by Colback's Orange Tufts » Sat Jan 06, 2018 3:04 pm
Sir Bobby wrote:Colback's Orange Tufts wrote:People are making massive unrealised gains, but the spread (difference between quoted price and what you can sell for) is huge.
Also with the exchanges it's easyish to sell into your account (ie Coinbase), but to move that money into traditional currency very hard. Coinbase has a limit to the withdrawals per day ($20 at some point). Or not to your country. Our for KYC you have to provide ID/proof of address.
When you buy a fraction of bitcoin, as the exchange really ever bought any? If you have a whole one, you can check the ledger. But coinbase can't give you the hash for a coin you own a fraction of (or you'd own it), so no way to check. So Bitcoin was made to get around banks that ppl didn't trust. Instead you trust unregulated entities, like Mt Gox. That went well.
Your first point about the spread (assuming I’m understanding your point correctly) is definitely true but moreso with purchasing than selling I’ve found. As for withdrawing money, using Coinify I’ve not had any issues with taking out £1000+ in one day; less sure about Coinbase since I’ve never actually taken money out of that account. If you’re right about coinbase though I might stick to my coinify despite it being less slick and only allowing smaller purchases (£200 per day in instant payments)
Fair enough. Can't say I've heard of Coinify.
Even if the exchange is trustworthy, how do they acquire the underlying at the right price with the volatility. Say you get buy orders totalling 50% of one bitcoin at $15k. Do you buy one at that price? If then half an hour later you get orders for the next 50% and the price is at 13k, you either reject order until the price goes up, or have to take a 2k hit.
Since the overall trend has been going upwards, exchanges make profit out of this. But won't always be the case.
In the world of equities, ETF/passive providers have this issue. They get around it with huge liquidity and due to the relatively low volatility in stock market indices. But if you buy some exotic/low liquidity ETF you get charged higher fees for this issue.
[quote="Sir Bobby"][quote="Colback's Orange Tufts"]People are making massive unrealised gains, but the spread (difference between quoted price and what you can sell for) is huge.
Also with the exchanges it's easyish to sell into your account (ie Coinbase), but to move that money into traditional currency very hard. Coinbase has a limit to the withdrawals per day ($20 at some point). Or not to your country. Our for KYC you have to provide ID/proof of address.
When you buy a fraction of bitcoin, as the exchange really ever bought any? If you have a whole one, you can check the ledger. But coinbase can't give you the hash for a coin you own a fraction of (or you'd own it), so no way to check. So Bitcoin was made to get around banks that ppl didn't trust. Instead you trust unregulated entities, like Mt Gox. That went well.[/quote]
Your first point about the spread (assuming I’m understanding your point correctly) is definitely true but moreso with purchasing than selling I’ve found. As for withdrawing money, using Coinify I’ve not had any issues with taking out £1000+ in one day; less sure about Coinbase since I’ve never actually taken money out of that account. If you’re right about coinbase though I might stick to my coinify despite it being less slick and only allowing smaller purchases (£200 per day in instant payments)[/quote]
Fair enough. Can't say I've heard of Coinify.
Even if the exchange is trustworthy, how do they acquire the underlying at the right price with the volatility. Say you get buy orders totalling 50% of one bitcoin at $15k. Do you buy one at that price? If then half an hour later you get orders for the next 50% and the price is at 13k, you either reject order until the price goes up, or have to take a 2k hit.
Since the overall trend has been going upwards, exchanges make profit out of this. But won't always be the case.
In the world of equities, ETF/passive providers have this issue. They get around it with huge liquidity and due to the relatively low volatility in stock market indices. But if you buy some exotic/low liquidity ETF you get charged higher fees for this issue.
