Topic: Price pressure of exchanges - page 2. (Read 266 times)
Didn't this happen with gold?
I really happen? I use to think the fake volume are just for marketing on CMC. But aren't they audited everytime specially now that is regulated.
Most of the time I withdraw BTC and will just leave the fiat (USDT considered fiat) to wait for the BTC price to dip before buying back otherwise buy ETH and withdraw. I'm form the 3rd world so its much harder to receive USD unless its sent via paypal or western union by someone personally. BTC, ETH and XRP can easily liquidated in in my country.
Most of the time I withdraw BTC and will just leave the fiat (USDT considered fiat) to wait for the BTC price to dip before buying back otherwise buy ETH and withdraw. I'm form the 3rd world so its much harder to receive USD unless its sent via paypal or western union by someone personally. BTC, ETH and XRP can easily liquidated in in my country.
I'd lean more towards the opposite.
Fiat can be painfully slow to move in many parts of the world so it's likely you'll let it sit there if you plan to buy back in the near future. If there's a sudden price movement you have zero chance of getting to it unless you already have fiat parked there. It can take several days in third world countries like the US.
Crypto is at higher risk of disappearing and can be unassailably yours in a few minutes.
Enough people unquestionably do let both sit on exchanges at any one time for them to start playing fractional reserve. Impossible to know how prevalent it is but I'm sure it has and does happen. And you haven't picked up on USDT which is a whole other world of obfuscation.
Fiat can be painfully slow to move in many parts of the world so it's likely you'll let it sit there if you plan to buy back in the near future. If there's a sudden price movement you have zero chance of getting to it unless you already have fiat parked there. It can take several days in third world countries like the US.
Crypto is at higher risk of disappearing and can be unassailably yours in a few minutes.
Enough people unquestionably do let both sit on exchanges at any one time for them to start playing fractional reserve. Impossible to know how prevalent it is but I'm sure it has and does happen. And you haven't picked up on USDT which is a whole other world of obfuscation.
Hi Guys,
Let's do a theoretical here:
Let's assume that some exchanges are not honest and they not only inflate their volume, but they actually sell what they don't have. So they have 1000 real BTC in their possession, but they sell (and hence promise to pay out) multiple times of that. Hence creating fake/paper/on the books Bitcoin out of thin air. I recall this is the reason of the yearly "not your key not your coins day", but still: probably most of the users don't participate.
My thinking:
If you sell BTC and receive FIAT it is VERY likely that you will withdraw it. Because you "know" FIAT it's better/safer at the bank and you already have an account. Not to mention that the Exchange's bank reserves are easier to check by the authorities (assuming a regulated exchange which most of them are nowadays). So it is much easier for them to get into trouble if they create fake FIAT balance.
BUT
If you do the opposite: sell FIAT and buy BTC I believe that it is more likely that the you will leave it on the exchange (or the exchange's custodial "wallet") for long long time.
My point is:
It is way (probably multiple times?) easier for the exchanges to create fake BTC liquidity. Because of this their price pressure/manipulation capability is magnitudes higher on pushing BTC price down than on push it up.
Thanks for reading this far, what do you think?
PS:
"You" stands here as a placeholder for the average user, not "us".
Let's do a theoretical here:
Let's assume that some exchanges are not honest and they not only inflate their volume, but they actually sell what they don't have. So they have 1000 real BTC in their possession, but they sell (and hence promise to pay out) multiple times of that. Hence creating fake/paper/on the books Bitcoin out of thin air. I recall this is the reason of the yearly "not your key not your coins day", but still: probably most of the users don't participate.
My thinking:
If you sell BTC and receive FIAT it is VERY likely that you will withdraw it. Because you "know" FIAT it's better/safer at the bank and you already have an account. Not to mention that the Exchange's bank reserves are easier to check by the authorities (assuming a regulated exchange which most of them are nowadays). So it is much easier for them to get into trouble if they create fake FIAT balance.
BUT
If you do the opposite: sell FIAT and buy BTC I believe that it is more likely that the you will leave it on the exchange (or the exchange's custodial "wallet") for long long time.
My point is:
It is way (probably multiple times?) easier for the exchanges to create fake BTC liquidity. Because of this their price pressure/manipulation capability is magnitudes higher on pushing BTC price down than on push it up.
Thanks for reading this far, what do you think?
PS:
"You" stands here as a placeholder for the average user, not "us".
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