Bitcoin as the world's biggest game of hot potato: https://prestonbyrne.com/2017/11/26/the-bear-case-for-crypto-part-ii-fractional-reserve-marmot/ … @prestonjbyrne
Liquidity crunch catalyzed by any disruption in the price would cause a bank run.
-
-
This turns non-imperiled exchanges into imperiled exchanges, quickly. The technical term is "contagion" and the way to avoid it is *drumroll* "temporarily freeze withdraws."
Show this threadThanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Before MtGox went bankrupt the MtGox BTC price went up (opening a spread with other exchanges), because users were trying to get the money out of the exchange in crypto rather than in fiat.
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
This assumes your exchange is running a fractional reserve. Not being able to exchange is different than not actually owning the BTC it says it has, right?
-
There are multiple hops to get out of BTC and into fiat if you’re trading on some of the world’s biggest exchanges. Much of the world doesn’t yet realize the biggest “dollar” denominated exchange has effectively been engaging in QE.
- 1 more reply
New conversation -
-
-
Do you think we’re already seeing the onset of this with current price action + the insolvency of tether?
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.