Topic: The most stupid dip in Bitcoin's history - and why we can be happy now (Read 444 times)

Even more, this kind of times show why one should not invest money he doesn't afford to lose or to "leave and forget".
People needing liquidity now and forced to sell their bitcoins will most probably sell at a loss.

During times like this where there isn't money to be made trading, and mining is a losing venture, it displays how important it is to be diversified not just in your holdings, but also your revenue.  Setting up deals so that you receive some guaranteed BTC regardless of the exchange rate and also deals that pay you BTC in a set USD amount.  This is so that if the price goes up, you are rewarded handsomely by your BTC denominated revenue, but if the price goes down, you are also rewarded by receiving more BTC in your USD denominated deals.  You can accomplish this by offering services for a price in BTC, or goods with their price set in USD.  Things like signature campaigns also usually pay a set BTC amount or a set USD amount, so you can choose which you're missing and diversify that way.  This is the best way to defend against being sad about dips or missing out on price increases.

^^ Yes that's why we can't blame CZ for not doing what they initially agreed upon with SBF.

Anyway, everything is clear now, it's already December and somewhat we have move over $17k and everyone now seems to accept that fact that another exchange has closed bringing the market it with. But bitcoin was able to recover and for sure there are buyers here when the price hits the bottom around $15k.

We should all look forward next year, and just continue to accumulate as much as we can and then prepare for the next bull run.

Binance couldnt buy FTX as I understand it, it would have brought too many problems with it and also greater scrutiny for a very large market share.   Perhaps slightly comparable to Lehmans which in theory could have been bought out a couple times over but was denied over various arguments.     Its a test like all others, the price being higher comes with main market involvement which quite a few years back now we didnt have, simpler times.
  I think some would have preferred we never got all these larger funds with their big foot steps treading all over the place.  It goes with the price, the interference and big news events so we dont get to step away and argue against it now as its part of the price gain that comes with a wider broader population of users.


I wonder if we have resolved this recent action upwards, momentum wise we are trading below almost all the moving averages so it cant be called positive.  However we do have a higher low

Yes, we're a lot but it's worrying that the thought of most that comes in on the market are thinking of not taking bitcoin because it's hell as expensive for them.
They already got the wrong thinking that it's expensive and doesn't see it for long term holding. Well, it's all about the experience and we all have experienced how great bitcoin is on these times to have and buy while it's dipping. It may tank and that's scary for them but that has to happen before it goes on another all time high. And, that's what most of them likes to see it only on the ATHs.

I think it was both negative and positive. Negative because it breaks the foundation that we already built for months. From $20k, we are down to $15k in just a couple of days but this is still positive because we can buy at this point. The op only said that this is "one of the most stupid" because he was aware that there are other events like this that cause the market to crash and one of it is already given by you and yes there will always be more to come.

Binance didn't buy FTX but they still have CoinMarketCap, Trustwallet and others. A lot of us still consider them as the monopoly of crypto. We are safe for now but not next time because I think binance will offer another exchange.

Yes, the event that triggered the downtrend was positive but I don't think this is the most stupid dip in Bitcoin history because the historical price of Bitcoin shows the bottom price of the market during a bear to be always triggered by positive events.

According to the historical price of Bitcoin. In November 2013 when BTC ATH was $1242 the market downtrend to $340 price which was said to be the lowest market price since the year 2012-2013 and the event was triggered by the Cypriot financial crisis.

Therefore, I don't this current bearish is the most stupid dip, and the last time I checked until all 21 Million is mine the market will always come with an event that's more stupid.

Just what happened last week is a quick reminder to us investors that don't keep too much money on exchanges because things like this can happen.

Stupid dip or not for some, I always like dips. We always like dips. Intelligent investors like dips for an obvious reason. We know that sentiment plays a big role towards every market. Binance not buying FTX was a positive for some but for most, it wasn't because they thought that it would be a good thing if CZ buys FTX and instead of the sentiment being positive, it went the opposite. This just shows that there are some investors who still can't understand what's happening and what can happen in the future.

Well, the dip that happened is like "another opportunity" to buy at a lower price. We all know what will happen in the next years .

Shouldn't be calling it a stupid dip. I mean, yeah, the events that unfolded did have some good outcome, but still... we shouldn't be ignoring events like this. No matter how much decentralization we want, people will still use centralized form of services to buy, sell or hold their coin since people always looks for the easy way. Maybe eventually people will go for decentralized organization when crypto currencies and how they work are  more well understood by regular/common people. But for now, we can't expect centralized exchanges to collapse like this. But if we look at the bright side, more people are now aware of the dangers of holding coin in centralized wallet/exchanges!

To me this is still quite doubtful, Binance wouldn't sacrifice its reputation and do a little thing like this, because I understand they are quite easy to make other than buying FTX. It's true, typical growing companies have a desire to dominate, but there is a negative side that they will get if they do this. Let's say Binance actually took over FTX, then what pattern can they do to restore FTX's reputation, since they had previously acquired and withdrew as Investors.

On the other hand, one would think that Binance is not credible in cooperating and should be wary of the exchange. (my assumption)

To be said to be the least surprising thing is probably right from your point of view. Hacking cases have the same impact, but not as great as the current collapse of a large company like FTX.

This should be something that can teach a lot of the self conscious about the safety of their funds just by having their own wallet. Now that quite a few FTX users are starting to feel the disappointment, it is possible that the same could happen for other exchange users in the future. So now people have to consider this: Reminder: do not keep your money in online accounts

People should really still mind off about the probabilities and now this event or situation did open up again their eyes that its never been safe or there's no such thing about being safe when you do make use of these

centralized platforms which isnt really that something surprising but due to time where there are ones who do really forgotten about the risk and now here we are.Its not really a stupid thing because dips or dumps

like these which are attached about exchange issues whether its hacked or rug pulls or something like that, then its never been something new.It is really just the community
just reacted too much on how this issue did really make out such impact or on how the way things happen.

We are crowded don't worry. There are a lot of people who understands how superior bitcoin is and buys and holds, there are over a million bitcoins all bought and held, all of them over a year at least and some of them over 5 year period, and still haven't sold.

So, even though we hear about all the crazy moves and crazy actions, believe me, there are a lot of silent people who are holding bitcoin for the long term and they are more crowded and they are richer combined because of that. That’s why it’s quite easy to forget sometimes all those people because they don't talk about how much they are holding, but all the losers from small altcoins do.

The thing about this dip is that it wasn’t stupid. The people causing it were idiot liberals who belonged nowhere near a functioning business, sure. However, the dip highlighted an ongoing problem with these made up tokens people are using as sources of value. Binance is no different with BNB, so this crash could just be the warning that companies like Binance are still being held together by a wish and a prayer. If BNB starts diving, make sure you don’t have any funds on Binance or the next collapse will get you.

I have some sympathy for your viewpoint, see this older thread (although I also recognize some few "good", decentralized altcoins, but 99,9% are shit).

And some solid, reliable, "only Bitcoin-to-fiat" exchanges would also be nice to have; I would also like (like I wrote in that thread) exchanges that only concentrate on coins which follow Bitcoin's model closely (no premine, no "team", no underlying business, no centralized PseudoDeFi etc.).

However, this particular dip had in my opinion not much to do with the altcoin ecosystem, in contrast to the Terra/Luna collapse. Basically it wasn't that different from the MtGox drama in 2014, and MtGox had only fiat and Bitcoin, no altcoins. It all comes down to bad accounting. The only part where altcoins played some role is that FTX did some auto-financing via the FTT token, and the FTT token collapse seems to have been the final blow for the business, although it may also have been the "bank run" the FTT token collapse and CZ's statements triggered. But the company was probably already having severe problems before.

What in contrast raises my eyebrows is the situation of crypto.com. If a big part of the holdings of that exchange (20%) is in a highly volatile joke coin (Shiba Inu) then something isn't right. And this has to do with the "altcoin inflation" problem. Of course, they may simply be holding the coins of their customers, i.e. SHIB holders could be "concentrating" on crypto.com, and who will hold SHIB in their non-custodial wallet? Probably close to nobody. But in the case of problems these coins will be probably become worth nothing.

Well, I do agree that most of these market-knee-jerk events have a positive undertone. Mt Gox taught people for the first time "not your keys, not your coins"... remember this was a time when even forum old hands like R. Ver was recommending exchanges to people. Bitcoin getting banned taught people to move to p2p. FTX and Terra taught people more of the same, Binance rejecting the suicide prevented a bigger monopoly yes...

But it was a negative reaction because when something implodes, the market reacts in proportion to exposure, as it always does.

Price, as we all know by now, in the immediate term, has little to no correlation with fundamental value.

Actually if people can't withdraw their coins on FTX or any other centralized party that collapsed, why Bitcoin price decrease? it should be increase right since when people lose their coins, it will make the other coins will become scarcer. But since the price is continue to decrease, I think many newbies think Bitcoin isn't a safe currency and they panic to convert their coins to fiat. This make people want to sold, rather than hold, right?

That's what happens if you are a bigger company. It would be more efficient to buy an existing business perhaps, 'coz it already has a name and target market population than to start a new one from the scratch right? Restoring the trust from FTX alone would be really difficult but if it would be balanced by another credible exchanger, then things would be somewhat easier. Anything under a good 'name' would be influenced or shared with one's charisma of being one with the bigger business or trade name, as an example. Things might have changed for FTX if Binance had it first, but it could also be worse to both Binance and FTX if the issue came first. Therefore stopping the plan, would be a better preventive measure for Binance and this industry as well.

With all of these exchange coins and native tokens, they can be dumped like shit in an instant. I just hope that people will learn the importance why most of the people here are suggesting to get bitcoin as much as they can.
In the end, us, who understands the importance and supremacy of having and owning bitcoin will still be the ones that will laugh at the end when most of them collapses and turns from great into lesser value.

The owners of Binance have the power to build more than FTX, why don't they do this instead of having to buy FTX, there is literally a much bigger issue yet to be uncovered, so Binance was forced to acquire and sell all of the FTT tokens. Or it could also be that Binance thinks that FTX is not running according to the target they set, so this cancellation is considered the right step for Binance.

It will be difficult for the exchange to restore trust, if the problems at hand are widespread and for this reason FTX will have a hard time restoring reputation.

For years people who criticized altcoins were branded as "maximalists" or "extremists". Time has proven that they were right, that the altcoin ecosystem, including exchanges, is unsustainable and does not produce anything useful. Bitcoiners should double down on drawing the line between "crypto" and Bitcoin. We need to have exchanges that are purely Bitcoin exchanges, they would only deal with Bitcoin and fiat, and not even the stablecoins will be listed. We should be criticizing "crypto" instead of saying "not all crypto is bad". Because it's only Bitcoin that is solid.

That is true partially. Some will leave. But those who stay, and I think that will be the immense majority, will learn how to "do crypto right". As we older folks learned when MtGox collapsed. I had never much money there, but was lucky to withdraw my last few dozens of dollars just before withdraws were cancelled. Now I don't store larger sums anymore at any exchange.

But I didn't refer so much to the first dip (22000 -> 18000) which occurred when rumours emerged that FTX was in problems. This dip was understandable and "rational", because it showed that at least some entities in the crypto industry sector didn't as well as they admitted (remember that FTX had a contract with a Formula 1 team, other sports teams etc., giving the impression that it was a big, established and trustworthy player).

The "stupid" part for me was when the price recovered when Binance was about to buy FTX (which would have been very bad for the crypto sector, as I wrote above) and then dipped again to new lows when this acquisition was cancelled.

By the way, it's interesting that the price didn't dip even deeper after insolvency was confirmed. That is indicating, for me, that the sentiment hit wasn't as strong as initially feared.

Regulation, or tighter observation, for exchanges, probably (like Gensler already announced). Which isn't bad for the crypto industry. Maybe also for DeFi (although more due to the Luna mess half a year ago). But Bitcoin itself isn't really affected by this - it was only the fault of a management of a for-profit entity which didn't do their homework right.

This is about unbacked stable coins pegged to the US dollar.

Has to be stopped. Or someone just prints a new stable coin loads up on btc and then kills off the exchange.

Stables coins along with quite a few Pos coins are bad news. nuff said.

This incident became a drama between CZ and SBF between Binance and FTX, and affected the bitcoin market very drastically.

At first, Binance revealed that it was going to buy FTX and this looked good enough to save FTX from being destroyed, but a few days later Binance canceled to acquire FTX due to recent reports of mishandled customer funds and alleged US agency investigations.

Being a drama of both parties but influential on the bitcoin market, became one of the most stupid bitcoin declines in history.

Even though CZ previously always posted motivational words on his Twitter but when this drama appeared CZ seemed to play this drama well. when what CZ tweets will have an impact on the crypto market.

another impact of this event was a drastic drop in coins and tokens on the Alameda Research Portfolio, such as SOLANA etc.
Alameda research website also cannot be accessed with Private Site status.

Organic growth is probably best but Im not sure the weakness is over despite the good recovery today.  I agree the reasoning to sell off was not especially valid but happened anyway and so now I expect we will have to explore these prices some more to be sure its established as a low.  However anything can happen, right this moment we are trading higher then the 2 day average pricing so thats pretty full positive price action to occur so fast.   Also the price now is about where the old support was, it might be a ceiling not sure.

I really thought of something like this, but as long as this crypto is trading at a price that never stabilizes then there is hope of making its investors rich. People are not wrong about wanting to get rich on crypto investing, but it has to be worth the risk so they really understand that if they can be rich they can also be poor.

To me crypto is a currency, but also a tradable asset. I can get freedom from that but also have to comply with government regulations. This can be interpreted differently for countries that legalize crypto as a means of payment, but I have to comply with the rules that apply in my country by not using crypto as a means of payment.

I don't think it's a stupid drop but rather it's a business setback in the cryptocurrency world where nearly 403k traders were liquidated in yesterday decline. We know that bad news and negative things that happen in crypto can have a big impact on the decline in bitcoin and altcoin prices. So I think the big setback was when cz published on twitter where he was going to sell the Ftt assets he received from ftx for their partners and this is the main problem for investors because they are worried that this round of decline will be worse than the terra luna incident and this  came true yesterday where Btc plummeted to a new low of the year.

Whether they like it or not, it's not crypto's fault that maniacs are throwing money and screwing around markets.

Really, whenever something goes wrong, everybody just goes and blames the developers:

- Algorithms are promoting biased stuff? Developers' fault
- AI discrimination? Developers' fault
- Some crypto service crashes? Crypto's fault (which is just a sneaky way of saying Developers' fault because they built the cryptos in the first place)
- etc.....

As industries become more centralized, so does blame. We find a small group of people being hit with a large amount of it.

---

Crypto was not created to make you rich. It was created as a freedom currency. Stop here for a moment and appreciate that guys.

People who come in here looking for wealth return disappointed, as in 99% of other industries.

It is not the most stupid one, I can tell you which one is the most stupid dip ever. Back in November 2018 or so, there was a war between BCH and Craig Wright. The creators of Bitcoin cash, roger ver and jihan wu if I am not wrong, wanted to keep the power of BCH in their hands, they wanted to control it, Craig Wright wanted to take the control of it, and he had a ton of bitcoins to attack it as well.

So, he sold tens of thousands of bitcoins, got a lot of money for it, paid a bunch of miners, and tried to take the control of it. He failed, but that sell of thousands of bitcoins caused it to drop even harder, and this was 2018 so it was already bear market. That one was the worst dip, and made no sense.

But you need to realise the sentiment right after. People lost tons of money with Luna, with 3AC, with Celcius, Voyager, etc. Now with FTX. Many are pissed off at crypto and they are just quitting and getting out. Its not good for adoption.

After this, even if prices don't dip. The retail adoption will be gone. They will most likely go back to stocks since at least with a stock broker, you can lose money on your investments BUT never on any cash you hold on the exchange. With crypto people lost money with investments which went down 90% and they lost 100% of their deposits which were in cash.

That and there is going to be more regulation from governments after this mess.

Yesterday would be example I will point at all my life why I decided to buy Ledger. Hardware wallets make sense. People should admit and stop using exchanges as inventory or wallet for money. No exchange is exploit proof and no exchange is truly honest.
I also agree with OP about current crypto situation. We dipped for tiny except FTT and maybe Solana and it may be like positive problem. (Problem which is gonna help our future positively)
I honestly never wanted Binance to buy FTX.

I tend to agree on this. People started panicking for... this, but.. some ideas:
* I agree that Binance not buying FTX is positive
* Binance not buying FTX was actually a normal/expected development
* removing one tumor out of the ecosystem should be a net positive
* I think that some big players decided to take advantage of the uncertain sentiment given by the fall of FTX and so many people probably losing money
* this leg down was expected by some in order to have a similar-to-previous-ones end of crypto winter (I hoped we won't get there)

However, I tend to HOLD and see what happens. We're still in the bear market, whether we like or not, whether we hoped or not that it has ended already.

Yeah, my bad. It's still in speculation but as of the moment they likely are committed to the community as they gave an update regarding on what coins are in their balance sheet.

The fact that FTX rise into the crypto space, it's really hard to imagine, but I guess they managed to have that trust-building mechanism from years they operated. The CEO was sponsoring huge stuffs but we may never know if it all comes from the users fund from the exchange. If this one failed in the course of the week, then I'd say a further capitulation wick is imminent.

That is possible, for sure. One could even suspect that Binance has triggered the whole drama with that outcome in mind (they get most of the customers without having to pay a penny), although I read today that their accusations to FTX which triggered the "bank run" two days ago were probably true. So I'm not so sure there.

Anyway I think the whole drama is likely to have a positive consequence which reduces the risk of similar events in the future, which you're mentioning yourself:

And I hope many do so. Exchanges should not be used to store coins. It is even good for exchanges if people use them less to "park" coins but to "trade", because a big amount of "parked" coins increases their security/storage costs (cold wallet management etc.) while not increasing their income (mostly from trading and deposit/withdrawal fees).

Of course, some trading strategies need a certain amount of "parked" coins (arbitrage, daytrading ...) but are they really that important for the Bitcoin ecosystem? And high-speed transfers for arbitrage are also possible with Lightning now, although the number of exchanges supporting it is still limited.

Trust in whom? The "crypto industry"?

This is for me the most relevant point. The crypto industry should only require minimal trust, as they're only a gateway between Bitcoin and the "fiat world" but not a necessary component of the Bitcoin ecosystem itself. Bitcoin was made to minimize trust at all levels of the financial system. I think, as a consequence of all the hacks and bankruptcies, the exchanges must prepare for a scenario where people have less trust in them, and this is good.

I hope that happens really and wasn't only a "marketing gag" by CZ. Exchanges without solid trust-building mechanisms should be ignored by the users. Learn - or close.

I imagine they pulled out upon looking at their books. I also imagine that a lot of exchanges are running at a deficit, because they're pumping money out of the company rather than keeping reserves in case of a sudden price change. Unfortunately, the people operating the businesses seem to want to line their own pockets rather than keep the company stable, and prepared for the worst. I'm not sure if it's because running an exchange attracts certain type of people or not.

Anyway, the point being FTX wasn't doing too well obviously, and Binance thought it would be unrecoverable or at the very least too expensive to recover. If they want to expand, they could easily create several sister companies, and operate under a different name on the surface.

Yes, CZ is already powerful and there are several individuals who doesn't like what they are seeing in CZ. And just imagine if he has acquired FTX, what will it be like in the future and what if Binance gets hack? Could be more catastrophic than what we are seeing right now.

Many lessons learn, but the number 1 thing that we have been preaching is that you don't left any crypto in any trading exchange. We have seen it in the past and many have lost their money. And again, it's a vicious cycle, just like what we have witnessed wherein millions were lost again in the FTX collapsed.

Maybe it will hit differently this time now that they made headlines? I mean, CZ itself has proposed that crypto exchanges should adopt Merkle-tree proof-of-reserves and not run on fractional reserves, this will really come to fruition. For sure the government will intervene in this issue maybe not this year but next year. Who would save FTX? I wish this didn't come to an end just like the Lehman Brothers.

FTX, Binance its all the same. All of them are not transparent about their reserve assets. With fake volume and market manipulation these exchanges earned millions of dollars but they can not show their full balance sheet to the community. We saw how FTT fall from 22$ to almost 0$. This all happens because of greed and mismanagement. It's time for all those exchange to implement proof of reserve so that same things never happens again.

You are mostly correct but i have few points:
1- I think that 60% of FTX users will go to trade on binance anyway. Its the best alternative. 20% will leave crypto because of being broke, 20% will chose coinbase, bybit etc. In the case where binance buys FTX i guess that not all FTX users would stay. So positive impact of not buying FTX (bigger decentralization) is not as strong as it may seams.
2- top 2 biggest crypto exchange just go bust. users will be left without founds. Its possible that we will see a "bank run" and collapse of other institutes. I have reduced my liquidity on exchanges by half. Many will do the same. Most likely volumes will go down, volatility. It will take years to recover trust. If binance would help FTX we, as industry, would recover much faster - unless FTX would drag the binance to the bottom with it

Yesterday, in several legs, the Bitcoin price dropped from around 18.500 down to 15.600 $, marking a new low for this bear market.

I call this the most stupid dip in Bitcoin's history (or at least one of the most stupid ones, there may have been others), because the event that triggered it was actually positive.

Basically the price dipped because Binance decided not to buy the struggling FTX exchange.

From the point of view of the "crypto industry", this may have been a negative event. Also, from the point of view of the FTX users. But we, the Bitcoin community, in reality were lucky with that outcome.

If Binance bought FTX, it would have become an enormous, almost monopoly-like, dominant exchange player. Binance would have become the new MtGox. And we all know what's wrong with that. They become single points of failure, and if they fail, then the ecosystem suffers much worse than a day the price tanked 15%.

This is also a good day to remind all Bitcoin users: Never park your coins on exchanges. Use them to buy and sell, and then withdraw them to your own wallet. Not your keys, not your coins! Or, even better, use decentralized exchanges - taking the necessary precautions.