Thanks for your response, Dargo.
It's actually pretty common in Forex to charge on intervals shorter than 24 hours.
No, it is not common. Not sure where your Forex trading experience comes from?
In the bitcoin world, Bitmex charges 0.015% per 8 hours.
Bitmex is a derivatives trading platform offering up to 1:25 leverage. Your maximum leverage is 1:5. Yet you charge 0.2 per 8 hours - highest in the bitcoin world!
We set the fees partly based on what it costs us for the funds, which are loaned to us, but also based on the risk that we take in offering margin trading, which is considerable.
Current USD and EUR LIBOR interest rates - maturity 1 year are less than 1%. You say that your 21.9% p. a. charge is "based" on what it costs you for the funds? You can say the same if you charge 121.9% or 1121.9% p. a. Why is that partnership with Fidor Bank if you can't borrow at 4-5%, which is even higher than current prime rate?
There is no market liquidity risk for you because forced liquidation is set at 40% of margin collateral (5% is for a standard Forex account). The fact that you increased maximum leverage from 1:3 to 1:5 is indicative that you understand that such risk is negligible. Of course, there will be a substantial risk if you use funds on customer accounts to fund/optimize margin trading. This is not something I'd recommend for any established bitcoin exchange!
Also, we recently lowered our trade fees by quite a lot, so for many people the increase in margin fees is more than made up for by the decrease in trade fees, especially for those who usually provide liquidity (make) rather than take liquidity.
This is something I don't understand. Why would makers be more important than takers? "Takers" provide volume. What liquidity are "makers" providing? Without "takers" there will be no trading at all. I suspect that all the "makers" and "takers" gimmick is designed to resemble Bitfinex practice of liquidity providers but without paying interest on customer funds used to provide liquidity. "Takers" are privileged in terms of lower trading fees because their funds are practically locked as margin collateral from the moment they place their order until this order is executed or canceled. And locked funds can be used to fund margin trading?! But this is very, very dangerous practice both from market and technical point of view. No increase in rollover fees can justify taking such a risk!
But right now the rate for BTC is a little bit higher than the rate for USD, which is unusual.
Good.
So, things on Bitfinex get back to normal. Question is, can they survive going back to normality?
Obviously if demand goes down then so does our risk, so it's a matter of finding the right balance in terms of having good demand but also covering our costs and risks.
Obviously, Kraken will continue to increase their fees and charges until demand goes down. But as corporate history shows, once such a point is reached, if you decrease your fees and charges demand never goes up to previous level. Your customers are already someone else's customers.
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