Bitcoin

Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

My friend is range trading GBTC and has been very happy. (He actually sold at $20.20!) Personally GBTC is too risky for me since it trades at a huge premium over NAV. That premium can dissipate much faster than BTC can crash.

Anyhoo... Congratulations!

Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

BTW.... my friend is a professional technical analyst and his new entry point is $10.50.

Kevin Richardson posted:
Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

BTW.... my friend is a professional technical analyst and his new entry point is $10.50.

What on earth does he base that on? Is he a "chartist" that looks for the patterns in the price movements?

Kevin Richardson posted:
Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

My friend is range trading GBTC and has been very happy. (He actually sold at $20.20!) Personally GBTC is too risky for me since it trades at a huge premium over NAV. That premium can dissipate much faster than BTC can crash.

Anyhoo... Congratulations!

NAV? There is no underlying NAV for these things.

I've been trading cryptos for the past 3 months. It is not my intention to boast or advocate others to follow my example, but let's just say that I made more money in one day than I made in a month from what could be considered a good salary. People often talk of their gains but not of their losses. Fortunately for me I haven't lost any money yet, but it's advisable to never say never.

For those thinking of entering the market it is a risky proposition but if you know the rules of the game, understand her moods and sentiments it is possible to make a huge amount of money in a very short period of time. For example, where else can you flip an investment within 24 hours for 20% profit? By compounding the returns the funds can accumulate quickly. However, a sizeable investment is required otherwise it could take months to see a reasonable return.

There is a big difference between having £500 invested and seeing the value drop 15% as opposed to having £50,000 and seeing its value depreciate. This game is not for everyone. In essence it is an enormous ponzi scheme: for the value of a coin to go up in value people must be willing to pay a higher price and increase the market cap. 

To the fellow traders out there: I hope you have a good day at market!

"but if you know the rules of the game, understand her moods and sentiments it is possible to make a huge amount of money in a very short period of time"

Minh, can you let me know, just before, when and where  you're going to make your next 15-20% profit? I'd like to follow the progress.

I'd like to share some tips for the fellow traders out there and anyone interested in having a dabble (do not invest money that you cannot afford to lose). I don't hold investments in BTC/ETH/NEO etc but rather I use them as gateway coins to buy alt coins (AC). I personally like ETH more than BTC because the transaction costs are lower. NEO is even better because it's practically zero commision and you also automatically accumulate GAS for holding NEO (similar to dividends).

Here's a hypothetical example. The current price of ETH is about $830. Imagine that the price of an AC is 0.00072 ETH (which is about $0.60) on Monday. Three days later you see the same AC for 0.00069 ETH but the on screen price is still $0.60. How can this be the possible when there is a 0.00003 difference in the ETH price? It seems like a paradox but the answer is quite simple. The price of the AC hasn't really changed. All that has happened is the price of ETH has risen in value which makes the AC look like it is cheaper. Be very careful with the on screen price! Use it as a guideline but the price that you should be concentrating on is the ETH price because the AC is pegged against the value of ETH. 

Imagine three platforms where the middle and last platforms can go up and down:

$ --- ETH --- AC

Here are some scenarios to consider:

(1) The price of ETH stays the same but the price of the AC doubles in value. When you cash out you make double your money.

(2) The price of ETH doubles and the price of your AC doubles. When you cash out you make quadruple your money.

(3) The price of ETH stays the same but your AC loses 30% in value. When you cash out you will lose 30% of your money.

(4) The price of ETH loses 30% and the price of your AC loses 20%. When you cash out you lose 20% from the AC but you also lose 30% from the reduced price of ETH. This is the worst scenario to be in. Some people will lose almost all of their money from investing in an AC that has been 'pumped' and then 'dumped'. One way of remedying this situation is to hold onto the ETH until it goes back up in value: it might take a while though because the market is so volatile at the moment.

I hope it all makes sense! Happy trading!

count.d posted:

"but if you know the rules of the game, understand her moods and sentiments it is possible to make a huge amount of money in a very short period of time"

Minh, can you let me know, just before, when and where  you're going to make your next 15-20% profit? I'd like to follow the progress.

One of my favorite coins for flipping is called Dragonchain (DRGN). The price can easily swing 10% in one day or even 25%. I've flipped this coin several times, however, you'll need to track the price carefully to make an educated guess at what is considered a good price. In my humble opinion 0.0015 ETH is a good price for DRGN after factoring in the current market conditions. 

count.d posted:

Minh, just when you actually do the trade. A simple statement "I've just bought xxx at xxx price" would be suffice thanks. I can then follow the easy 20% rise.

I'm afraid it isn't that simple. If I were to advise you to go onto an exchange called Kucoin and buy DRGN today, there's a chance that the market could undergo a correction the next day and you'd be down 15% for example. However, if you don't mind taking the risk, contact me on Telegram and we can exchange ideas. My ID is cryptomole.

PS. If you have a sizeable amount of money to play with ie 5k I can show you how to drive the price of a coin down by using the pieces that are already on the Buy Orders list. Think of it like a game of chess.

Minh Nguyen posted:
 

PS. If you have a sizeable amount of money to play with ie 5k I can show you how to drive the price of a coin down by using the pieces that are already on the Buy Orders list. Think of it like a game of chess.

That is market manipulation and is illegal for good reason in very many contexts.

winkyincanada posted:
Minh Nguyen posted:
 

PS. If you have a sizeable amount of money to play with ie 5k I can show you how to drive the price of a coin down by using the pieces that are already on the Buy Orders list. Think of it like a game of chess.

That is market manipulation and is illegal for good reason in very many contexts.

With all due respect, it is not illegal to put in a Buy Order. If someone wishes to sell their stock at the price I am offering it is their choice. No one is putting a gun to their head.

winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

When I entered this market I was a sardine. I watched the whales that had a lot of money commanding their prices. Win some lose some. It's a part of life. We should learn from our experiences.

winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

This analogy could be considered to be incorrect. When I advertised my car for sale I was asking for £1,000. Ten people came to view my car and one person offered me £900. I refused the offer because I thought my car was worth more money. The last person I saw offered me even less: £800. I have two options to consider. If wait until the summer someone is more likely to pay the asking price. However, if I really need the money, I may be inclined to accept a lower offer; this does not necessarily translate to me losing money; perhaps I made less profit than I expected.

winkyincanada posted:
Minh Nguyen posted:
 

PS. If you have a sizeable amount of money to play with ie 5k I can show you how to drive the price of a coin down by using the pieces that are already on the Buy Orders list. Think of it like a game of chess.

That is market manipulation and is illegal for good reason in very many contexts.

Maybe you have never heard of the term algo trading (even quant trading)?

Minh Nguyen posted:
winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

This analogy could be considered to be incorrect. When I advertised my car for sale I was asking for £1,000. Ten people came to view my car and one person offered me £900. I refused the offer because I thought my car was worth more money. The last person I saw offered me even less: £800. I have two options to consider. If wait until the summer someone is more likely to pay the asking price. However, if I really need the money, I may be inclined to accept a lower offer; this does not necessarily translate to me losing money; perhaps I made less profit than I expected.

I have no idea what you're trying to demonstrate. But a car isn't like a crypto. A car has value.

winkyincanada posted:
Minh Nguyen posted:
winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

This analogy could be considered to be incorrect. When I advertised my car for sale I was asking for £1,000. Ten people came to view my car and one person offered me £900. I refused the offer because I thought my car was worth more money. The last person I saw offered me even less: £800. I have two options to consider. If wait until the summer someone is more likely to pay the asking price. However, if I really need the money, I may be inclined to accept a lower offer; this does not necessarily translate to me losing money; perhaps I made less profit than I expected.

I have no idea what you're trying to demonstrate. But a car isn't like a crypto. A car has value. 2

At the most fundamental level, supply and demand in the market determine the price of an object, be it a stock share, a car, or a bitcoin, or a treasury note, or an ETF, or NAC 552, a NAP 500, or even your house, etc.

winkyincanada posted:
Kevin Richardson posted:
Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

My friend is range trading GBTC and has been very happy. (He actually sold at $20.20!) Personally GBTC is too risky for me since it trades at a huge premium over NAV. That premium can dissipate much faster than BTC can crash.

Anyhoo... Congratulations!

NAV? There is no underlying NAV for these things.

GBTC is an ETF that holds BTC. It currently trades at a 70% premium above the value of BTC/share. I think 1 GBTC = .001 BTC and was trading at 20.20 when BTC was around 12,000. So the NAV was only $12.

winkyincanada posted:
Minh Nguyen posted:
 

PS. If you have a sizeable amount of money to play with ie 5k I can show you how to drive the price of a coin down by using the pieces that are already on the Buy Orders list. Think of it like a game of chess.

That is market manipulation and is illegal for good reason in very many contexts.

Crypto markets are mostly unregulated so this type of strategy is commonplace.

winkyincanada posted:
Kevin Richardson posted:
Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

BTW.... my friend is a professional technical analyst and his new entry point is $10.50.

What on earth does he base that on? Is he a "chartist" that looks for the patterns in the price movements?

Well he works as a technical analyst for a well know financial firm. So I guess he is a "chartist" with a solid background in financial mathematics.

He is pissed at me because I didn't force him to buy BTC when it was $10. 😂 Even though I've retained all my text messages from 2012-13 explaining why he should buy BTC; he refuses to believe I ever mentioned it to him. I'm glad he is trading it now (even though I feel the premium above NAV makes GBTC way to risky and have suggested the risk adjusted returns on GBTC are much lower than directly trading BTC. Oh well... he doubled his USD in a few days.)

Minh Nguyen posted:

I've been trading cryptos for the past 3 months. It is not my intention to boast or advocate others to follow my example, but let's just say that I made more money in one day than I made in a month from what could be considered a good salary. People often talk of their gains but not of their losses. Fortunately for me I haven't lost any money yet, but it's advisable to never say never.

For those thinking of entering the market it is a risky proposition but if you know the rules of the game, understand her moods and sentiments it is possible to make a huge amount of money in a very short period of time. For example, where else can you flip an investment within 24 hours for 20% profit? By compounding the returns the funds can accumulate quickly. However, a sizeable investment is required otherwise it could take months to see a reasonable return.

There is a big difference between having £500 invested and seeing the value drop 15% as opposed to having £50,000 and seeing its value depreciate. This game is not for everyone. In essence it is an enormous ponzi scheme: for the value of a coin to go up in value people must be willing to pay a higher price and increase the market cap. 

To the fellow traders out there: I hope you have a good day at market!

Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time.

Kevin Richardson posted:
winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

What? That simply is not true. 

Where then, does the money come from?

Kevin Richardson posted:
winkyincanada posted:
Kevin Richardson posted:
Frank Yang posted:

Today is my wife's birthday and GBTC has treated me well, I bought loads of it @ $9.60 on Feb 5th and now it is $19.99 at the close today, a jump of more than 100 % in less than 2 weeks.

My friend is range trading GBTC and has been very happy. (He actually sold at $20.20!) Personally GBTC is too risky for me since it trades at a huge premium over NAV. That premium can dissipate much faster than BTC can crash.

Anyhoo... Congratulations!

NAV? There is no underlying NAV for these things.

GBTC is an ETF that holds BTC. It currently trades at a 70% premium above the value of BTC/share. I think 1 GBTC = .001 BTC and was trading at 20.20 when BTC was around 12,000. So the NAV was only $12.

What is happening there is that what appears to be an arbitrage opportunity may, in fact, be unrealisable at an appropriate level of risk due to frictional costs and counter-party risk in the period between deal and settlement. If it is a genuine arbitrage opportunity, the market should quickly correct the pricing. If the market is inefficient, and you're sharp, yes you can can profit. But I'll reiterate that trading is a less-than-zero-sum game and any profit is, and must be, someone else's loss. This is particularly true in crypto, where the things being traded have zero fundamental value, so market-making and the correct pricing of capital is not a relevant, nor useful outcome.

Frank Yang posted:
winkyincanada posted:
Minh Nguyen posted:
winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

This analogy could be considered to be incorrect. When I advertised my car for sale I was asking for £1,000. Ten people came to view my car and one person offered me £900. I refused the offer because I thought my car was worth more money. The last person I saw offered me even less: £800. I have two options to consider. If wait until the summer someone is more likely to pay the asking price. However, if I really need the money, I may be inclined to accept a lower offer; this does not necessarily translate to me losing money; perhaps I made less profit than I expected.

I have no idea what you're trying to demonstrate. But a car isn't like a crypto. A car has value. 2

At the most fundamental level, supply and demand in the market determine the price of an object, be it a stock share, a car, or a bitcoin, or a treasury note, or an ETF, or NAC 552, a NAP 500, or even your house, etc.

Price doesn't equal value.

Kevin Richardson posted:

Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time.

It is a variation of a Ponzi scheme in which everyone who is playing already knows it is a Ponzi scheme. So the fraudulent nature of a "traditional" Madoff-style ponzi is arguably absent.

Kevin Richardson posted
Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time

You have my apologies. I shall refrain from using such a description. Please forgive my poor choice of words.

winkyincanada posted:
Kevin Richardson posted:

Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time.

It is a variation of a Ponzi scheme in which everyone who is playing already knows it is a Ponzi scheme. So the fraudulent nature of a "traditional" Madoff-style ponzi is arguably absent.

It’s  pretty well as much as a Ponzi Scheme as trading stocks and shares  ... especially in western markets where there is a degree of regulation... if you wish to trade stock and shares or cryptos you soon realise they are very similar... based on fundamentals, long positions, and most of all sentiment...  Severeal years back when I was studying the markets  I was genuinely surprised to learn that company stock value  is  not directly related to how well the company is performing... its actually the sentiment and perception of how well the company is performing (which are usually but not always in alignment) and whether you believe for the majority you can take a long position on the stock... not dissimilar to cryptos. And again similar to Cryptos you can take a short position if you feel the sentiment/fundamentals will sink the price in the short term. Yes there is less liquidity in most cryptos than big major stocks  so more susceptible to manipulation/volatility  whether intentional or not, but that may change over time with increasing wider adoption outside of high worth individuals, country/corporate organisations.

Neither the stock market nor cryptocurrencies are Ponzi schemes,  which by definition is a "fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading." People have come to use the term to mean anything they view as a scam, when in fact it is a very specific type of scam.

The stock market is a rigged game for insiders and their political hacks, so it has scam-like elements, but it is not a Ponzi scheme. Some (many? most?) cryptos are nothing more than a blatant scam, while others seem to be an attempt to resolve certain business problems, and are themselves legitimate attempts to change the way things are.

In fact, under the actual definition, US Social Security is actually much closer, if not a nearly a direct example, of a Ponzi scheme than either the stock market or cryptos.

The IRS has determined in its initial guidance the cryptos are to be treated as property for tax purposes, and not a currency, although by design they do have currency-like characteristics; at this stage are really too inherently unstable price-wise to actually function as currencies. Speculations and not for the rent money.

Anything that serves to pressure the utterly incompetent and corrupt central banking system can't be all bad.

Disclosure: I am not in the cryptocurrency market.

Simon-in-Suffolk posted:
winkyincanada posted:
Kevin Richardson posted:

Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time.

It is a variation of a Ponzi scheme in which everyone who is playing already knows it is a Ponzi scheme. So the fraudulent nature of a "traditional" Madoff-style ponzi is arguably absent.

It’s  pretty well as much as a Ponzi Scheme as trading stocks and shares  ... especially in western markets where there is a degree of regulation... if you wish to trade stock and shares or cryptos you soon realise they are very similar... based on fundamentals, long positions, and most of all sentiment...  Severeal years back when I was studying the markets  I was genuinely surprised to learn that company stock value  is  not directly related to how well the company is performing... its actually the sentiment and perception of how well the company is performing (which are usually but not always in alignment) and whether you believe for the majority you can take a long position on the stock... not dissimilar to cryptos. And again similar to Cryptos you can take a short position if you feel the sentiment/fundamentals will sink the price in the short term. Yes there is less liquidity in most cryptos than big major stocks  so more susceptible to manipulation/volatility  whether intentional or not, but that may change over time with increasing wider adoption outside of high worth individuals, country/corporate organisations.

I think it is a stretch to equate owning shares in a company making phones, cars, steel, buildings, mines, etc. with holding crypto as an "investment". You are 100% correct that the current performance of companies and their market capitalization (share price) are not directly correlated, but there is certainly a significant link for most stocks. P/E ratios and dividend yields are monitored (and many other metrics) and used for pricing the stocks. No such equivalent for crypto as the "coins" don't do anything. Some are used for real-world transactions, sure, but they are they not useful for that regardless of their nominal (non-zero) price? Their price is arguably underpinned in some sense by the cost of mining them, but to me this is a simply nonsensical arrangement. "They are fundamentally worthless, but priced at XX becasue it costs at least XX to make one". What?

There is also a large body of regulation aimed at ensuring that equity investors are truthfully informed of the performance of public companies, and of the risks. (I work in this space for minerals-industry companies and projects) It's far from perfect, of course, but there is zero analogy for this with crypto.

Bubbles, based on unrealistic expectations of performance, magnified by uninformed and emotive fear-of-missing-out, do occur in the equities markets, but these always burst. I don't know, perhaps with crypto, we have reached the perfect storm where everyone knows there is no underlying value going in, so there will be nothing that can prick the bubble. The crypto markets do appear relatively immune to news of disfunction. So there they remain with buyers giving real money to sellers, traders taking their skim, miners making a margin while using-up real resources, and on it will go. The systemic house profits of casinos hasn't led to their demise, so this might just go on forever.

The argument that some crypto will become actually useful is an interesting one. I'm yet to be convinced that this is the case, although blockchain logic/systems does seem to have many promising applications in a world where no-one trusts anyone.

winkyincanada posted:
Simon-in-Suffolk posted:
winkyincanada posted:
Kevin Richardson posted:

Please don't call BTC a Ponzi Scheme. It is not based on fraud and/or deception. The markets are a bit susceptible to manipulation but the impact any individual can have day-to-day on market price will decrease over time.

It is a variation of a Ponzi scheme in which everyone who is playing already knows it is a Ponzi scheme. So the fraudulent nature of a "traditional" Madoff-style ponzi is arguably absent.

It’s  pretty well as much as a Ponzi Scheme as trading stocks and shares  ... especially in western markets where there is a degree of regulation... if you wish to trade stock and shares or cryptos you soon realise they are very similar... based on fundamentals, long positions, and most of all sentiment...  Severeal years back when I was studying the markets  I was genuinely surprised to learn that company stock value  is  not directly related to how well the company is performing... its actually the sentiment and perception of how well the company is performing (which are usually but not always in alignment) and whether you believe for the majority you can take a long position on the stock... not dissimilar to cryptos. And again similar to Cryptos you can take a short position if you feel the sentiment/fundamentals will sink the price in the short term. Yes there is less liquidity in most cryptos than big major stocks  so more susceptible to manipulation/volatility  whether intentional or not, but that may change over time with increasing wider adoption outside of high worth individuals, country/corporate organisations.

I think it is a stretch to equate owning shares in a company making phones, cars, steel, buildings, mines, etc. with holding crypto as an "investment". You are 100% correct that the current performance of companies and their market capitalization (share price) are not directly correlated, but there is certainly a significant link for most stocks. P/E ratios and dividend yields are monitored (and many other metrics) and used for pricing the stocks. No such equivalent for crypto as the "coins" don't do anything. Some are used for real-world transactions, sure, but they are they not useful for that regardless of their nominal (non-zero) price? Their price is arguably underpinned in some sense by the cost of mining them, but to me this is a simply nonsensical arrangement. "They are fundamentally worthless, but priced at XX becasue it costs at least XX to make one". What?

There is also a large body of regulation aimed at ensuring that equity investors are truthfully informed of the performance of public companies, and of the risks. (I work in this space for minerals-industry companies and projects) It's far from perfect, of course, but there is zero analogy for this with crypto.

Bubbles, based on unrealistic expectations of performance, magnified by uninformed and emotive fear-of-missing-out, do occur in the equities markets, but these always burst. I don't know, perhaps with crypto, we have reached the perfect storm where everyone knows there is no underlying value going in, so there will be nothing that can prick the bubble. The crypto markets do appear relatively immune to news of disfunction. So there they remain with buyers giving real money to sellers, traders taking their skim, miners making a margin while using-up real resources, and on it will go. The systemic house profits of casinos hasn't led to their demise, so this might just go on forever.

The argument that some crypto will become actually useful is an interesting one. I'm yet to be convinced that this is the case, although blockchain logic/systems does seem to have many promising applications in a world where no-one trusts anyone.

BTC is closer to physical PM trading than equities. The true value is pure speculation at this point so it is somewhat similar to  micro-cap biotech stock with zero yield and negative earnings but with great intellectual property that might produce a "killer" [or life saving] product in the next decade. High risk with possible high reward. Everybody should have a small allocation with this type of risk:reward profile.

What is not really debateable is that it is not based on fraud or deception. People may jump in without knowing what they are buying but that isn't BTC fault.

winkyincanada posted:
Kevin Richardson posted:
winkyincanada posted:
Minh Nguyen posted:

 

To the fellow traders out there: I hope you have a good day at market!

No you don't. For every one who has a good day, someone else has a bad day.

What? That simply is not true. 

Where then, does the money come from?

I sell something at a price that is good for me to a person that wants what I have at a price that is good for them. No different than any other asset. Only time will show which side made the bad trade. Many people are happy to sell after a week with a 50% profit. The buyer might hold it for a year and make 10,000%.

I'd like to share another tip. Some exchanges offer their own token. Let's use Binance Coin (BNB) as an example. By the way Binance is one of the biggest exchanges and they sometimes transact billions in revenue every day. The 'purpose' of this token is to save one money on transactions fees (50% discount), however it can also be used to buy another coin that is listed on their exchange. The value of BNB went to the moon. There is an inherent 'issue' with using an exchange token to buy an alt coin (AC). 

(1) BNB has a significantly lower market cap (MC) than BTC for example: BNB currently has a MC of just under 1 billion compared to BTC which is just over 162 billion: I'm to indexing prices relative to the United States Dollar (USD). Let's pretend that one is in situation where one needs to sell one's stock quickly. If one were to use BNB to buy an AC, due to the fact that the MC is much lower than BTC or ETH for example, one could find it much more difficult to sell one's stock quickly because there are not so many people available to buy the stock: remember that BNB only has a MC of less than 1 billion compared to the 162 billion of BTC. The trading 'rooms' for BNB can be much 'slower' than the BTC rooms. In addition the variance in price can be much lower. For example, the lowest Sell Order in the BTC room could be 0.00020000 BTC and the highest Buy Order could be 0.00019999 (we're talking about fractions of a cent in the price). However, because BNB coin has a MC that is significantly lower than BTC, the variance in price is often quite large in the BNB room ie the lowest Sell Order could be 0.00012345 compared to the highest Buy Order of 0.00011000. In this situation it is not always advisable to use BNB to buy an AC.

(2) Should the value of BNB rise faster than the price of the AC, it may artificially depress the value of the AC. Remember from my previous post that if on a particular day the value of BNB is for example 0.12345678 BNB (approximately $1.15802460) and three days later it is 0.12345555 ($1.15801259) the AC has not changed in value, rather the price of BNB has gone up. This may present one with a new 'problem'. Should BNB continue to rise in value compared to an AC which is not rising in value, it is possible that one will be stuck in a situation where the AC may never gain any real value. This presents a potentially 'dangerous' situation. One could cash out back to BNB but there is no guarantee that the AC will regain any value in the long term. In this situation it may be preferable to hold the exchange token (BNB) and let it gain in value as opposed to using it to buy an AC.

Kevin Richardson posted:
winkyincanada posted:

Where then, does the money come from?

I sell something at a price that is good for me to a person that wants what I have at a price that is good for them. No different than any other asset. Only time will show which side made the bad trade. Many people are happy to sell after a week with a 50% profit. The buyer might hold it for a year and make 10,000%.

The difference is that these "assets" have no value. Value is not being created, just transferred. Value is of course also being destroyed by the mining process, so someone has to pay for that, too.

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