Let's Discuss Bitcoin

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody


cramer said:

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody

You don't "hold" crypto.  You have an ID and a password. It's like saying that someone is "holding" your ATM card, and uses it to transfer funds.  If too many people say, "Give me my money" to Coinbase, and they don't have it, I don't know what protection the "fiduciary" relationship will give the customers.


nohero said:

cramer said:

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody

You don't "hold" crypto.  You have an ID and a password. It's like saying that someone is "holding" your ATM card, and uses it to transfer funds.  If too many people say, "Give me my money" to Coinbase, and they don't have it, I don't know what protection the "fiduciary" relationship will give the customers.

Yes, you're rght. I opened a small (very small) bitcoin account with PayPal a couple of years ago. I haven't looked at. 

https://www.cnbc.com/2021/05/05/investing-in-bitcoin-with-paypal-what-you-should-know.html


yahooyahoo said:

PeterWick said:

Jasmo said:

Only up to $250,000 
max_weisenfeld said:

BarneyGumble said:

I wonder how many people know that they’re unsecured creditors as against the funds in their Chase savings account too.

Except those funds are federally insured

For some perspective, I cannot imagine ever being in a place where we would ever have anywhere close to that $250,000 ceiling. But then, that makes one even less likely to dabble in anything besides stable coins that are supposed to stay pegged to the USD.

When one reaches $250K, you open a second account.

Make sure it is at another bank, as the limit is not per account but per institution


Or under another identity


Or a joint account.


Some more 5k BTC would be lovely. In my few years of crypto trading I think my favorite new word is ponzinomics.. 


https://www.cnn.com/2022/06/13/investing/bitcoin-price-celsius/index.html

Bitcoin plunges below $24,000 and the crypto meltdown claims another casualty

By Anna Cooban, CNN Business

Updated 12:12 PM ET, Mon

London (CNN Business)Bitcoin and other cryptocurrencies plunged Monday, and two of the world's biggest cryptocurrency platforms restricted activity as the market meltdown continued apace.

The Celsius Network, which has 1.7 million customers, said that "extreme market conditions" had forced it to temporarily halt all withdrawals, crypto swaps and transfers between accounts."We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets," the company said in a blog post.

    The UK-registered company has about $3.7 billion in assets, according to its website. It pays interest on cryptocurrency deposits, and loans them out to make a return.

      Binance, the world's biggest cryptocurrency exchange, suspended withdrawals on its bitcoin network for a few hours on Monday.

          The company said it made the decision because some transactions had gotten "stuck" and were causing a backlog


          It's still around $23,000 overvalued.


          jamie said:

          It's still around $23,000 overvalued.


          jamie said:

          It's still around $23,000 overvalued.

          But imagine, when this thread started, bitcoin was under $1K. If you had nerves of steel, you could have a lot of money right now--in theory--and even more a couple of months ago.


          It is difficult to stay with such an investment but zooming out as Karen mentioned, you can see how its value has risen in spite of its volatility. There is a lot of complexity to it but things like the halving cycle and its scarcity still hold true. The way it has been treated like a commodity to speculate on has been disappointing but we're living here on earth, with humans, so it is what it is.


          The way BTC has fallen in value in a time of rising inflation and stocks declining across the board suggests it really is just a commodity and not "digital gold" -- not even a useful inflation hedge, just another thing you can buy and sell on the market that happens to have an interesting technological implementation.


          I do regret not buying 100 shares when it was $30.  

          I always saw it as an alternate currency and payment method.  Not as an investment.

          You also had a lot of people touting it will go to $100,000 when it was $60,000.

          I guess time will tell.


          Sure, but that's true for any stock that does well. The trick is to know that ahead of time ;-)


          More good news in the world of cryptocurrency.

          https://www.yahoo.com/finance/news/ftx-crash-wipes-billions-binance-buy-crypto-rival-165845095.html

          Binance has swooped to rescue "and acquire" cryptocurrency exchange FTX, after tweeting on Sunday they were liquidating their holdings in the beleaguered exchange's native FTT (FTT-USD) token, which caused an early week bank run.

          The FTX cryptocurrency token plummeted on Tuesday, with over 40% wiped from its value in the last 24 hours, causing a route across crypto markets as contagion fears spread.

          Panic is reverberating through crypto markets as investors fear another meltdown similar to that which crashed crypto hedge fund Three Arrows Capital in July.



          Bitcoin down to a 2-year low in the mid-17000s.

          Price is now lower than it was in December 2017.

          Buying opportunity or reality check?


          It's amusing and alarming how chicanery in the crypto world invites karma to dinner. Unfortunately the market is immature and so many assets apparently unrelated to the real losers can also (FTT and Solana in this case) take a huge hit. 


          FTX is on the cusp of bankruptcy.  Just last year, their stock price was ~$73 and now it's in the range of $3.

          They need a multi-billion dollar bailout from outside investors.

          https://finance.yahoo.com/news/ftx-hurtles-toward-bankruptcy-8-100849312.html



          FTX filed for bankruptcy.

          Sam Bankman-Fried stepped down as CEO.  He was tech bro royalty and "worth" tens of billions. Not anymore.


          There's something about a 20-something guy in shorts and a t-shirt who needs a haircut being the star of an "industry" that just screams bubble.

          Just FYI though, FTX doesn't have a publicly traded stock, which is a good thing because not many people other than crypto bros and private owners of FTX got hosed. The FTX thing that fell from $73 to $3 or less is a "token", whatever the heck that is.   


          Smedley said:

          There's something about a 20-something guy in shorts and a t-shirt who needs a haircut being the star of an "industry" that just screams bubble.

          Just FYI though, FTX doesn't have a publicly traded stock, which is a good thing because not many people other than crypto bros and private owners of FTX got hosed. The FTX thing that fell from $73 to $3 or less is a "token", whatever the heck that is.   

          Thanks for the clarification.  This is what I found about tokens:
          A token is a digital unit of value that represents an asset or utility. Unlike coins, tokens do not have their own blockchain and are issued on top of existing networks. Unlike coins, tokens are not mined in the process of transaction validation. Instead, they are minted.


          Smedley said:

          There's something about a 20-something guy in shorts and a t-shirt who needs a haircut being the star of an "industry" that just screams bubble.

          Just FYI though, FTX doesn't have a publicly traded stock, which is a good thing because not many people other than crypto bros and private owners of FTX got hosed. The FTX thing that fell from $73 to $3 or less is a "token", whatever the heck that is.   

          Someone's going to jail, but it isn't this young man. It's the backers who made him the front, did no due diligence, and lied to everyone about how the plan worked.


          dave said:

          Smedley said:

          There's something about a 20-something guy in shorts and a t-shirt who needs a haircut being the star of an "industry" that just screams bubble.

          Just FYI though, FTX doesn't have a publicly traded stock, which is a good thing because not many people other than crypto bros and private owners of FTX got hosed. The FTX thing that fell from $73 to $3 or less is a "token", whatever the heck that is.   

          Someone's going to jail, but it isn't this young man. It's the backers who made him the front, did no due diligence, and lied to everyone about how the plan worked.

          Maybe. I don’t know enough about the rise and fall of FTX to have an informed opinion on what happens from here, to be honest. I’m just glad 50-year old me was skeptical about the whole crypto craze, because 25- or 30-year old me most likely would have been involved, and hosed. 


          dave said:

          Smedley said:

          There's something about a 20-something guy in shorts and a t-shirt who needs a haircut being the star of an "industry" that just screams bubble.

          Just FYI though, FTX doesn't have a publicly traded stock, which is a good thing because not many people other than crypto bros and private owners of FTX got hosed. The FTX thing that fell from $73 to $3 or less is a "token", whatever the heck that is.   

          Someone's going to jail, but it isn't this young man. It's the backers who made him the front, did no due diligence, and lied to everyone about how the plan worked.

          My guess is that he will be treated differently than Elizabeth Holmes.  The tech bros will protect each other.


          $2 - 10B os missing. Somebody gotta pay for that. Many of the "victims" are/were wealthy. It will not be ignored.


          2008, the only person in the slammer was some poor slob in Wells Fargo. Then came Bernie Maidoff. How problem was that he ruined the lives of rich people. 


          In Bernie Madoff's case, much of the lost dollars of the relatively innocent victims were recovered through the funds of wealthy investors and/or institutions, who were complicit by knowing about, or aiding Madoff's scheme by turning a blind eye to it.  Perhaps if similar complicit individuals or institutions can be documented or traced in this case, some of the funds can be recovered; although it may be harder to nail them down.  

          Another issue might be the actual market value of the missing units.  In Bernie's case the market value had gone up considerably from when some of the money was first invested (although much never actually put into the market), whereas here that might not be the situation.

          Formerlyjerseyjack said:

          $2 - 10B os missing. Somebody gotta pay for that. Many of the "victims" are/were wealthy. It will not be ignored.

          2008, the only person in the slammer was some poor slob in Wells Fargo. Then came Bernie Maidoff. How problem was that he ruined the lives of rich people. 


          Formerlyjerseyjack said:

          $2 - 10B os missing. Somebody gotta pay for that. Many of the "victims" are/were wealthy. It will not be ignored.

          2008, the only person in the slammer was some poor slob in Wells Fargo. Then came Bernie Maidoff. How problem was that he ruined the lives of rich people. 

          https://www.cnn.com/2022/11/12/business/ftx-missing-funds#:~:text=At%20least%20%241%20billion%20of%20customer%20funds%20have%20vanished%20from,Research%2C%20the%20people%20told%20Reuters.

          At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter.

          The exchange’s founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried’s trading company Alameda Research, the people told Reuters.

          A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.


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