Hacker News new | ask | show | jobs
by bunderbunder 978 days ago
It's not the asking price that determines market rates, nor is it the price that people who aren't currently selling believe their assets are worth. It's the price at which active buyers are willing to buy.

One of the challenges with price discovery in the BTC market, though, is that there's not really an effective mechanism to prevent wash trades in place. That means that all you need to do to create a bunch of fraudulent liquidity at a higher price is create a sock puppet account and start trading with yourself. Anyone sitting on a hoard of BTC is highly incentivized to do this to try and prevent their on-paper losses in the hope that it will mitigate their becoming real losses. And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price.
1 comments
dingnuts 978 days ago
if you trade with yourself you still have to pay transaction fees to the cluster. Every transaction would incur a loss.

>And that can concievably become the bulk of BTC trading volume if there isn't a steady supply of new people who are willing to buy in to Bitcoin at any price.

that would end up just slowly transferring all of the BTC to miners as transaction fees... what a scam!

I uh, guess that creates liquidity though?

link