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Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by bko on Wednesday June 15, 2022 @08:28AM (#31751961)
You don't understand. If they go bust, that's it. The goal is to get big enough by skirting regulation and then welcome it. Think about it, if the regulators tell them and how much they should hold in reserves, much like they tell the banks, they essentially bootstrapped themselves into too big to fail. In 2008 all the regulators were fine with CDOs rated triple-A and having the applicable capital ratings of a very safe asset. And when it all blew up, they stepped in and made sure no one went under and they could continue operating as they did in the past.

Fun fact, a lot of those CDOs were on bank's balance sheets and marked down during the crisis but recovered over the last ten years. Not recovered to par, but recovered significantly. So there still exists some trading in the asset and banks still hold a fair chunk of it. So what traders do is they steadily mark up the valuation of these assets to smooth out and boost their P&L, which affects their bonus (which is often times already in the millions). There's a treasure trove of interesting content in this lawsuit from a BAML managing director that sued for discrimination because her total comp was only 2 - 2.5 million a year. [0]

> Until recently, the secondary trading desk owned, along with CLO’s, $4 Billion on the BAML balance sheet of TruPS CDOs and ABS CDOs which positions were acquired during the 2008/2009 time frame. These positions have been mismarked for years in order to ensure P&L every year. Trepanier and his traders have daily fights about marks (where the bonds are priced) with Pricing (another department who marks the Bank’s securities to the market price). When going through their business after being promoted, Messina asked Trepanier about the marks he had on the Bank’s trading positions. Trepanier boldly responded, “It is an annuity so that the trading book produces revenue every year.”

[0] https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rCaslipP...

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by lancesells on Wednesday June 15, 2022 @08:07AM (#31751757)
The funny thing is two years ago BTC was under 10k. The sky is not falling it's probably just going back to a more sane price.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by sfe22 on Wednesday June 15, 2022 @08:24AM (#31751917)
12 years ago it was a penny. 12 years is not long when we are talking money, so…
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by lancesells on Wednesday June 15, 2022 @08:34AM (#31752037)
Agreed. I don't see any value in it.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by JumpCrisscross on Wednesday June 15, 2022 @09:13AM (#31752388)
> sky is not falling it's probably just going back to a more sane price

Prices per se are almost never meaningful.

Most crypto purchases are underwater [1]. (This is almost always true when something traded grows in value and buyers before crashing.) Many participants are leveraged. Financially, or operationally due to the cost of their mining rigs and long-term energy contracts.

There are also vagaries specific to PoW. For example, a steep enough decline between difficulty adjustments could make mining fundamentally unprofitable, which has its own suite of knock-on effects.

[1] https://www.bloomberg.com/news/articles/2022-06-14/bitcoin-r...

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by legulere on Wednesday June 15, 2022 @08:27AM (#31751947)
The question is: What is a sane price for bitcoin? I would say $0.00.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by epolanski on Wednesday June 15, 2022 @09:02AM (#31752280)
The fair price is where the curves of supply and demand meet.

That's what is "fair".

Otherwise we need to speak about "intrinsic value". And there's really no intrinsic value in Bitcoin, money doesn't have an "intrinsic value" against something else.

And if you want to argue that "but the technology!", then what can we talk about? Bitcoin's code is open source, if we launch our own coin does it have intrinsic value as well? Can we create endless new blockchains and create value out of thin air?

This is why I don't believe Bitcoin has a "fair" price, to have it, it would need to have a value and then the loop begins again.

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by olalonde on Wednesday June 15, 2022 @09:11AM (#31752362)
Bingo. A lot of people mistakenly conclude that Bitcoin's "fair value" must be 0 because it lacks an intrinsic value. But they fail to realize that fiat money also lacks an intrinsic value. Even gold to a large extent lacks an intrinsic value in the sense that its intrinsic value is a negligible fraction of its actual market value.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by nradov on Wednesday June 15, 2022 @11:25AM (#31754402)
Intrinsic value (or fair value) is a meaningless concept when applied to currencies. The US dollar has value because the US government maintains a fairly effective monopoly on violence over a large chunk of real estate. They require residents to pay taxes in that currency, and if you don't pay then the government will seize your assets by force. Overall this system works pretty well.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by arbitrage on Wednesday June 15, 2022 @09:28AM (#31752572)
You're close. Fiat money has value when it's backed by something. The US$ is backed by the US government. It's still fiat money.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by olalonde on Wednesday June 15, 2022 @09:56AM (#31752940)
It is "backed" as in endorsed, or supported, by the US government. In the same sense that Bitcoin is "backed" by its many worldwide supporters and miners. It is not "backed" in the traditional meaning of being redeemable for something else at a fixed rate ("backed by gold", "backed by silver", etc.).
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by legulere on Wednesday June 15, 2022 @01:06PM (#31755976)
The intrinsic value of fiat money is that I can pay my taxes with it and avoid persecution by the state.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by evdubs on Thursday June 16, 2022 @06:47PM (#31771962)
A fair value for Bitcoin at the moment is ~$42,000.

https://www.coinfairvalue.com/coins/bitcoin/

> What do you mean by "fair value"?

https://steemit.com/bitcoin/@pablomp/cryptocurrencies-what-i...

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by pmyteh on Wednesday June 15, 2022 @09:06AM (#31752321)
Clearly greater than zero, if only for the novelty value. What are Zimbabwean $100trn bills going for on eBay these days?
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by Grimburger on Wednesday June 15, 2022 @08:29AM (#31751974)
You can bet on that happening over long periods. Shorting the 2024 bitcoin price isn't hard at all for a consumer.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by ABeeSea on Wednesday June 15, 2022 @08:41AM (#31752110)
You can only short bitcoin on exchanges that are internally betting on increasing crypto prices. Not exactly a fair market maker.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by Grimburger on Wednesday June 15, 2022 @09:47AM (#31752810)
https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bi...

CME? The same place I can bet up or down on soybeans next year?

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by JumpCrisscross on Wednesday June 15, 2022 @09:14AM (#31752396)
Also an unlikely party to pay out should you win.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by ipaddr on Wednesday June 15, 2022 @11:47AM (#31754777)
I would take all bitcoin available at that price and so would others.. not really a sane price
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by cloutchaser on Wednesday June 15, 2022 @08:37AM (#31752076)
As opposed to USD, which is awesome and regulated and hasn't been doubled in supply in the last year, and has around 15% inflation using 1990s CPI metrics...

Either way, you're fucked. Buy property I guess...?

Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by ClumsyPilot on Wednesday June 15, 2022 @08:42AM (#31752120)
Supply is less relevant to inflation than velocity of money
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by cloutchaser on Friday June 17, 2022 @03:54AM (#31775327)
We will find out very soon if your MMT theory is right
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by sneak on Wednesday June 15, 2022 @08:08AM (#31751762)
The SEC regulates securities in the US; Tether Limited is a Hong Kong company.
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by seanhunter on Wednesday June 15, 2022 @08:44AM (#31752152)
The SEC regulates any security issued by any company which is offered to US investors (is my understanding). If you allow US investors to buy something and the SEC deems it a security, they regulate it and you have to abide by their regulations or there can be enforcement actions. You don't get to escape jurisdiction by putting your business outside the US. For example, here is the SEC's guidance for "foreign private issuers" https://www.sec.gov/divisions/corpfin/internatl/foreign-priv...
Re:Terra Luna crash: CTO of Tether welcomes fair regulation ... by sneak on Wednesday June 15, 2022 @09:19AM (#31752452)
Yes I understand that the securities law in the US has not yet evolved (and indeed has no way it could) to cope with ERC20s yet.