Goldman Sachs, Other Wall Street Banks Exploring Bitcoin-Backed Loans (coindesk.com) 56
Goldman Sachs is among a handful of tier-one U.S. banks figuring out how to use bitcoin as collateral for cash loans to institutions, CoinDesk reported Thursday, citing people familiar with the plans. From the report: Banks such as Goldman will not touch cryptocurrency spot markets but lean towards synthetic crypto products such as futures. Emulating tri-party repo type arrangements (a way of borrowing funds by selling securities with an agreement to repurchase them, involving a third-party agent), banks are exploring ways to follow the same path of not touching bitcoin, like other synthetic products. It's an opportunity that lays the groundwork for more integrated crypto prime brokerage services in the future, according to the sources CoinDesk spoke with. It's also a continuation of Wall Street's relatively sudden embrace of a $2.7 trillion asset class -- albeit with somewhat niche products. "Goldman was working on getting approved for lending against collateral and tri-party repo," said one of the people. "And if they had a liquidation agent, then they were just doing secured lending without ever having bitcoin touch their balance sheet."
Sigh... (Score:5, Insightful)
Should we start preparing for the next bank-induced economic meltdown now?
Re: Sigh... (Score:3)
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I know right the optimist in me would like the think the people at GS are really smart and have put careful analysis into how to structure debt instruments collateralized with such a volatile and relatively thinly traded asset...
The pessimist in me tends to think the people at GS are really smart and rightly concluded they got away with more or less demanding bottomless support of the public purse to intercede in the market place until this bets paid off on the basis they are to big to fail.. and that they
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Right, the calculus says that the worst possible outcome is that they get bailed out. After all one of their buddies is still the the Fed chair and no significant regulation occured after the previous loan scheme collapsed.
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Well, they gotta do something with all that free money
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It's Government Sachs. You should prepare for government bailing out bitcoiners next time it nosedives.
Re: Sigh... (Score:3)
Bitcoiners won't get bailed out, neither will the millions of people fucked over by the economic disaster this will cause. But Goldman Sachs has nothing to worry about.
Re: Sigh... (Score:4, Insightful)
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You're confused. With this move, GS are exploring becoming bitcoiners.
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[Disclaimer: I own GS stock but no cryptocurrency]
I actually think it might be a healthy thing for cryptocurrencies in general gaining broader useful function. It should be good for GS too, given there is zero contagion risk (just the risk of having to put crypto on your balance sheet if things go south).
Without tools like this, it is very hard for businesses to use cryptocurrencies in a functional way— you get stuck either converting it to fiat immediately or holding a large stash of it and trying to
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Should we start preparing for the next bank-induced economic meltdown now?
Here's how to make easy, assured money off the "inevitable" bitcoin crash: Seven ways to short bitcoin by Investopedia [investopedia.com]
What? Not all that sure about the crash all of a sudden?
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What? Not all that sure about the crash all of a sudden?
Shorting involves speculating on a crash during a specific time frame. One can still be fairly certain Bitcoin will eventually crash without knowing when it will happen.
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What? Not all that sure about the crash all of a sudden?
Shorting involves speculating on a crash during a specific time frame. One can still be fairly certain Bitcoin will eventually crash without knowing when it will happen.
Any minute now! Aaaany moment! That's what you people have been saying! Backtracking on that all of a sudden? Juuust nooow! Any second!
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Bitcoin: "I intend to live forever. So far, so good."
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But what could go worng?
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Yeah. I think these were called "Credit Default Swaps" back in 2008. Just swap out "Credit" for "Crypto". Everyone will love it.
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Too big to fail.
If you do it on a small scale you get locked up for fraud. If you do it on a massive scale that threatens the entire economy, you get a handout from the govt.
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Forever gambling ... (Score:5, Insightful)
it will be great, loads of money, ... then one day it will implode and the rest of us will have to bail the banks out again.
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There are a lot of things we might run out of but there seems to be no shortage of stupidity.
Some scams take decades to be revealed (Score:3, Insightful)
As tlhIngan pointed out: [slashdot.org]
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For the sake of argument how long did it take CDS/CDO-hybrid mortgage bundles to from hot new commodity to black hole?
A little longer than BitCoin's existence at this point and quite a bit longer than BitCoin has had enough asset value they majors started looking at it seriously. So sure Slashdot and I have been wrong for a decade, but its hardly proof the word BitCoin won't conjure a giant sucking sound when thought of in another ten years.
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The dollar crashing isnt really worth thinking about. The only way the dollar goes down is if the Federal Government goes down. That isn't going to happen all at once like the end of the Soviet Union or something; which only ended without violence because of a mono polar world that no longer exists.
The only way the USA stops being the USA (in our life times anyway) is violence and lots of it. Bitcoin isnt going to be worth anything against the backdrop either.
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The dollar crashing isnt really worth thinking about.
Yeah, the price increases aren't happening. The fed printed a lot of money, now it has to be absorbed without actually doing anything productive. I'm not sure where you got the idea of the government falling, we've done this before, in '73 and '79, then more gradually since then.
Re: Forever gambling ... (Score:2)
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The upside is that when this happens the fanboys will blame the government and not the inherent faults of bitcoin or that it was ever a bubble.
Repeat it in enough it will become good (Score:1)
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Well as rule the only groups that ever *want* to be the subject of regulation or large entrenched interests who will generally both get help author the regulation and see the potential compliance costs as great way to lock out competitors. Much safer than investing in innovation / advertising / consumer experience to stay ahead of the upstarts you know.
So I am no surprised the crypto bros (who won't get an invitation write finance legislation packages as long as the Big banks are around) are less than enthu
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As the rule, the main groups who want to be subject of regulation are the downtrodden. That enables them to have at least some leverage where they otherwise have little to none.
Because the main problem is uncontrolled concentration of power in the hand of the few on the top, who in turn isolate themselves from reality of the rest of humanity, and start making really stupid decisions based on believing that their own little bubble on top is representative of reality outside it.
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> The crypto bros all want to wrestle control away from governments, and do it without any oversight, and hence no accountability.
The blockchain provides PERFECT accountability with no central point of trust - it does its own full forensic audit about every 10 minutes.
When I saw the words "legitimate currencies" together I nearly spit my milk. That's an oxymoron at this point, thanks to governments.
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The blockchain provides PERFECT accountability with no central point of trust - it does its own full forensic audit about every 10 minutes.
Accountability in this context refers to requiring the folks dealing in/trading cryptocurrency to play fair, not to the security of the blockchain.
As in, let's say you're foolish enough to buy a pump and dump shitcoin? Well, too bad buddy, there's no accountability. Caveat emptor. But yeah, the secure blockchain still says you own your share of worthless assets, so it's all good.
That's not accountability. (Score:2)
That's a capability to be counted, that's all.
It's the same form of accountability that a pair of dice (or a single one) has.
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Don't let the crypto bros fool you: "DeFi" means "Deregulated Finance", not "decentralized" as they're trying to pass it off as.
The crypto bros all want to wrestle control away from governments, (...)
AWESOME! Where do I sign up? How do I help?
Never more than 21million Bitcoins (Score:5, Informative)
Just remember this one truth about Bitcoin (and Bitcoin Cash) - There will never be more than 21million Bitcoins - unless more than 50% of the entire market decides to dilute its own holdings.
What the banks plan to do, imo, is create a synthetic crypto derivative market that allows a larger amount of money to trade on assets without having to own those assets. This is similar to what they do with gold, silver, and what happened to Gamestock shares. If too many people decide to trust their crypto holdings to sit on exchanges instead of in their own wallets, you get a situation where this can happen. Every now and then, you need to take delivery on your assets - whatever they are.
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Let's go brxndxn!
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Do folks realize that Bitcoin is a finite resource? With each halving resource expenditure roughly doubles for the same return. Meaning, at some point the 'market' is going to realize that this is a fools game and walk away. Think what a complete collapse of the Bitcoin would suddenly mean...miners for pennies on a dollar, a lot of electricity generation suddenly no longer needed. And, buy far, the worst - a great deal of global monetary value suddenly wiped. It'd make Enron look like the losses from a
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There will never be more than 21million Bitcoins - unless more than 50% of the entire market decides to dilute its own holdings.
51% of the miners, not the market. If the miners decide they'd rather keep the gravy train rolling than mine only transaction fees, that 21 million coin "limit" is history. Of course, Bitcoin is a ways off from being mined out, so that's not going to be its immediate undoing.
What's more likely to crash Bitcoin's value is the same thing that happened to MySpace, VHS, Blackberry, etc., people could just decide some other coin is the new hotness. There may be a limit to the number of circulating Bitcoins, b
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A clear majority of miners wanted a block size increase in 2017, didn’t happen anyway. Miners just don’t control bitcoin. I can recommend this book that describes those events really well:
https://www.amazon.com/Blocksi... [amazon.com]
Also, you fall for the next “hotness” if you don’t understand bitcoin is decentralized, immutable and censorship resistant. None of the other ones satisfy a single of those characteristics.
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No it isn't. Now you have another hard fork. The current chain with the initial limit will keep on going just the same
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create a synthetic crypto derivative market
The real parallel would be the Synthetic Credit Default Option market leading up to the 2008 crash.
In a dark market, the contents of the Synthetic financial instrument is unknown. Which is how 'good' synthetic derivitives can be sliced and diced with risky ones and turned into new derivitives (the 2007-8 CDO-squared derivitives) which are even harder to value. Then if the market appears to be turning sour, the bank (a.k.a. Goldman) can offload those onto unsuspecting investors so they end up holding no r
Heard a guy taking about Bitcoin in a bar: (Score:3, Funny)
He said: "Fiat currencies are obsolete. They're total crap."
His friend: "Really? Like what currencies?"
Guy: "Anything - the Euro, the Yen, even the USD - all crap."
Friend: "Uh Ok; so like, what's Bitcoin's worth then?"
Guy: "Each coin is worth north of $60K right now."
Friend: "What?! $60K?? As in USD??"
Guy: "Yeah - over $60K USD each"
Friend: "Wow. Bitcoin sure is a lot of crap!"
The grand master plan of crypto (Score:2, Informative)
The plan for all cryptocurrencies isn't what you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.
After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.
But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and for it a new fina