Tether: Heads I Win, Tails You Lose

Tether is the entity that issues and manages the USDT stablecoin. The “entity” wording is key: although Tether is incorporated as a Hong Kong company, its offices don’t seem to exist at the filing address, its CEO and CFO are M.I.A., and the bulk of communication is performed by its CTO, Paolo Ardoino. USDTs are […]

The Tether Press and Bitcoin’s Speculative Mania

Tether has become a plain old fiat central bank, issuing new USDTs against debt. USDTs are backed, but not by US dollars. They are backed by promises to make good on their debts by the receivers of newly minted USDTs. While it’s not fraudulent per se, the fact that USDTs aren’t backed by US dollars […]

Bitcoin is not a literal Ponzi scheme

In a tweet that has been celebrated by the Bitcoin community worldwide, Stephen Palley (who is a lawyer and knows a lot about crypto, inside and out), ruled: Bitcoin is not a Ponzi. Bitcoin is “literally” not a Ponzi scheme. Ponzis are an investment fraud where fraudsters pay old investors w/ new investor $$, unknown […]

Bitcoin Extreme Price Move Tracker

To give you an image of how often Bitcoin’s intraday price is out of whack, I’ve pieced together this simple Javascript tool that annotates every 1-minute candle that’s longer than 5 standard deviations, or “sigmas”. It’s a small follow-up to my last piece, “Price Moves Show Bitcoin Is A Penny Stock“. It’s dynamic, too, so […]

Price Moves Show Bitcoin Is A Penny Stock

“The Bart” is a commonly known pattern in Bitcoin charts, to the point of having become a meme on Twitter and reddit. It’s a figure formed by sudden moves in Bitcoin price, followed by period of relative calm. “The Bart” has become a joke among Bitcoin critics, who point to the Bart as evidence that […]

Why Is Bitcoin Worth Anything At All, Part II

In the first part of this long post, I’ve identified three instances where Bitcoin was used for transactions, namely: pizza, drugs, and ICOs. I’ve postulated that the transactional nature of Bitcoin doesn’t confer it any long-term value, but instead creates speculative bubbles due to long transaction periods, and the price inelasticity of demand for transactions. […]

Why Is Bitcoin Worth Anything At All?

Despite all the hype, speculation and FOMO, nobody got close to a credible valuation model for Bitcoin. Those who, like Tom Lee, claim that “Bitcoin is worth X dollars”, usually simply run a regression of Bitcoin’s price against a few variables, and pretend that correlation equals causation. To come up with a valuation model for […]