Let's Discuss Bitcoin

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody


cramer said:

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody

You don't "hold" crypto.  You have an ID and a password. It's like saying that someone is "holding" your ATM card, and uses it to transfer funds.  If too many people say, "Give me my money" to Coinbase, and they don't have it, I don't know what protection the "fiduciary" relationship will give the customers.


nohero said:

cramer said:

On CNBC yesterday  Andrew Sorkin interviewed the  CFO of Coinbase. She said Coinbase has two types of accounts - a trust to hold customers cryto in their name, and crpto trading accounts where crypto is held in street name, similar to securities held in street name at brokerage firms. 

The crypto held in the trust is shielded from bankruptcy, although a crypto firm bankruptcy has never been brought before the courts. The crpto held in the trading account is not protected in bankruptcy. 

"Coinbase Custody operates as a standalone, independently-capitalized business to Coinbase, Inc. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of our clients."

https://www.coinbase.com/custody

You don't "hold" crypto.  You have an ID and a password. It's like saying that someone is "holding" your ATM card, and uses it to transfer funds.  If too many people say, "Give me my money" to Coinbase, and they don't have it, I don't know what protection the "fiduciary" relationship will give the customers.

Yes, you're rght. I opened a small (very small) bitcoin account with PayPal a couple of years ago. I haven't looked at. 

https://www.cnbc.com/2021/05/05/investing-in-bitcoin-with-paypal-what-you-should-know.html


yahooyahoo said:

PeterWick said:

Jasmo said:

Only up to $250,000 
max_weisenfeld said:

BarneyGumble said:

I wonder how many people know that they’re unsecured creditors as against the funds in their Chase savings account too.

Except those funds are federally insured

For some perspective, I cannot imagine ever being in a place where we would ever have anywhere close to that $250,000 ceiling. But then, that makes one even less likely to dabble in anything besides stable coins that are supposed to stay pegged to the USD.

When one reaches $250K, you open a second account.

Make sure it is at another bank, as the limit is not per account but per institution


Or under another identity


Or a joint account.


Some more 5k BTC would be lovely. In my few years of crypto trading I think my favorite new word is ponzinomics.. 


https://www.cnn.com/2022/06/13/investing/bitcoin-price-celsius/index.html

Bitcoin plunges below $24,000 and the crypto meltdown claims another casualty

By Anna Cooban, CNN Business

Updated 12:12 PM ET, Mon

London (CNN Business)Bitcoin and other cryptocurrencies plunged Monday, and two of the world's biggest cryptocurrency platforms restricted activity as the market meltdown continued apace.

The Celsius Network, which has 1.7 million customers, said that "extreme market conditions" had forced it to temporarily halt all withdrawals, crypto swaps and transfers between accounts."We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets," the company said in a blog post.

    The UK-registered company has about $3.7 billion in assets, according to its website. It pays interest on cryptocurrency deposits, and loans them out to make a return.

      Binance, the world's biggest cryptocurrency exchange, suspended withdrawals on its bitcoin network for a few hours on Monday.

          The company said it made the decision because some transactions had gotten "stuck" and were causing a backlog


          It's still around $23,000 overvalued.


          jamie said:

          It's still around $23,000 overvalued.


          jamie said:

          It's still around $23,000 overvalued.

          But imagine, when this thread started, bitcoin was under $1K. If you had nerves of steel, you could have a lot of money right now--in theory--and even more a couple of months ago.


          It is difficult to stay with such an investment but zooming out as Karen mentioned, you can see how its value has risen in spite of its volatility. There is a lot of complexity to it but things like the halving cycle and its scarcity still hold true. The way it has been treated like a commodity to speculate on has been disappointing but we're living here on earth, with humans, so it is what it is.


          The way BTC has fallen in value in a time of rising inflation and stocks declining across the board suggests it really is just a commodity and not "digital gold" -- not even a useful inflation hedge, just another thing you can buy and sell on the market that happens to have an interesting technological implementation.


          I do regret not buying 100 shares when it was $30.  

          I always saw it as an alternate currency and payment method.  Not as an investment.

          You also had a lot of people touting it will go to $100,000 when it was $60,000.

          I guess time will tell.


          Sure, but that's true for any stock that does well. The trick is to know that ahead of time ;-)


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