1 BTC = $8.2k, it’s up 735% this yr UPDATE 5/19: BTC @ $42k :damn:

GoldenGlove

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Which exchanges yal think will stand the testament of time at this point? Coinbase? Binance?
:lupe:
 
mannyrs13

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GoldenGlove said:
Which exchanges yal think will stand the testament of time at this point? Coinbase? Binance?
:lupe:
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those are good ones, tho CB does have its issues. i was hearing about it being down today or yesterday supposedly, not sure when. its tough to say if they'll last. Binance looks to have less issues and might be stronger. the other smaller exchanges like kucoin and etoro i doubt are as strong, but haven't heard of them being in jeopardy. the exchanges that i think are strong are the ones that aren't traditionally exchanges. I don't mean a cex like uniswap, but rather the stock ones that have added crypto. like webull, fidelity soon, and robinhood. only issue is they have limited amount of coins and capabilities. so that hurts them. prolly the CEX are the ones likely to stand the test of time.
 
GoldenGlove

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mannyrs13 said:
those are good ones, tho CB does have its issues. i was hearing about it being down today or yesterday supposedly, not sure when. its tough to say if they'll last. Binance looks to have less issues and might be stronger. the other smaller exchanges like kucoin and etoro i doubt are as strong, but haven't heard of them being in jeopardy. the exchanges that i think are strong are the ones that aren't traditionally exchanges. I don't mean a cex like uniswap, but rather the stock ones that have added crypto. like webull, fidelity soon, and robinhood. only issue is they have limited amount of coins and capabilities. so that hurts them. prolly the CEX are the ones likely to stand the test of time.
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The exchanges that offer farming and staking are the ones that look the most vulnerable. It's looking like nothing is safe
:sadcam:
 
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Remote said:



:hubie:
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i tried to explain this to a breh (and why price inflation is more pronounced in crypto and what that means for capital loss on the way down) months ago.

got babble.

gave up in the end.

:hubie:

brehsimilitude said:
you do not have to mark your crypto holdings to market as mark-to-market is related to commercial accounting itself and in particular risk management.

crypto is relatively illiquid non-cash.

you ignored the word "inflow". how much of the original principal is lost. 0 - 100% aside from certain margin purchases. and certainly not 100's of times as much (i.e. 100m -> 4bn).

you pay 100m "cash" in. if crypto falls 100% you don't owe 4bn right? the damage done to your finances overall from start to finish net is 100m right?

mark-to-market accounting is related to risk and transparency because companies tend to leverage their unrealised gains in other financial activity.



margin calls are triggered at an amount calculated based on

i. the ratio of the sum of your inflows (i.e. your collateral) to the market value of your (leveraged) crypto holdings
ii. mitigated by your individual/company risk profile.

you can change that "certain amount" by increasing inflows i.e. paying in more collateral i.e. increasing your collateral.

the margin call itself is a request for an additional inflow.

so YES margin calls are based on "inflows" aka "all your inflows" aka "the sum of your inflows" aka "your total collateral".

-

to avoid taking an extensive safari of finance and to stick to the point i want to return to my question 3 from above.

my point was that crypto market cap will cause less damage than the equivalent stock or bond market cap % reduction from the same point on the way down overall. and would do less damage than an equivalently sized (but mature) bond/stock market.

margin calls, leverage etc play less of a role in crypto because crypto is a small less mature market and the re-leveraging of unrealised gains is more common in bond and stock markets. which means that the damage done in crypto by margin calls, leverage etc are even smaller relative to bond and stock markets.

-

to explain with a concrete example we jall ust saw (and have seen a few times) crypto lose more than half of its value.

in fact BTC lost 82% of it's value and dragged the entire market down with it in 2017 - 2018.

what massive effect did that have on main street i.e. the real productive economy? hardly any.

yes derivatives in crypto are more developed now but is nothing like the size or breadth or the leverage of the bond/stock markets.

if the stock market or bond prices FELL 50-60% the real productive economy would be in serious trouble.

to compound everything the crypto (relatively volatile hot air / smaller inflows inflated) market is GLOBAL. the USA is only about 60% of the less than 1tn that we are talking about.

-

TL;DR the dangers of a crypto crash are overblown. as the price is more easily inflated, the tokens less liquid and a secondary and/or derivative market is still developing the knock-on effects of such a crash will be less pronounced than with the "equivalent" crash in bond or stock markets. crypto is relatively illiquid and is not easily spent in the economy and nor is it in practice easily fungible with other asset classes. as such the damage to participant inflows would be smaller than in bond/stock and so the knock-on effects in the real-world "productive economy" would be less due to a relatively smaller loss of capital inflows overall.
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lib123 said:
We have no idea how much leverage is tied to crypto, whether it be individuals taking out loans to invest or more sophisticated investors holding derivatives tied to crypto. And margin calls aren’t necessarily triggered by inflows. It’s triggered by the value of crypto falling by a certain amount relative to collateral. If none of the buyers are willing to bid more than $5K for Bitcoin, there could be $1M in total inflows but the market value would be marked down to $5K. In ‘08 many MBS became bid-less, meaning no one was willing to buy certain risky securities. The lack of inflows didn’t mean that margin calls couldn’t be triggered. Margin calls were still triggered because the underlying securities dropped below a certain market value. A sudden drop in crypto would force many people to sell their stocks to cover margin calls.

And yes, brokerages mark crypto to market value. That’s how margin calls get triggered. Crypto is much bigger than 2017-18, especially the derivatives market tied to crypto. That increase in leverage and the uncertainty surrounding the total leverage make it impossible for you to say with certainty that the risks are overblown. If anything, past financial crisis have shown that the risks are usually underestimated.
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