[Finance] The cryptocurrency (Bitcoin etc) thread

[Tom Hark Preston Park]

Can't see any old wishful thinking NFT donkey bollox displacing the tried and trusted Panini sticker album anytime soon. The little kidz understand...

 

[Neville's Breakfast]

There's possibly no benefit to replacing a digital loyalty point system with an NFT one, or at least not one that'll appeal to everyone but it'll appeal to enough people especially those who make money from it - as you say, there are a lot of people with a vested interest. (Personally, I think it's a horror show in the context of football, but I think it's coming.) If every match has a unique token then over time you end with a big library that will appeal to some (not all, but enough) people: it's like a digital badge. There'll be people who'll love to post on Facebook and coming soon the metaverse that they were at such and such a game, show all their badges that verify that they did actually go and were actually there.

Go to a game, get an NFT and it boosts a player in your FIFA game maybe for the kids as an added bonus. Or a sponsor gives you a discount because your token is unfakeable and literally confirms you were there - or bought it off someone who was there. There'll be completists who'll go to games they might not otherwise. There'll be loads of people who don't care. There'll be others who'll go to big games purely for the resale value of an NFT - from the club perspective, release exclusive content or benefits with the token that's activated when you go through the turnstile...when you've got a game that might not sell out or where people might simply choose other priorities it's an added nudge if the token is only activated by the turnstile. You could also theme them - say we get to the FA Cup final. You could prioritise release of tickets to fans who have been to games through all the cup rounds if you wanted to because you're recording and recognising specific games through the tokens, not just on STH points so non-STH fans who still follow the club through thick and thin aren't excluded.

There's something ironic I think - I was looking recently at my paper Euro 96 tickets and thinking of the memories those stir, and also recognising that I have no paper tickets or record for two of the most enjoyable Albion matches I've been to of the past few years (beating Man City at home, then Man United). I'd love paper tickets for those games to go in the scrap book but they are things of the past. I can see the appeal of a unique digital souvenir given with a digital ticket simply because it's something "tangible" to go alongside the memories, even as I recoil from the idea for everything it represents. I'd never buy one, and the idea of a digital scrapbook seems a bit weird, but I'm not of the generation these are aimed at.

Sounds like a load of old bollox dreamed up by a slimy marketing team somewhere.

 

[NooBHA]

Presumably if I collect my pubes in a jar with the intention of selling them at a profit at a future date they could be considered to be an investment too?

Would the Gain be subject to Income Tax or Capital Gains Tax

Are Public Hairs categorised as " Chattels ?

 

[CheeseRolls]

There's a big difference in a cinema giving away NFTs as tokens and people buying them as investments (or when the vendor is trying to sell them on the basis they will go up in value). I don't understand why you think an NFT will be given for going to a match. The digital record that you went already exists, a) buy the purchase of the ticket whether that is paper or digital and b) when the ticket is activated at the turnstile. Where is the benefit of replacing one digital loyalty point system with an NFT one?

There are a lot of people with a vested interest in pushing these. Especially when you start talking about secondary markets which just introduce a middle man that pushes up the price of everything to the punter.

The advantage of NFTs as tickets is that they offer the potential for much better control of the sell on market. For example the ability to prevent a ticket being sold on, above the purchase price. The ability to potentially block tickets from being sold to undesirables. Cheaper and more effective distribution of away tickets. There is probably a 101 marketing and up-selling opportunities on top of this that an old techie like me won't have even thought of.

 

[PILTDOWN MAN]

You also have the option to short them.

But your investment could go up or down, previous performance is not a good indication of future returns.

 

[drew]

The advantage of NFTs as tickets is that they offer the potential for much better control of the sell on market. For example the ability to prevent a ticket being sold on, above the purchase price. The ability to potentially block tickets from being sold to undesirables. Cheaper and more effective distribution of away tickets. There is probably a 101 marketing and up-selling opportunities on top of this that an old techie like me won't have even thought of.

I'm no techie but don't the Albion already control who get's tickets. Also with regard to sell on, what's to stop a tout taking two payments, one registered against the NFT at face value and a separate transaction for their 'admin' fee that goes under the radar?

Better solution to passing on tickets is having an id on the ticket that has to match photographic id at the point of entry. If you can't go you sell the ticket back to the original selling agency for them to resell at face value.

As for away tickets, what do you mean by more effective? Surely the next step is for clubs to issue digital tickets for away fans just as they do for their home fans!

 

[Happy Exile]

/snip/
looking for a problem to solve? heres one, you can trade shares on an NFT based platform without any counterparty risk. thats were we go back to the orgin of Bitcoin as a reaction to banking collapse. the idea of a currency failed imo (because its deflationary, so disincentive to spend tokens), however the development of blockchain and NFT could solve all issues around who owns what, whether they are solvent, etc, on a public ledger (or private but verifiable).

Here's an example of the way that it's going just as you describe. https://blockworks.co/crypto-goes-after-wall-street-securitize-acquires-traditional-transfer-agent/

There are many who believe this will totally collapse hedge funds (and possibly the economy) because of the amount of shady transactions and iou's that exist that mean many more shares are sold than exist and that this'll put a stop to. The chair of the US SEC has even openly said 90-95% of retail trades don't go through exchanges so real price discovery of stocks doesn't happen. This will end that manipulation overnight.

 

[Neville's Breakfast]

Here's an example of the way that it's going just as you describe. https://blockworks.co/crypto-goes-after-wall-street-securitize-acquires-traditional-transfer-agent/

There are many who believe this will totally collapse hedge funds (and possibly the economy) because of the amount of shady transactions and iou's that exist that mean many more shares are sold than exist and that this'll put a stop to. The chair of the US SEC has even openly said 90-95% of retail trades don't go through exchanges so real price discovery of stocks doesn't happen. This will end that manipulation overnight.

How exactly does that work ? There are many more trades on shares than shares because of derivatives. It’s not shady. There is no confusion over title because there is no title in a derivatives trade. It is simply an exchange of risk of future price and nothing to do with ownership.

 

[El Presidente]

How exactly does that work ? There are many more trades on shares than shares because of derivatives. It’s not shady. There is no confusion over title because there is no title in a derivatives trade. It is simply an exchange of risk of future price and nothing to do with ownership.

But if you ignore all that….

 

[Happy Exile]

How exactly does that work ? There are many more trades on shares than shares because of derivatives. It’s not shady. There is no confusion over title because there is no title in a derivatives trade. It is simply an exchange of risk of future price and nothing to do with ownership.

Because it's not just derivatives driving the volume. Naked shorting still seems to happen even though it's supposedly illegal, and for retail investors there is confusion over title - as a "fun" experiment buy shares in brokers and see if you can get any tangible evidence they've actually bought an underlying asset let alone have it associated with you as an individual. Even things that should be relatively simple in that case like AGM voting rights aren't possible with some while others make it mandatory in the small print that "your" shares are loaned out and - my personal favourite - in the event of the broker having challenges with liquidity because of a squeeze those shares will be sold - erm...no thanks. If I own them I want to choose when to sell them. Others say any dividend that isn't cash (eg shares as dividend) is given in cash equivalent...well...if they own the shares on my behalf, they receive shares as dividend so why can't they distribute them? Revolut are the only popular UK broker I've used (out of 4) that can show they actually own shares I've paid for and have actual real shares associated with my name.

It's easy to be cynical about it but one big indicator for me about the impact moving shares to the blockchain will have is the meme stock movement to directly register shares as your own which has support now from a number of high profile figures. This has led to 100% utilisation for weeks and weeks and very high borrow rates on some stocks and while the prices have been volatile they've remained at levels way above either what company fundamentals or performance or what visible market activity should support it being. Everything tanking last week, GameStop (as one example - currently has around 15% of total shares, 40% of free float, directly registered by retail investors) went up 12% - their price fluctuates wildly but has sustained several multiples above anticipated price target for 18 months now despite almost universally negative press about them financially, and no real good news or successes. AMC (less of a direct register movement, but it's still there), went up nearly 6% last week. One hedge fund that heavily (probably naked) shorted these stocks has already gone under in part because their shorting of GameStop lost them billions and others are haemorrhaging money on borrow rates for positions they can't close. Several of these funds are under criminal investigation for their practices (partly why it looks like illegal naked shorting is still rife). You've got hedge fund bosses coming out and saying retail investors are playing games with the pensions of teachers - direct registering is really hurting them and they're even admitting it.

I'll freely admit I'm not clever enough to understand all the dynamics but the evidence seems to be there that once people start putting shares in their own name and pulling them out of lending and shorting it has a major impact. If taking 40% of shares of one heavily shorted stock out of circulation has such a big impact on the ability of hedge funds to remain solvent - to the extent one US broker is contacting shareholders and offering them high rates of interest (double digit %) to put their GameStop shares into a lending programme - a blockchain based stock market would be huge. I've not seen any evidence to counter this, but I'm always open minded and happy to learn from those who know more.

 

[MJsGhost]

Presumably if I collect my pubes in a jar with the intention of selling them at a profit at a future date they could be considered to be an investment too?

Eh? What kind of rampant capitalist wants to sell pubic goods?!

 

[Neville's Breakfast]

Because it's not just derivatives driving the volume. Naked shorting still seems to happen even though it's supposedly illegal, and for retail investors there is confusion over title - as a "fun" experiment buy shares in brokers and see if you can get any tangible evidence they've actually bought an underlying asset let alone have it associated with you as an individual. Even things that should be relatively simple in that case like AGM voting rights aren't possible with some while others make it mandatory in the small print that "your" shares are loaned out and - my personal favourite - in the event of the broker having challenges with liquidity because of a squeeze those shares will be sold - erm...no thanks. If I own them I want to choose when to sell them. Others say any dividend that isn't cash (eg shares as dividend) is given in cash equivalent...well...if they own the shares on my behalf, they receive shares as dividend so why can't they distribute them? Revolut are the only popular UK broker I've used (out of 4) that can show they actually own shares I've paid for and have actual real shares associated with my name.

It's easy to be cynical about it but one big indicator for me about the impact moving shares to the blockchain will have is the meme stock movement to directly register shares as your own which has support now from a number of high profile figures. This has led to 100% utilisation for weeks and weeks and very high borrow rates on some stocks and while the prices have been volatile they've remained at levels way above either what company fundamentals or performance or what visible market activity should support it being. Everything tanking last week, GameStop (as one example - currently has around 15% of total shares, 40% of free float, directly registered by retail investors) went up 12% - their price fluctuates wildly but has sustained several multiples above anticipated price target for 18 months now despite almost universally negative press about them financially, and no real good news or successes. AMC (less of a direct register movement, but it's still there), went up nearly 6% last week. One hedge fund that heavily (probably naked) shorted these stocks has already gone under in part because their shorting of GameStop lost them billions and others are haemorrhaging money on borrow rates for positions they can't close. Several of these funds are under criminal investigation for their practices (partly why it looks like illegal naked shorting is still rife). You've got hedge fund bosses coming out and saying retail investors are playing games with the pensions of teachers - direct registering is really hurting them and they're even admitting it.

I'll freely admit I'm not clever enough to understand all the dynamics but the evidence seems to be there that once people start putting shares in their own name and pulling them out of lending and shorting it has a major impact. If taking 40% of shares of one heavily shorted stock out of circulation has such a big impact on the ability of hedge funds to remain solvent - to the extent one US broker is contacting shareholders and offering them high rates of interest (double digit %) to put their GameStop shares into a lending programme - a blockchain based stock market would be huge. I've not seen any evidence to counter this, but I'm always open minded and happy to learn from those who know more.

My trading is only in derivatives so perhaps I’m learning something here. I wouldn’t get involved in a market that bans naked shorting. If you have enough money to cover the margins I don’t see the problem. Equally why wouldn’t hedge funds simply trade a derivative with a bank as it is size and price movement that interests them ? I know this does happen and block trades are posted on exchanges. The problem you are identifying (if it exists) seems to be with retail brokers and clients. I just don’t know why hedge funds were mentioned.

 

[CheeseRolls]

I'm no techie but don't the Albion already control who get's tickets. Also with regard to sell on, what's to stop a tout taking two payments, one registered against the NFT at face value and a separate transaction for their 'admin' fee that goes under the radar?

Better solution to passing on tickets is having an id on the ticket that has to match photographic id at the point of entry. If you can't go you sell the ticket back to the original selling agency for them to resell at face value.

As for away tickets, what do you mean by more effective? Surely the next step is for clubs to issue digital tickets for away fans just as they do for their home fans!

Listing NFTs through a blockchain with a smart contract prohibiting selling at a profit, would offer no opportunity to mark up additional handling charges, postage, online processing charges etc.

The current season ticket solution is a half way house, in that paper tickets and various work arounds are still in place. An NFT "ticket" can sit within a digital wallet, which is linked to your identity via the biometric login on your mobile phone. It doesn't require the turnstile operator to make a call if you still look like your photograph, it doesn't require you to take a photo and then establish that the photo is you AND it doesn't require you to do this to attend a one off match.

Away ticket allocation - currently the club has to guess how many tickets it will sell, apply to the home club, receive, sell and distribute the tickets via post, deal with lost and delayed post, returns. Meanwhile some "loyal" fans are incentivised to apply for away points, for which they are rewarded loyalty points and then promptly sell them on to coked up away dayers, who from experience seem barely interested in watching a game. Digital away fan tickets assume that all grounds have a common ticketing system, which is not the case.
An advanced commit to purchase if available, would give the club accurate numbers to get the right allocation and would simplify the distribution of tickets. If you sell or pass on your ticket you don't get loyalty points. There is nothing to post etc etc.

 

[beorhthelm]

My trading is only in derivatives so perhaps I’m learning something here. I wouldn’t get involved in a market that bans naked shorting. If you have enough money to cover the margins I don’t see the problem. Equally why wouldn’t hedge funds simply trade a derivative with a bank as it is size and price movement that interests them ? I know this does happen and block trades are posted on exchanges. The problem you are identifying (if it exists) seems to be with retail brokers and clients. I just don’t know why hedge funds were mentioned.

i lost a post in server errors. short version, blockchain can remove counterparty risk, make settlement instant. can still play with derivatives, plenty in crypto. at a regulation and governance level, everyone knows the true state of the market.

naked shorts are bad in stocks, because trader have no real market interest in price (the case for shorting), just speculation that can result in blowing up an otherwise viable business. banned for stocks in US i think, but goes on under the radar, and thats definatly a problem.

 

[drew]

Listing NFTs through a blockchain with a smart contract prohibiting selling at a profit, would offer no opportunity to mark up additional handling charges, postage, online processing charges etc.

You really think that there wouldn't be a work around! The tout has an account into which you have to pay the 'admin' fee before the NFT transfer at face value takes place

The current season ticket solution is a half way house, in that paper tickets and various work arounds are still in place. An NFT "ticket" can sit within a digital wallet, which is linked to your identity via the biometric login on your mobile phone. It doesn't require the turnstile operator to make a call if you still look like your photograph, it doesn't require you to take a photo and then establish that the photo is you AND it doesn't require you to do this to attend a one off match.

So you're excluding everyone who doesn't have a smart phone from getting a ticket! Also, not everyone uses biometrics to open their phone, they could use a simple PIN. People lend others their phone

Away ticket allocation - currently the club has to guess how many tickets it will sell, apply to the home club, receive, sell and distribute the tickets via post, deal with lost and delayed post, returns. Meanwhile some "loyal" fans are incentivised to apply for away points, for which they are rewarded loyalty points and then promptly sell them on to coked up away dayers, who from experience seem barely interested in watching a game. Digital away fan tickets assume that all grounds have a common ticketing system, which is not the case.
An advanced commit to purchase if available, would give the club accurate numbers to get the right allocation and would simplify the distribution of tickets. If you sell or pass on your ticket you don't get loyalty points. There is nothing to post etc etc.

Digital away tickets would eliminate most of what you saying including passing on tickets. I don't buy what you say about ticketing systems. The EPL are driving the move to digitalisation and I believe most clubs have adopted it and probably all using NFC technology. If they're not how hard would it be to standardise it (afterall, they would have to for your NFT system!).

 

[Happy Exile]

My trading is only in derivatives so perhaps I’m learning something here. I wouldn’t get involved in a market that bans naked shorting. If you have enough money to cover the margins I don’t see the problem. Equally why wouldn’t hedge funds simply trade a derivative with a bank as it is size and price movement that interests them ? I know this does happen and block trades are posted on exchanges. The problem you are identifying (if it exists) seems to be with retail brokers and clients. I just don’t know why hedge funds were mentioned.

Hedge funds were mentioned because they are the ones that are struggling with retail taking shares out of circulation - basically direct registering is killing them. They say it themselves and say it's "reckless" for the economy. As I understand it. In order to close the illegal since 2008 naked shorts the hedge funds have to buy shares. When they could borrow shares held by brokers they could infinitely do this through essentially creating synthetics buying the same shares multiple times over and no-one would ever know as they transacted between themselves. The story of Sears seems to show this - bankrupted trying to shore up their share price while naked shorted into oblivion through synthetics. Now retail is taking the shares out of circulation by direct registering it's creating problems with liquidity and revealing what's going on behind the scenes: if every month 500,000 GameStop shares are taken out of circulation by retail, as is happening, it's not far off getting to a point where the daily volume sold exceeds the supply. If as a hedge fund I need to deliver 50,000 shares next week, and utilisation is already at 100% and has been for 3 months, then I'm in trouble and paying high interest for borrowing more. If I want to buy them and close my position, and no-one is selling, I'm in even more trouble - that's where they are at right now, and why the price is staying so high despite no logical business reason for it, and why the hedge funds are openly critical of the way retail is acting. It's a game of chicken - can the hedge funds kick the can down the road until retail gets bored or desperate for the money they have tied up? Or will they, like Melvin Capital, get to the point they can't sustain the losses anymore so they collapse? A few of them are under investigation for racketeering and manipulation over precisely this stock (and some others) and they've got good reason for hoping retail get bored.

The GameStop thesis is that either way they're not far off triggering an event that will force a need to identify the legal holder of every share which will cause a massive forced liquidation as all the IOUs and synthetics have to be closed. The fact the hedge funds are saying retail are being reckless about it shows it's working. There's reasonable evidence-based estimates the free float exists several times over due to illegality. One of the catchphrases of that meme stop crowd is "no cell no sell" - a lot of them seem to have parents who lost their jobs and homes in the 2008 crash while the funds got bailed out and bonuses and want to see the fund managers in prison as much as they want to make money. I think if they are right in what they say that's why they will be successful - they are driven ideologically not financially, and enough of them will hold through a squeeze to get the justice they are looking for.

As before, I don't fully understand it, but I've not seen anything that disproves what they say and the funds themselves are giving every indication they are worried, and one has closed down in part because of this - it's very much about the hedge funds. But ultimately it all comes back to evidence that being able to demonstrate ownership of shares will make a significant change to the way the markets are working.

 

[schmunk]

As I understand it. In order to close the illegal since 2008 naked shorts the hedge funds have to buy shares. .

Just to clarify on this, as you've mentioned it a couple of times: naked short selling is now mostly illegal in the US*, but is still legal (albeit 'regulated') in the UK and most other countries.

e.g. (and not a recommendation): https://www.ig.com/uk/trading-strategies/how-to-short-sell-stocks-181115



* although this can, of course, be circumvented with some planning.

 

[Happy Exile]

Just to clarify on this, as you've mentioned it a couple of times: naked short selling is now mostly illegal in the US*, but is still legal (albeit 'regulated') in the UK and most other countries.

e.g. (and not a recommendation): https://www.ig.com/uk/trading-strategies/how-to-short-sell-stocks-181115



* although this can, of course, be circumvented with some planning.

Thank you, and yes indeed. Reading some of the stuff about the collapse of Archegos recently and it seems slightly insane how much gambling / circumventing can take place with people's money that just gets lost.

 

[Mr H]

Of last season’s 20 Premier League clubs, all of them bar one have at least one cryptocurrency sponsor and some have several.

 

[Billy in Bristol]

Of last season’s 20 Premier League clubs, all of them bar one have at least one cryptocurrency sponsor and some have several.

If we are referring to the article in The Athletic then now we are free of Etorro BHAFC are crypto free, lots of damning comments on the rush by the clubs to get their fans to buy tokens etc and how fans have lost money.