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General Discussion / Re: Massive BitAsset Growth ! - Analysis
« on: January 15, 2018, 08:27:52 pm »If I want to realize my BTS profits, I sell BTS and buy BitUSD
But wouldn't that cause an inverse correlation ?
It could, but it would depend on the volumes involved. Think through what I'm saying in a little more detail and I bet you'll get it.
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The fact that there's BitAsset growth is the significant thing. It doesn't really matter where its coming from because the system is starting to work by virtue of delivering liquidity to complimentary markets
Agreed.
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The difference with Tether is that BitUSD is "real money" held on the blockchain so when you hold it it cannot be defaulted on. Tether on the other hand is just a worthless token promise. It's the bank that holds the actual liquidity. Subtle theoretical difference but huge practical one because in one case you could be holding bottle tops for all you know and in the other the real thing backed by real markets.
Yes, except that strictly speaking BitUSD can be defaulted on algorithmically if a "black swan" occurs. This is a very important systemic risk that, to my knowledge, has not been properly quantified. We just say "well we're pretty safe because imagine how difficult it would be for BTS to lose that much value in such a short time!" So I'm actively working to reduce my exposure to BitUSD.
But I'm pretty risk-averse, so maybe I'm overestimating the chances of a black swan.