Circle buying Poloniex and why it's making STEEM price go down temporarily.

in #bitcoin6 years ago (edited)

This week Circle purchased the alt-coin exchange Poloniex for 400 Million USD.

At the time of this post there were 50 million USD worth (14,479,783 STEEM and 471,577 SBD) stored at Poloniex account @Poloniex

  • Poloniex.com was one of the large exchange allowing STEEM and SBD trading.

  • Poloniex's STEEM wallet has been neglected / "Under maintenance" for more than a month.
    (Last outgoing transfer was on Jan 27th)

  • Circle is a Goldman-Sachs backed company thus will have stronger commitment KYC/AML regulations.

People trading cryptos prefer to be anonymous so a lot of accounts might be registered with fake identities. There is a very high chance that the new administration will want to strengthen identification requirement and freeze some account awaiting of further verification.

Transition risks, When exchanges change ownership and change operation team members there is an increased risk of major fuck-up like insiders hack and crypto theft.

Right now the only way out of Poloniex for STEEM holders is to SELL their STEEM/SBD and withdraw through functioning cryptos like Bitcoin.

For as long as Steem wallet is offline and the transition is happening I expect prices to be be lower at Poloniex and for other exchange to sadly follow Poloniex prices.

On the good side, the extra cost you'll be paying at other exchanges will most likely turn out to be a great discounts once "Poloniex 2.0" fixes it's Steem wallet and improves overall.

Brighter future:

Given how bad Poloniex customer support was, how little improvement they made to their exchange and the very few new coins support I think it can only get better.

Circle has a very solid banking relationship. If they enable Fiat on-ramp it would make STEEM market much more easily accessible to outside investors.

If you have STEEM stuck at Poloniex, I'd be interested to know why (after so many outages) and what do you plan on doing with it during the transition?

Sort:  

Goldman is not getting into this game to simply allow a substandard entity to continue that way.

The big question few seem to ask about this deal is why is Goldman doing it? Many seem to think to get into the crypto game....to learn who has tokens...etc...

I think the answer is simiple...trading profits. Goldman wants them. There is a lot of money to be made trading crypto and this is what Goldman seeks. Their trading department is one of the most profitable aspects of their business.

I didnt know about the STEEM wallet...thanks for that information. I am not too concerned about the price of STEEM...I just posted an article how Steemit was in an article yesterday on Bloomberg's site. Publicity is starting to come.

Selling pressure is never a good thing if one is looking long. It might take a while for this situation to clear out. Of course, right now, it seems the bigger bear in the room is the fact that BTC is stalling out. That is still a main driver for all the crypto world.

As a long term holder of STEEM, for me, development is the most important thing. The ones who are hacking away at code are the ones creating the magic.

Thanks for this post.

Trading profits will not help them saving their business model, once it gets disrupted. Not too far in the future, trading will anyway take place on decentralized exchanges and even peer-to-peer. And this for all assets, not just crypto. I´m not sure wether they grasp that already.

I agree with you @shaka.

Of late, I am on the decentralized bandwagon. This is what we need to promote to the masses. Most of them buy into what the MSM tells them which is driven by the banksters. They are going to be warned about how dangerous decentralization is with no authority to oversee the bad players etc.....

As for them grasping it, I do not believe the banksters have any clue. Their arrogance gives them a bling spot. Plus, every threat in the past 100 years, they were able to legislate or buy their way out of. Why would they think this time any different?

Of course it is...which means they will be caught totally off guard.

Decentralization is simply too powerful for them.

The truth is that, after trying to understand this, I have realized that it is something that revolutionizes all forms of human communication. Right now we can create decentralized companies, States through lines of code, return to remunerate those artists who were left without digital rights after the Internet boom, reinvent unions ... and much more.

A couple of examples that could be implemented on this structure in which society would radically change the way it works ...

The first type of organization I can think of would be a company through which I can join with other people to create wealth and share the benefits transparently.

The second would be the classic State, but with decentralized voting systems and the owners of the State would be its shareholders, and could even negotiate the services that the state provides them and the commissions, which are no longer imposed.

I hope you correct me if I'm wrong about something after reading them to you @transisto @ taskmaster4450 @shaka
Greetings from Venezuela

I will go you one further with the company idea.

How about forming a company on the blockchain that has nobody running it. That is a DAO 9or DAC). It is purely code that makes decisions according the the decision tree programmed in. The company is overseen via consensus.

Steemit is somewhat in that form although not totally. But we can see that in the future.

As for the state, look up Estonia digital citizenship. It is already starting. At some point, we will see countries that arent established via geographic boundaries but by digital ones. Could steem be a country where people work, interact, shop, and play on it? We might see things forming around the digital realm as opposed to geographic.

Following for reference. Fascinating insight presented here. I was invited to try out Steemit less than 3 months ago and it has already become a positive in my life, even producing a well discipline I'm now exercising. Steemit presents a new lucrative venue for myself to produce a passive income stream to support and promote my artwork. In this way, Steemit has far exceeded my initial impressions, my expectations have elevated to prospective business plans.

I'd say leaving faith to following the former route when the way changes so much, there's too often lost of opportunities to those caught up in the terrain.

Have either of you picked up on @steembasicincome or @earthnation?




Time is Art. In Life, all we have is Time. Why not make Art all the Time?



ASC_EN_Original.png
I am a proud @earthnation Steemit Guild Community member!
Thanks to their loyal support, I am able to create a passive income stream that funds my creative output and delivers this original content directly to YOU.

Yup, selling STEEM when the prices go down wouldn't be the smartest thing to do when you think about all the potential it has. Since more and more people start to notice STEEM it's bound to be much bigger than for what it is right now...

We just gotta maintain a positive mindset and HODL our precious STEEM for the long term! I never even look at the prices of STEEM, because I don't care if it goes down a bit, because it will be worth much more in the future :)

You read my writings...I dont have a problem with a positive attitude about STEEM and dont think anyone else should either. It is one of the few givens in life (as long as the developers produce what they profess they will which I have confidence in them achieving).

I think too many people really overlook the nuances of what is here. The fact that STEEM is going to make all tokens created on here liquid means a vast amount of it will be pulled from circulation and put into the exchange pool. The fact that more than 60% of STEEM is held is SP means a great deal at reducing the liquidity of STEEM on the open markets...another thing to drive the price up..

Or that bandwidth is used in lieu of transactions fees...and that is priced in STEEM.

Haha, there's just so much to look at when it comes to predicting the price of STEEM in the future, it's almost impossible to remember and take into consideration everything that is already here and what will be added in the future... I'm very excited for all that is to happen on this Blockchain!

Yeah and then the technological shifts that we both know are taking place over the next decade.

What happens when unemployment due to automation starts to his with any degree of force? What are people going to do? Since nobody is talking about that now, turning to the government wont work since they will be too slow to react.

STEEM really is a great answer, especially for those who get in early like we are.

Powering up now will pay huge dividends in 6-12 months.

Yes, exactly. Technology is not going to slow down and we'll see a lot more automation and this will lead to more unemployment. Obviously STEEM is probably the best answer to solve that problem!

Yes. THIS is the mindset I also share.

Power up up up and destroy my slave debt, while building a sustainable life without the help of gubberment.

YES!

@biffybirdcam do you think people who agree with government would share that view of technology?

Development and a community that backs and uses it is what should give cryptos value.

Yeah, it totally should. But this has not really been what has been happening with cryptos in the last few years, so hopefully this will change. Steem has a great utility value, and I expect the market to catch up with this at one point, and then we hodlers will have a nice time :)

Goldman Sachs are a bunch of crooks who profit from others' misfortune. These guys send stocks plummeting by bad mouthing the company, then turn around and buy the stocks while they are down. I really don't get why anyone listens to these evil people anymore after the 2008 financial crisis. I certain am not happy about them delving into the cryptocurrency game. They are already pulling their usual crap; one minute saying that they wouldn't touch BTC ever, and now they buy an exchange. Slimy!

Agreed. I just see it as a good time to buy - it's almost asif it were summer 2017 again!

I agree STEEM is along term investment and BTC needs to lead the way. I think sideway action on BTC could be good since it ran so much.

GS is doing it to crush cryptos and protect the primacy of the USD. It's currency war.

Goldman, JP Morgan et al. realized the threat that crypto imposes on their businesses. Meanwhile they stopped to ridicule crypto, now they take action. They can't control the blockchains but the entry points into the markets. And they will check with great interest who these crypto-holders are.

Thanks for information

I learned my lesson and won't go back. Took almost 2 months to get my 3k STEEM back. I've never seen a company with worse customer support. To me, that shows a complete lack of respect for their customers who provide all the value they enjoy.

Thank god bittrex was up around that time. Poloniex was too complex for me as newbie.

I agree with you, @lukestokes. I don't get why a company would think that it is okay to freeze the funds of customers for almost two months. This is even worse than PayPal, which is arguable notorious for having a bad costumer support, yet it seems better than Poloniex's!

At least this buyout can only make Poloniex better, because it's not like they can get much worse at this point.

I was really worried, given the poor customer service, that this was a sign of really poor management and that poloniex was going to get hacked or have some sort of meltdown. This would have sent the cryptomarkets into a tailspin given poloniex is such a large exchange. I am more positive now with the new management.

I'm really glad your worries did not turn out to be true. I can only imagine how badly this would have hurt the entire crypto community.

The new management certainly has a big job with improving the reputation of the exchange, but I'm sure it can be done. While I'm not a big fan of the exchange right now, I certainly wish them well, and hope they are able to succeed with their mission to improve :)

I never use Poloniex myself but seeing your c0mparision with paypal gave me some insight.Paypay robbed my more than $10 K just because I wasn't from USA.

Yeah, never liked Poloniex and I sure wouldn't like it any better with Goldman Sachs getting involved in them.

It was only a matter of time before the banksters started moving into cryptos. Way too much money being made here for them not to get their taste!

I think poloniex steem quantity has out of balance.

To hear the speech version of this post click the play image.

Brought to you by @tts. If you find it useful please consider upvote this reply.

very, awesome idea for a profile @tts Could you do that to some of my post too?

This is an amazing idea!

@transisto good one, I made a post on this topic as well, please check it out!

https://steemit.com/crypto/@liotap/circle-s-poloniex-acquisition-and-meaning-going-forward

okay, thank you that's a good observation for whats going on

I have steem stuck in poloniex, and have written a ticket. However, there is no response, that make me very disappointed at Poloniex. Considering that the trading volume of POLO is much lower than before, perhaps I won't use it in future.

Waiting to see steem pump to moon

Coin Marketplace

STEEM 0.30
TRX 0.14
JST 0.039
BTC 61845.76
ETH 3419.37
USDT 1.00
SBD 4.93