Topic: Advice- Should friend send 6500 USD to just one exchange? (Read 445 times)

well thats the problem... you CANNOT calculate or predict huge dip... thats the problem... look at etherum for example... thats jhust not poissible. You have to have funds on exchnage and the orders already in place (buy XX BTC at 1300 USD price (for example). Your solution would be preferred (i did think of it myself also of course) but its just not possible. You would miss that sweet price.
Also the price might not FALL (for logn periods of time) to 1300 or similiar but just DIP there for some tiems (seconds, minutes, hours... a day)... friend cannot afford to lose this opportunity to buy just because he has to wait for bank to transfer money to the exchnage or to hunt somebody on local bitcoins to sell him for this price... he has to "be in position already"...


So Bitstamp is the safest option. Bitfinex should also be legit and big, altough they have money withdrawal issue (or something). What about BTC-e? I heart that they are "owned by russian mafia for money laundering purposes", nobody really knows who owns them, BUT they so far didnt suprisingly scam anyone... is that true?

What abotu kraken? Should be also quite big legit european exchnage, correct?

Thanks this was helpful. Yes im also worried like you said that the exchange might go "belly up" (insolvent) due to some reason and than my friends money would be trapped in and "labeled" as asset to be re-distributed to exchange creditors...
But im no sure that would be legal... if that happened friend would have to get ALL of his money back, since its his money and he has proof of it, right? He doesnt care that someone else lost Bitcoin on the exchange for example and be reimbursed on his behalf... correct?

Also, friend WILL have to keep that money on fiat on that exchange for some time, since he it waiting to buy BTC when (IF (!) ) it falls to somewhere below 2000 USD (he wishes for 1300 is able to accept 1500 not much higher).... so he can wait months maybe (!), or might never buy if BTC price keeps going up and some days (after several months of his money lying on exchange) decides just to pull the FIAT out... and thats the thing that worries him- leaving 6500 USD on fiat on exchange for several months...

I personally wouldn't have too many qualms about losing money on Bitstamp. I would be slightly lairy of falling into their KYC/AML nightmares. There's no one more uptight than them.

By 'Bitfines' do you mean Bitfinex? I wouldn't be inclined to trust them with money for long periods of time myself and they have banking problems anyway.

He doesn't have to leave money on an exchange for that long. There's no shortage of P2P options. Assuming that 1500 price happens, and I've no idea about that, sellers will be pretty subdued and the usual premiums P2P places like Localbitcoins have fall sharply when there's no hype.

Just a piece of friendly advice mate, don't deposit a buck in any exchanges because they're ought to get your money to run away afterwards.

What would you do if you were one of the people with minimum $50M dollars on a daily basis trading on a few exchanges? I know not all of

The reported 24 hours trading volume is real but even if the half is a real volume it's a significant amount. if such major services wanted to

Cause troubles as your concerns so easily then no one would be here right now.

It is not wise to park your money in an exchange for an extended amount of time whether it is fiat or btc. Get in and get out. If you are going to.wait for btc price to drop to 1500, it might not happen. But if you are still willing to wait for that price, hold your money somewhere else and deposit it when it is already on that price.

I would personally try to minimize the risk by trying to keep the fiat funds on the exchange for as little time as possible.
If I understand you correctly, he wants to leave the fiat on the exchange for some time and buy just at the right time?

I'd calculate how long it would take exactly for your money to appear on the exchange after depositing and just do the deposit when it's almost time to buy the Bitcoin, so the money is basically only a few days on the exchange instead of maybe weeks or months.

It's better to pay a bit too much for those Bitcoins than taking a bigger risk of losing the fiat on the exchange.
I don't care how safe a certain exchange is, bad things can always happen.

Well, I wouldn't suggest pushing around more money than you're willing to lose....But, some of the things I think about when I push money around are the limits....It sux when you can't get everything out at once when you need to move your investments fast.  So, it helps to spread it out some to beat the limitations and avoid the flags....right?

I have used bitstamp many times and they are great imo. Also I have asked those questions you are worried about and it goes

1) If in the small amount of time exchange is hacked, your fiat funds are safe. They are located at a bank offline, so there are 0 worries there.

2) I think this builds into #1 but if exchange gets hacked they can not access fiat funds. They can access roughly 2% of the BTC funds and that is it. You should be totally safe.

You can send to two or more exchanges but know there are fees everywhere (with your bank, and every exchange). You can diversify if you feel scared but I would just leave them on one, because I would pay significantly lower fees. Up to your friend in the end though its there money.

Hope that helps, gl with the cryptos

Bitstamp is a safe exchange, they were hacked once and lost a fairly small amount of bitcoin a very long time ago. There is very little risk of losing his fiat but its not non zero. The likeliest scenarios are from bitcoins getting stolen, your scenario 1 I think is impossible and scenario 2 is very unlikely since it would essentially render all their operators into worldwide criminals.

Hypothetically if their bitcoins are stolen they could become insolvent in which case fiat claims probably have a better claim against the exchange but ultimately they would be a creditor like any other to their bankrupt assets.

after my last experience I will never trust an exchange with my money , but I'm talking about crypto exchanges cause I have no idea about fiat ones since they aren't supported here
I would advice your friend to buy bitcoins from someone near his area , I guess its way better and he doesn't have to worry about things not going well

cause even Poloniex now are scamming people their hard earned money , here is my story btw if you are interested
https://bitcointalksearch.org/topic/resolved-poloniex-isnt-being-professional-at-all-with-me-1942358
and most people now still consider poloniex a legit and trusted exchange , my point is that never trust any site with your money

Tell your friend to choose a more stable exchange that didn't face Bitstamp's  problems in the past. BTC-e is a better choice IMO.
Also, if he's not planning to keep the money in there for long it doesn't matter which exchange he chooses. Chances that it gets hacked on the exact tad when he sends the money are slim.

I wouldn't worry about using Bitstamp to buy that amount of Bitcoin. Bitstamp is well established. They have much more to lose if they'd fraud you out of one transaction.

More importantly though is that transactions of $6500 in Bitcoin is a low value transaction. It's a lot of money to your friend. It's a lot of money to me. But in the world of Bitcoin, it's less than 3 coins. It's just not much.

If you want reassurance of how big single transactions of Bitcoin can be go to www.blockchain.info and watch the transactions getting confirmed on the blockchain. The transactions are public, they scroll through, and it will blow your mind how big they can be.

Another factor to consider is if your friend should keep, hold his/her Bitcoin on Bitstamp, which is an online wallet. Online wallets are convenient but the pose inherent security risks. Once your friend has purchased their Bitcoin they can send it to a more secure offline wallet. Explore different wallet options here: https://bitcoin.org/en/choose-your-wallet

Most people here use an online wallet (like Bitstamp) to facilitate transactions and they keep most of their Bitcoin holdings in an offline wallet, which could be as simple as a piece of paper or a USB drive.

Is there any claim about bitstamp - fiat deposit problem? The chance​ is very small for this exchange get hack at the time your friend deposit, or he is so unlucky if that happen. If you're so worrying about that, then your plan was good to diversify it.
Then, you may send some portions of the funds to bitstamp or bitfines to make sure, it's safe .
Or, deposit the funds on different days if you worry about bank investigate and force to send the money back.

Hello, friend of mine wants to finally buy some BTC (waiting for a bigger dip). He wants to put in around 6500 USD, which is a lot of money for him, but he is willing to risk it (its not his life time savings i assume (?) ). I have advice him to use Bitstamp as an exchange (we are both from europe). But he is (i would be also) worried about sending such ammount of money to exchange (at once, to one exchange)....

I gave him some advice we talked about it, and we are not afraif of BTC exchange hack (ones he buys the BTC, he will pull it out of the exchange and have the possesion of his private keys). The part we are worried about is:

1) The exchange being hacked and stripped of fiat... (im not sure how much possible is that, banks should be able to "re-force" the money back, right? (not like BTC)?

2) The exchnage collapsing and taking the fiat of its customers with it...

How much possible are these scenarious talking about Bistamp exchange? He will have to have the money there for some time (weeks/months) before the price drops to 1500 or similiar (hes buying point/price).

Again- not talking about the fear of losign BTC on exchanges, but the fear of losing FIAT on that exchange... How likely it is?

Is it a good idea to register also on other big europen exchnage (like bitfines) and send half of the ammount there (3250 USD to Bitstamp and 3250 USD to BitFines), to "diversify" the risk of fiat problems with exchanges?