Bitcoin’s Berserker Run Resumes After Exchange Breaks; Novogratz Says “Not Close To The End"

Tyler Durden's picture

Bitcoin is extending its gains after the 25-minute shutdown on GDAX...

*  *  *

Mike Novogratz - self-described as the "Forrest Gump of Bitcoin" - is on the wires calling Bitcoin a "cultural revolution."

"The world is in blockchain speculative phase... not close to the end of the speculative phase"

 

Novo added that Bitcoin futures will give rise to ETFs and even broader adoption and a "sell-off after the speculative phase is complete."

 

"Cryptokitties will be a fad"

 

"It's hard to mitigate volatility risk in Bitcoin"

 

Novogratz says "banks will be slow to move into the industry and doesn't see quick adoption of Bitcoin as a currency"

 

For now he has 25% of his net worth invested in Bitcoin/Blockchain and warns investors to "be careful" in non-Bitcoin tokens.

GDAX is back up after a 25 minute 'glitch'... and Bitcoin is rebounding

*  *  *

GDAX just broke...

Additionally, Bitfinex says it is under a significant denial of service attack.

As Bitcoin tumbled $4,500 from its highs...

 

And now the giveback...Bitcoin is down $3000 from its $19,600 highs...but is still up 30% on the day

 

Bwuahahaha... $19k...on GDAX

After tagging $19,697, Bitcoin prices tumbled to $17,900...

Prices are varying dramatically across exchanges with $2000 differences.

For those keeping track, this is how long it has taken the cryptocurrency to cross the key psychological levels:

  • $0000 - $1000: 1789 days
  • $1000- $2000: 1271 days
  • $2000- $3000: 23 days
  • $3000- $4000: 62 days
  • $4000- $5000: 61 days
  • $5000- $6000: 8 days
  • $6000- $7000: 13 days
  • $7000- $8000: 14 days
  • $8000- $9000: 9 days
  • $9000-$10000: 2 days
  • $10000-$11000: 1 day
  • $11000-$12000: 6 days
  • $12000-$13000: 17 hours
  • $13000-$14000: 4 hours
  • $14000-$15000: 10 hours
  • $15000-$16000: 5 hours
  • $16000-$17000: 2 hours
  • $17000-$18000: 10 minutes
  • $18000-$19000: 3 minutes

Coinbase is struggling to keep up...

*  *  *

 

Update: $18,000, that is all!

*  *  *

Update: WTF! $17,000...

We do note that GDAX pricing appears to be at a significant premium to several other exchanges.

*  *  *

Update: Bitcoin just surpased $16,000... speechless...

*  *  *

In the last 36 hours, Bitcoin has blasted through $12,000, $13,000, $14,000, and now $15,000 levels in an unprecedented 28% surge...

With a market cap of around $250 billion, Bitcoin is bigger than Proctor & Gamble and approaching the size of Wal-Mart as the 12 biggest 'company' in the S&P 500.

As CoinTelegraqph reports, the price is likely being driven by news of the imminent launch of Bitcoin futures trading. CBOE will be launching their futures market this coming Sunday, December 10, with CME Group following on December 18. Nasdaq plans to launch futures trading in the summer of 2018 and Japan’s Tokyo Financial Exchange is preparing to launch futures trading as well.

Bloomberg has announced that brokerage firms TD Ameritrade and Ally Invest will be offering Bitcoin futures trades to their clients. Even J.P. Morgan Chase may follow suit, despite CEO Jamie Dimon’s infamous views on the digital currency.

GDAX, Coinbase’s digital currency exchange, has been leading the rally all day. The price on GDAX is currently about $500 ahead of other Western Bitcoin exchanges. The likeliest - and most bullish - explanation is that Coinbase is the easiest way for new Bitcoin investors to get involved. Consequently, when GDAX leads the charge as it has today, it probably means new “retail” investors are fueling the rally.

Meanwhile, as CoinDesk reports, Ron Paul wants to know: would you take $10,000 in bitcoin, cash or something else?

The former U.S. Congressman from Texas is currently holding a poll on his official Twitter account that asks in which form they would take $10,000 from a "wealthy person". The catch: you can't get rid of it for 10 years.

Paul – who earlier this year called for the U.S. government to "stay out" of bitcoin – put the question to his more than 650,000 followers, asking if they would take $10,000 in the form of bitcoin, dollars, gold or 10-year U.S. Treasury Bonds. The result thus far – one hour remains in the poll at press time – indicate that of the more than 70,000 responses, 54 percent expressed support for bitcoin.

Gold took the second-highest amount with 36 percent, followed by a mere 8 percent for the 10-year bonds. Just 2 percent indicated that they would take the Federal Reserve Notes if offered.

Speaking with TheStreet in October, Paul conceded that he's no expert on cryptocurrencies (back in 2014, he argued that bitcoin wasn't "true money"). That said, he voiced his support for cryptocurrency in the most recent interview, arguing that it lends credence to the emergence of alternative currencies against the U.S. dollar.

And while Bitcoin's eye-popping price movements have some observers saying the market is in bubble territory, Naval Ravikant, the co-founder of AngelList, while he's not ruling it out entirely, holds a less alarmist view.

"Money is a bubble that never pops," he said at yesterday's Token Summit II in San Francisco.

He told attendees:

"It's a consensus hallucination."

And speaking to the newfound attention to bitcoin, Ravikant said people are interested in growing the wealth that they have. With most savings accounts returning zero these days – as central banks conduct what Ravikant called their "grand money printing experiment" – the general public is looking for alternative places to store their money and watch it grow.

Bitcoin and other protocols seem to offer that, as even the less-developed cryptocurrencies are showing substantial returns.

"I think people are looking to solve their money problems," he said.

Additionally, Coindesk notes that the former chairman of the U.S. Federal Reserve, Alan Greenspan, has joined the many financial luminaries to recently criticize bitcoin's value.

Speaking to CNBCGreenspan compared bitcoin to that of an early American form of money called "Continental currency" that came into use in 1775 and had become worthless by 1782. The paper-based legal tender was used at the time of the American Revolution and was not backed by a commodity such as gold.

Noting that bitcoin will likely suffer similar fate, Greenspan said that a "significant share" of  Continental currency was still used to create "real goods and services," even though it had no ultimate worth.

He continued:

"Bitcoin is really a fascinating example of how human beings create value, and is not always rational ... It is not a rational currency in that case."

Greenspan's comments come as the value of a bitcoin is soaring beyond most expectations, having gained thousands of dollars in value in the last two days.

And in response to that...

And finally, for those calling this a "bubble" - we would humbly suggest you ain't seen nothing yet...

 

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tmosley's picture

The delusion is real.

malek's picture

"My calls were spot on."

tmosley's picture

Yeah, they were. How's your silver doing?

malek's picture

As many oz. as yesterday.

How are your get-rich-quick schemes doing?

tmosley's picture

Much better than yours ;)

IOTA remains the future, even if it isn't ready for prime time yet.

malek's picture

Right up to when it gets replaced - "the future will be better tomorrow"

tion's picture

The data marketplace they are collabing on seems very interesting to me.  I am curious to see how the cryptos that have utility outside of the 'currency' aspect evolve as some provide service/utility on a b2b that is paid for by businesses.  How does all this effect the price of a unit? Does it become like a stock? WHAT HAPPENS TO THE PRICE IF A COMPANY LIKE IBM BUYS THEM OUT to make some sort of IOTA/Watson baby? Could we potentially lose all of our units without compensation?

bluez's picture

I think what mnewn is actually thinking is that he would have to spend about a month studying cryptocoin theory before dealing with it. I know more about crypto than many, but I would still spend a month. Not everybody wants to do that. Since I don't know much about cryptocoin, I don't understand much of what you are saying, tmosley.

tmosley's picture

I see the class has learned nothing.

Maybe Scott Adams is a better teacher than I am: https://www.youtube.com/watch?v=DVAY-R5_uZ0

Spaced Out's picture

Don't believe a word he says. I've cashed out almost $200,000 from btc in the last 6 weeks. Moron Mosley bought a coin that doesn't even have a functioning wallet.

You can get out if you know what you are doing :D

greenskeeper carl's picture

Hard to get your BTC to any of those places to trade it for gold if you have it somewhere like coinbase and their shit doesn't work. I put my first little bit of money in at 9500, and was planning on selling enough btc around 18-19k to get my initial investment out, and leave my winnings in there and just see where the fuck all this goes. Got onto coinbase a little over 18 and could not even get the sell page to load. That would have been scary as shit if it was a lot of money I had in there. Im just dumb money gambling here, so about all I will do if I get cleaned out is think about how I should have just bought more boring silver with the money, but if this wall street involvement brings even more people in, specially people like me, its hard to picture how these exchanges are going to function.

Spaced Out's picture

"thumb up your ass"

Don't project your disgusting habits onto others you fucking pervert.

maxblockm's picture

What do you consider MAJOR? 

20k to 16k is 20%

hmmmstrange's picture

A group of us are sending around 1 satoshi with lightning on the mainnet for free right now. Instant free transactions!

maxblockm's picture

You might be waiting a long time. Longer than you live.

loves the truth's picture

Its in the mania stage now,,, it will blow off and lots of people who are idiots take money/equity on their house to buy it.. give it to the Rothschilds.. 

ultraticum's picture

Would the price change do anything to the utility?

 

I love the smell of central bankster desperation in the morning.

IH8OBAMA's picture

Please allow me to CONGRATULATE all my ZH friends who held their Bitcoins though my and others slamming of the value of this item.  Some of you may have become quite wealthy, depending upon what price and what amount of Bitcoins you purchased.  Continuing to bash you and your gains or proffer the counter argument is not helpful and I now applaud you for hanging in there through thick and thin.

Other than congratulating you on your amazing good fortune all I can say is to keep your eyes open for events and sentiment changes.

Well done, people!

 

tmosley's picture

Did you mean for that to be a massive sell signal? Because that's a massive sell signal.

IH8OBAMA's picture

Do as you please.  Although the futures start trading Sunday and it may get much more volatile, shorting Bitcoin naked could be a harrowing experience.  I think I read that Interactive Brokers isn't even going to allow their customers to short the Bitcoin futures for now.

 

Buckaroo Banzai's picture

"I think I read that Interactive Brokers isn't even going to allow their customers to short the Bitcoin futures for now."

Futures contracts are subject to margin calls. If you sell a futures contract, and the price moves far enough against you such that it empties your margin account, your contract gets liquidated if you don't supply additional funds on a timely basis. Futures markets are actually extremely honest markets in that respect, so it is surprising to hear that IB would be worried about allowing customers to sell BTC futures contracts. The exchange simply can't get into any financial trouble, assuming it sticks to its own rules.

Don't forget that, unlike the physical gold or silver markets, where prices are literally "fixed", BTC trades on a liquid spot market with extremely fast settlement times. Prices are discovered in the spot market, not the futures markets.

IH8OBAMA's picture

The inital margin I understand will be about 33% of the cash value.  That is much higer than other futures contracts and reflects the volatility.  The fact that futures traders can arb the cash means that large traders can move a market as small as Bitcoin.  Will they do so and in what direction is a question.  I would expect more volatility as the futures markets are initiated but it could eventually create a stablizing effect on the cash also, although commenters rarely credit futures for causing price stability and often attribute the opposite.

Buckaroo Banzai's picture

"The fact that futures traders can arb the cash means that large traders can move a market as small as Bitcoin."

How do you arb the cash when you have to actually possess a BitCoin before you can sell it? It's easy to buy a BitCoin in spot and sell a futures contract against it, but unless you have a trading account with sufficient BitCoins to support your arbitrage operations, you have no way to sell a Bitcoin in the spot and buy a futures contract against it.

This means that the arbs are going to have to own a substantial number of BitCoins in order to execute their trades, and if they ever run out of BitCoins they will run out of ammo to move the spot price to the downside when the futures get below spot.

This is a fascinating artifact of an unbalanced market, where a strictly limited supply of BitCoin faces what is, for all practical purposes, an unlimited supply of dollars.

IH8OBAMA's picture

"How do you arb the cash when you have to actually possess a BitCoin before you can sell it?"

As I mentioned in a detailed post the other day, I believe those planning to trade the futures have already been buying BTC.  In fact, I believe they are part of the cause of the large BTC move in 2017.  Now that they have a long position, when the futures start trading they can start building a short (off setting) position in the futres while they still continue to build a long position in the cash.  When they are ready they will start rocking the cash as they rotate large sell orders into the cash until they 'break' the market.

This is a likely outcome.  Don't underestimate the ability of large futures traders to manipulate the market and manage to make your money theirs.

That's why I say keep a close eye on events and sentiment.

 

SHRAGS's picture

Nice comment, which stimulated a random thought off the top of my head, could they actually arb the timescale difference between execution in cash & futures markets?  With the current congestion the cash BTC market the futures market is several orders of magnitude quicker to execute a trade.  I wonder if they have found a way to exploit this congestion for profit.  Not a fully formed thought just thinking about this like John Boyd and his OODA loop.

 

I've been wondering how they were going to pull of the control of BTC with futures given the cost of mining a coin, perhaps this could be THE vulnerability.

Buckaroo Banzai's picture

But have they accumulated a sizable enough long position in BitCoin to work their seesaw magic on the price? I guess we're about to find out next week.

tion's picture

They probably don't want to worry about how they will sleep at night after a client jumps out of a 40 story window, good on them.

overbet's picture

I read that too. Why wouldnt they instead treat it like under $5 stocks or options where you get no margin?

 

Citron said theyre shorting GBTC today

Citxmech's picture

So what are algos trading the futures markets going to do to the BTC exchange prices?

WhackoWarner's picture

I read this a few days back.

My serious question is can the coming futures trader somehow use tether and bitfinex as a means to manipulate as well?

I am an idiot at all this which is why I own none.

 

https://seekingalpha.com/article/4129543-bitcoin-one-way-go-true?li_source=LI&li_medium=liftigniter-widget

tmosley's picture

If by "futures trader" you mean "Finex", then yes. Hell, if they are able to scalp enough dollars off of retail in that manner, they might be able to keep their other frauds going.

WhackoWarner's picture

tmosley;

Again serious question.

The article I reference tells the case of Tether (which looks to me like it creates tokens "out of thin air" valued on par with USD.......then clients can use these tokens via bitfinex to purchase actual BTC.  Right?)

So Tether looks to be a completely opaque company creating not only tether but USD out of nowhere? Being recycled into BTC via bitfinex (also unaudited and opaque).

How is this not a complete scam?

AND the coming futures contracts on Sunday?  Can the Tether/Bitfinex relationship be used to manipulate the BTC futures contracts directly?  Even indirectly?

Seriously asking.

thanks.

tmosley's picture

They are (probably) creating tether out of thin air, though it doesn't really matter if they have the dollars to back them or not since their TOS specifically states that Tether are not redeemable.

They are literally printing them and "somehow" the market has set their value at $1.

>How is this not a complete scam?

Beats me.

>Can the Tether/Bitfinex relationship be used to manipulate the BTC futures contracts directly?  Even indirectly?

YES! If Finex enters the paper market with some of their ill-gotten dollars, they can go long the paper contract and pump the BTC price, or go short and crash it. Basically anyone who sets foot in that market will be eaten to the bone within a day or two. ANd in the meantime, we will have EVEN MORE volatility in the BTC price as the scammers move it up and down to scalp retail investors in their paper market.

WhackoWarner's picture

"

Tether is a cryptocurrency controlled by Tether Limited. Unlike Bitcoin, Tether is issued (not mined) and seeks to maintain a stable exchange against the dollar (i.e. tethered). This is accomplished through a reserve based model, whereby each Tether is backed by one US dollar in the company’s bank. One can acquire Tether directly through the website or trade through an exchange. One can convert Tether to USD at Tether Limited, though Tether Limited has the right to refuse for any reason. The mechanism of the reserve-based model means that the Tether/USD pair will hover around 1:1 on the market, because there would be an opportunity to arbitrage otherwise (i.e. buy/sell on the market, convert at Tether Limited, or vice versa).

Traders like tether for its portability across platforms as it is a digital token whereas transacting in USD would require much more hassle involving banks."

 

So in my lack of knowledge here.  Seems like Tether Limited can refuse redemption but is playing as though they in fact have a reserve account somewhere backing their issuance.  With absolutely no oversight by any auditor nor any way for any retail client to look at any company accounts.

What a gig?  So retail is piling into an opaque, non-accountable company with "real USD" and buying fairy tokens to take to another opaque exchange in hopes of possessing a crypto.  Should the "tether" not be approved the client has no recourse.

What a gig.

This article also posits that the sky-high value of BTC is resulting from this infinite creation of tethers, in part,....all trying to convert to BTC.

Now tell me.  If I was an opaque owner of Tether Ltd.  what would prevent me from creating billions for my own benefit in untraceable tethers (out of thin air but tied via consensus to the USD at 1:1)......and buying BTC?  I would not care the price of BTC as I am buying with nothing.  PLUS, the bonus being that the driving up of the BTC value is gathering me at Tether Ltd.  unknown numbers of clients willing to pay me in USD.  And I never have to account for a "real dime" that came into my company nor do I have to give it back?

Sweet.

tmosley's picture

You are on the BALL.

Now, for bonus points, what happens when the market realizes Tether is a fraud?

WhackoWarner's picture

The bonus points I cannot predict tmosley.

It hinges on who controls Tether and Bitfiniz.  I gather they are the same folks.  So to presume "the market realizes" is a hopeful conclusion. Perhaps investors who understand the tech will know (and do already)....  I do not see this right now.  Retail is piling in.  Market will not know until some grand default.  And no recourse.

However if Tether and Bitfinz are "connected"?  how far can the fraud run if it benefits.

And how much influence do they run the fraud with.  Hate to think it is all planned but alas.  Run up the "easy way" to invest in BTC via Tether to the moon as far as can be fleeced.

I do not think it has even started.  People (like me) do not understand the underlying tech.  But people are looking for some return and the carrot is being dangled.

So who owns Tether and the scheme?  Where is my old buddy Blythe Masters?

So no soup for me kiddo.  When and if "markets" realize the fraud the value will collapse (but not disappear).  Much hand wringing and back=-peddling and "I warned you's"

 

Markets should have realized the "creation of something for nothing scheme" 100 years ago.  This is far more sophisticated and relies on that sophistication to dupe Mom and Pop.  Add to generations it is cool app.

Bonus points.   I do not know how far this can go.  And how far the fraud can go.  Take in enough actual USD into a closed loop fraud (with promise but no gaurantee of any redeemability or accountability?).  How far can this be pushed to starving retail clients?  trillions.  Vaporize away the hungry return seeking money of anyone seeking a return.

Nope I can't answer the bonus question right now.  Reason why is that I do not know the identity of the fraudsters nor whom they have bribed to perpetuate this scheme.

What I do suspect is that people who "tether" at some point will lose everything to something they did not know.

But unlike Madoff there is stated "no recourse"and to boot no accountability.  No traceable jurisdiction or bank account.  How high does it need to go to take in millions  upon billions  trap it for theft?

 

Cannot answer the bonus question BUT I wish you would for my edification.  My guess is way way higher and then collapse.

 

Thanks.

tmosley's picture

Tether and Bitfinex are both owned by Finex, so they are essentially the same entity.

Too bad you can't answer the bonus question. Anyone who could would become rich indeed if he acted on such knowledge.

Sadly, I don't know the answer either. I suspect a crash, but I have seen others who claim the price will explode. Maybe both, at the same time even, as we saw the massive divergences today on various markets. Your guess seems to be the same, but who knows?

Glad to have cash on the sidelines in any event.

Spaced Out's picture

Very noble, and thank you :D

maxblockm's picture

It's not too late to get in. Buy .1 BTC  or .001 if that's all you can afford.

BaBaBouy's picture

The KITCO feed still shows 15300, its been pretty reliable.

Where is the 19K coming from ???

Can you actually sell a Bitcoinz for 19K ???

quadraspleen's picture

gdax.com was showing 19k. down to 16299 now. Good. It can handle coming down to the sub 10k mark for a bit. way too overheated

serog's picture

You can spend (or buy) 0.0000001 bitcoin.  

chuckymcgee's picture

Bitcoin is infinitely divisible. At present it's divided down into the hundreds of millionths. So it's no problem to send 0.000003 bitcoins to someone. Of course, that's only in theory, as fees are so overwhelmingly high. Bitcoin Cash was launched by the Bitcoin community to address this congestion and offer low fees.

man from glad's picture

Thank you for the informative reply.

Traderone's picture

Are you by any chance related to Ulick McGee?

FreeMarketAnarchist's picture

Much better Litecoin to address this issues. 

*BCash perpetual onchain scaling destroys decentralization. Without that, it's just PayPal 2.0, which is not revolutionary.

*BCH is a lot more miner centralized. Because its network hashrate is a lot less than BTC, a        small BTC pool can 51% attack it.  So it's security is weak because of that. Litecoin doesn't        have this problem because Litecoin dominates Scrypt hashing.

*BCH also does not have SegWit. Without SegWit, it will never get future tech upgrades like Lightning Network, Schnorr, etc. 

No way BCash can compete with Litecoin.

ShorTed's picture

it's divisible out to 1/100,000,000.  i currently own 0.16165775 BTC = ~$2,700

tmosley's picture

How does one make change for a credit card?

When you buy something the exact amount is drafted. There is no change.

RedDwarf's picture

"How does one make change in Bitcoin?  Isn't it like a $14,000 bill? Please don't flame me I know little about Bitcoin and it is a genuine question. "

BitCoin is divisible to 8 decimal places.  The smallest unit is called the Satoshi.  One bitcoin is thus equal to 100,000,000 Satoshi.  In effect you can actually think of the Satoshi as the actual monetary unit and just think of 1 bitcoin as 100 million Satoshi just like the $1 bill is 100 cents.