following useful https://www.gov.uk/government/...her-cryptocurrencies

The only bit I don’t understand, and feedback here might be useful before I seek professional advice... if an investment is seen as highly speculative/gambling to which cryptos are generally considered, then no CG tax is due (or tax relief) .. so how does one determine .. the HMRC brief gives both options......

Hi Simon. In the US, Bitcoin profits are taxed just like any other capital gains - at higher short term rates if held less than year. No loophole for high level of speculation/gambling. Will be interested to hear what you find out, but would be very surprised if HMG doesn’t want her share of your profits!

Thanks Hook

I see Venezuela is to introduce the "Petro", a crypto-currency. 

winkyincanada posted:

I see Venezuela is to introduce the "Petro", a crypto-currency. 

A government backed cryptocurrency.... hmmmm....

Kevin Richardson posted:

winkyincanada posted:

I see Venezuela is to introduce the "Petro", a crypto-currency. 

A government backed cryptocurrency.... hmmmm....

I think the government in question has no idea what they are talking about.

Simon-in-Suffolk posted:

Guys, there is more to Bitcoin and block chain rather than simply speculative investing/gambling yet that seems to be the majority discussion on this thread... true the recent explosion of interest and new money purchase of cryptos I suspect is mostly from those wanting to get wealthy quick and fear of missing out mentality. and yes I suspect values will rise significantly again in 2018. However I suspect if that is your only motivation with no understanding of the tech and how it is evolving. I feel that is not entirely healthy and could end in tears...... and if it is your motivation, and after all I do enjoy a day at the races as well, please only purchase what you are willing to write off.

 

In my mind, blockchain will certainly disrupt current financial system.  In 10 years cryptocurrencies will be a multi trillion $ asset class. There are currently > 1,300 different cryptos from which a small % will dominate the future. You cant really separate "block chain technology" from the cryptos on the chains. Price action is a good indicator of the "global consensus" regarding the probability of success each coin offers.

Im not convinved the massive influx of fiat into bitcoin is fueled by FOMO. Obviously some buy with that mindset but Im guessing quite a bit of the so called "smart money" is buying Bitcoin ahead of the Dec 18 CME trading start date.

Take a look at the Bitcoin "ETF" that is currently trading at a 90% premium over the underlying asset. That is pretty shocking that traditional retail investors are willing to pay nearly $20,000 for exposure to a single BTC. Is that FOMO or just lack of better options?

BTC trading over $13,000 in Korea.

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Only a few gateways between KRW and BTC. It is possible USD markets are unavailable to Korean citizens. It might make for good arbitrage but the counterparty risk holding KRW might be too high to make it worthwhile.

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Only a few gateways between KRW and BTC. It is possible USD markets are unavailable to Korean citizens. It might make for good arbitrage but the counterparty risk holding KRW might be too high to make it worthwhile.

I think I can fairly easily trade KRW/USD (or CAD) in either direction (and I'm not in this business). It was easy to get a quote, at least. KRW doesn't particularly risky, essentially flat against the USD between 1000 and 1300. I don't have time to look into it but the risk of holding KRW seems reasonable, even if you couldn't exit immediately.

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Because the value of crypto currency against fiat is solely driven by demand and availability at the fiat/crypto conversion points - the exchanges.... the demand in different parts of the world differs, where the demand is higher the price is higher, and the demand in Asia is significantly higher than in the US and Europe recently hence the price is higher... however there is a trading process of arbitrage that effectively brings many of the major global exchanges together after a while... a bit like a rubber band bringing things back together. There are also some exchanges where they have more of a captive audience like in countries such as Zimbabwe, here you see the fiat price of crypto a lot higher... however once you have the crypto currency then it’s specific value is constant everywhere.

To your point why doesn’t everyone arbitrage... well you need to be registered and validates in most mainstream exchanges to trade and also transferring coins around like bitcoin can take many hours so as to provide the appropriate network validation, and you might find the fiat prices have adjusted in that time... but that aside arbitrage is undertaken by serious traders... and is a useful means of encouraging global fiat consistency against cryptos. As I type 1BTC is worth $13.1k in the US and Europe.

Simon-in-Suffolk posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Because the value of crypto currency against fiat is solely driven by demand and availability at the fiat/crypto conversion points - the exchanges.... the demand in different parts of the world differs, where the demand is higher the price is higher, and the demand in Asia is significantly higher than in the US and Europe recently hence the price is higher... however there is a trading process of arbitrage that effectively brings many of the major global exchanges together after a while... a bit like a rubber band bringing things back together. There are also some exchanges where they have more of a captive audience like in countries such as Zimbabwe, here you see the fiat price of crypto a lot higher... however once you have the crypto currency then it’s specific value is constant everywhere.

To your point why doesn’t everyone arbitrage... well you need to be registered and validates in most mainstream exchanges to trade and also transferring coins around like bitcoin can take many hours so as to provide the appropriate network validation, and you might find the fiat prices have adjusted in that time... but that aside arbitrage is undertaken by serious traders... and is a useful means of encouraging global fiat consistency against cryptos. As I type 1BTC is worth $13.1k in the US and Europe.

It doesn't take everyone to be arbitraging, just enough to eliminate the spread. I'm still unsure as to why the USD/KRW seems to have so much friction or some other reason for apparent mispricing. Looking at Cryptowatch, KRW pricing does look anomalous.

winkyincanada posted:

Simon-in-Suffolk posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Because the value of crypto currency against fiat is solely driven by demand and availability at the fiat/crypto conversion points - the exchanges.... the demand in different parts of the world differs, where the demand is higher the price is higher, and the demand in Asia is significantly higher than in the US and Europe recently hence the price is higher... however there is a trading process of arbitrage that effectively brings many of the major global exchanges together after a while... a bit like a rubber band bringing things back together. There are also some exchanges where they have more of a captive audience like in countries such as Zimbabwe, here you see the fiat price of crypto a lot higher... however once you have the crypto currency then it’s specific value is constant everywhere.

To your point why doesn’t everyone arbitrage... well you need to be registered and validates in most mainstream exchanges to trade and also transferring coins around like bitcoin can take many hours so as to provide the appropriate network validation, and you might find the fiat prices have adjusted in that time... but that aside arbitrage is undertaken by serious traders... and is a useful means of encouraging global fiat consistency against cryptos. As I type 1BTC is worth $13.1k in the US and Europe.

It doesn't take everyone to be arbitraging, just enough to eliminate the spread. I'm still unsure as to why the USD/KRW seems to have so much friction or some other reason for apparent mispricing. Looking at Cryptowatch, KRW pricing does look anomalous.

Looks like Korean markets are leading indicators for USD pricing. BTC now trading > $16,000 in Korea and $13,400 in US/D. Those Koreans sure like them some bitcoin. 

winkyincanada posted:

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Only a few gateways between KRW and BTC. It is possible USD markets are unavailable to Korean citizens. It might make for good arbitrage but the counterparty risk holding KRW might be too high to make it worthwhile.

I think I can fairly easily trade KRW/USD (or CAD) in either direction (and I'm not in this business). It was easy to get a quote, at least. KRW doesn't particularly risky, essentially flat against the USD between 1000 and 1300. I don't have time to look into it but the risk of holding KRW seems reasonable, even if you couldn't exit immediately.

It isn't the risk of KRW but the risk holding large KRW position on a Crypto exchange. AFAIK most are not "regulated" or insured. 

Also the time it takes to get the KRW converted back to USD and into an exchange is probably a few days. My suspicion is arbitrage will become easier/more profitable in terms of USD once the futures market opens on December 18.

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Only a few gateways between KRW and BTC. It is possible USD markets are unavailable to Korean citizens. It might make for good arbitrage but the counterparty risk holding KRW might be too high to make it worthwhile.

I think I can fairly easily trade KRW/USD (or CAD) in either direction (and I'm not in this business). It was easy to get a quote, at least. KRW doesn't particularly risky, essentially flat against the USD between 1000 and 1300. I don't have time to look into it but the risk of holding KRW seems reasonable, even if you couldn't exit immediately.

It isn't the risk of KRW but the risk holding large KRW position on a Crypto exchange. AFAIK most are not "regulated" or insured. 

Also the time it takes to get the KRW converted back to USD and into an exchange is probably a few days. My suspicion is arbitrage will become easier/more profitable in terms of USD once the futures market opens on December 18.

OK, makes sense. I think.

As an aside, some of the minor cryptos make BTC look positively calm. I think it was STR that was up 23% PRICED IN BTC!

$15,000. I hope everyone gets out in time. Oh, that's right, they can't. Some will, most won't.

$16,000. It's hard to keep up.

From the WaPo...

"In South Korea, ordinary people are pouring their life savings into bitcoins and other digital currencies."

Hm, could South Korea could be in for a South (China) Sea bubble?

winkyincanada posted:

$16,000. It's hard to keep up.

$17,000

This morning it was nearly $18,500 after a huge buy order was executed.

winkyincanada posted:

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

winkyincanada posted:

Kevin Richardson posted:

BTC trading over $13,000 in Korea.

Serious question. Why would bitcoin trade at different prices in different jurisdictions. Isn't it essentially borderless? How is this not a slam-dunk arbitrage trade?

Only a few gateways between KRW and BTC. It is possible USD markets are unavailable to Korean citizens. It might make for good arbitrage but the counterparty risk holding KRW might be too high to make it worthwhile.

I think I can fairly easily trade KRW/USD (or CAD) in either direction (and I'm not in this business). It was easy to get a quote, at least. KRW doesn't particularly risky, essentially flat against the USD between 1000 and 1300. I don't have time to look into it but the risk of holding KRW seems reasonable, even if you couldn't exit immediately.

It isn't the risk of KRW but the risk holding large KRW position on a Crypto exchange. AFAIK most are not "regulated" or insured. 

Also the time it takes to get the KRW converted back to USD and into an exchange is probably a few days. My suspicion is arbitrage will become easier/more profitable in terms of USD once the futures market opens on December 18.

OK, makes sense. I think.

As an aside, some of the minor cryptos make BTC look positively calm. I think it was STR that was up 23% PRICED IN BTC!

I've seen some go up 400+% in a 24 hour period!

A friend once suggested a difference in how (generally) men and women invest. A woman buys, sees a 'nice' increase in value - and sells. Puts the product out of her mind.

A man buys, sees a 'nice' increase in value - and worries about the possible future rise and so hangs on - often too long.

You appear to have already made an indecent amount of money for absolutely no effort. Why not cash in and enjoy it?

Of course ----- tomorrow it might be even bigger and you'll have thrown away all that extra happiness, validation and security.

How miserable are you to need so much more happiness to face each day?