Topic: The Wall Street Myth - page 2. (Read 2486 times)

I don't think there will be any serious buy and hold movement by big financial firms. But I do think it's likely some companies will dip their toe in, and in a $100 Trillon+ derivatives market, that may be a big toe. The global CDS market alone is worth $25 Trillion, and bitcoin has a major advantage over CDSs because it has no counterparty risk, so it has the potential to be very valuable during credit shocks. This is, a least, one of the main reasons why I am invested in bitcoin.

I think a nice summary is that investors buy and hold, speculators buy and sell - Wall St speculates!

piramida cuts to the crux:

ETF legitimises btc as a currency/commodity to trade, as well as increasing liquidity. I think people that *have* bitcoin are already equipped with the means to sell. I think people that don't have bitcoin will benefit from this new vehicle for buying purposes. Which puts upwards pressure on the underlying.

The big question is how much, and in this regard the above quote makes me optimistic.

I think he has a valid point

ultimately it's their loss though

it's actually more risky to wait until bitcoin has already established itself, rather than taking a certain profit now.

but that's not the way investors think.

Yes right that's why they never pumped google 10x from the IPO price. Of course it will be up-n-down just like it goes now, with pumps and dumps along the way - that won't change - what will change is the exposure to the world of limitless fiat, which is pretty thin now. Once you connect a limitless fiat pool with a limited bitcoin pool, closed feedback loop will quickly move the price to infinity.

I agree with this quote. Plenty of people here expect Wall St big city slickers to throw limitless money at bitcoin and then HODL. Wall St big city slickers don't operate like that.

I agree with the general description of pairs trading, statistical arb etc, with max leverage applied, being the way a lot of banks make their money on the proprietary side. It looks relatively risk free on the balance sheet and is not capital intensive.

There are however also guys 'swinging the bat' with big, directional , swing trades. BUT again, they use leverage ...

So yes, I agree that buy and hold from the street is unlikely. Hedge funds mostly operate on the same principle. Leverage, leverage, leverage.

On the retail side, it's about what products can be packaged and sold to investors, often in an attempts to reduce the risk they have taken by committing capital to hedge funds to 'service' them. So they try and palm off the other side of the hedge fund trade on Joe public lol

So until there is actual retail demand for BTC products that they can take a cut on (like an ETF), no, other than very specialised hedge funds, I don't see much raw demand from the banks themselves. Never did.
The public need to be demanding exposure to an underlying, or a bank need a sucker to offset their own existing risk in order for them to get involved.

So it comes down to 'how much demand will their be  for an/the ETF ?' and as you say, in the current long term bear market, that is very much open to question, and I agree with your conclusion that it could take longer than expected.

Right. The point of Liu's post is that Wall Street firms themselves, with their own money, will probably never be the "next group of investors", and will most likely only get in once volume allows them to do their usual tricks.

About the point you make: It's alluded to in the part I quoted actually, as "offsetting risk to retail investors".

But that's another question: how likely is it that a massive vehicle for retail investors (like the ETF, or the existing funds) is going to pump up price all by itself, especially in a persistent bear(ish) market?

In my opinion, it's going to matter eventually (as a huge "fiat flood gate" for the next price jump). But the timing of that next price jump could be much farther into the future than most in this forum seem to believe.

When I see 'wall st' in the context of 'is driving the next bubble', I don't think of wall st trading outfits I think of it more like its the ability for mom and pop investors to get into bitcoin via 'wall st' e.g. ETF.

Then, by default wall st starts making money, as they always have done, by front-running, skimming fees, margin calls etc etc

So I agree that wall st in the classical sense won't be buying and holding.

from: http://jackcliu.com/post/97546140332/why-wall-street-has-yet-to-enter-bitcoin


There's this persistent idea that "Wall Street" is going to "drive the next bubble". Alternatively that idea is expressed as "once big money arrives" (we're going to the moon).

Just finished reading this post by Jack C. Liu, and I wanted to share it here because it puts into not-too-many words what I've been thinking myself for a long time now: don't count on Wall Street to drive the next price jump.

I'm sure you will (correctly) point out that this Liu guy is just another dude with an opinion. Absolutely true. I'm not claiming this post is interesting because of deep insider knowledge. It is interesting in my opinion because it makes sense.

Let me know what you think.