[BETA]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[myself]

I would be a great feature to keep the loans.

the question is another, let me put some context on this
I mean for example you take a loan for 1 year at 150% APY and the rates goes down to 90% APY will you like to be forced to pay 150% for one year ?

Another feature that I'd love to see is the ability to close out a position when a total profit of x.xx or x% has been made.

So basically it would take both the P/L and Swap into account, and if together they were at the target value, then it would close out your position.

if you are long 100 BTC from 100 just put a sell order for 100btc at 120usd and the position get closed when the price gets to 120 the oposite works when you are short

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[MrJMassey]

Hello all...

I'd like to know what the traders consider crazy or outrageous interest rates.  I'm new to Bitfinex and the lending feature is what I've done the most for the past 17 days.  Over that time, I've received interest rates ranging from 50% to 2400%. 

I'm curious to know what the consensus is regarding interest rates among the traders.  And if you do choose to respond, please indicate what time zone you're in.  I've a theory that geolocation plays into this decision and I think it would make for interesting information.

J.

[Ichthyo]

I'd like to know what the traders consider crazy or outrageous interest rates.

The answer is quite simple: there is no such fixed level, which seperates acceptable from outrageous offers.

As a trader, you break down the APY to daily rates. Then you ask yourself: can I make XX% of profit per day, when averaging over about one week (since day trading doesn't work out well every day). To put this into perspective: If we're at $130 / BTC, the question is: will I be able to lock into a positive price movement of e.g. 3$ each day on average, including all the difficulties of getting in and getting out? Then taking an 600% APY loan would be ok.


PS: I'm living in Europe

[wamatt]

Raphael, why has my Margin Requirement changed to 10%? Not happy.

[Sukrim]

I guess to put it into perspective: to get 1% a day after fees you need to lend out money at ~405% per year. There seem to me looking at charts to be many opportunities of movements that are much larger than that and leverage makes this even more volatile.

As I'm currently busy over the weekend, I just put my money in vir loans and eat the loss of not managing them properly.
If however loans are soon not returned after a position closes, I really need to change the expiry date for them. Currently I just leave them at the default 60 days since they get returned so quickly anyways. With the recent loan swapping, compared to buy and hold or even most basic trading strategies like crossing averages the percentage that lenders get is now down a lot I think.

Maybe consider displaying loan interest also as daily rates? It sounds like a lot when you look at 150% apr, but it means less than 0.5% a day which should be doable at current volatility for even a mediocre skilled monkey.

[urwhatuknow]

Raphael, why has my Margin Requirement changed to 10%? Not happy.

Wamatt

Margin requirements are adjusted depending on volatility.
Increasing margin requirements during volatile moments decreases the chances of a forced liquidation and protect both Bitfinex and the trader.
Increasing margin when volatility spikes up is common practice in every trading site offering leverage to its customers.
Please notice that this doesn't not apply on existing positions, but only on new ones.

I hope this helps

Giancarlo
Customers Relations
Bitfinex Team

[temporalcausality]

For example, let's say you want to open a long position for 100 bitcoins. That means you want to buy 100 bitcoins hoping to the price will go up. The system will borrow for you 100 * the bitcoin price US dollars (let's say 1300 USD) from lenders, at the best rates available.

You are going to leverage bitcoins by a factor of 100?   That is just plain impractical considering how much the market can move in a day.  Even with forex, leveraging by 50 is risky and that only moves by a few percent a day at most.   Bitcoins can change value by 50-100% in a few minutes, resulting in gains or losses of up to 10000%?

Who is providing the leveraged funds?   What happens if you can't hit a stop loss because the exchanges have a trading lag?   

[MrJMassey]

Hello...

I just thought of something as a feature request that I'd like to share. I don't really need notification email, I'd prefer a text message!  Also, if there was an option that we could set that would send us a notification when I've had $XXX.00 sitting waiting to be used after YY:ZZ hrs:minutes that would be awesome.

So in example, I would be able to set an option that would send me a text message when $500.00 or more was sitting unused for more than 2 hours and 30 minutes.

J.

[wamatt]

Margin requirements are adjusted depending on volatility.
Increasing margin requirements during volatile moments decreases the chances of a forced liquidation and protect both Bitfinex and the trader.
Increasing margin when volatility spikes up is common practice in every trading site offering leverage to its customers.
Please notice that this doesn't not apply on existing positions, but only on new ones.

Ahh, ok thank you. The reason I was a bit anxious is I had an outstanding position for more than a day, and the Margin Requirement display changed while my position was still open, hence I thought my actual Margin Requirement on my position had changed too, which would have been unfair. I checked with a friend, and they saw the same thing.

Other than that specific issue above, as you say changing requirements in response to volatility is commonplace, so I'm ok with that.

[molecular]

Hello all...

I'd like to know what the traders consider crazy or outrageous interest rates.  I'm new to Bitfinex and the lending feature is what I've done the most for the past 17 days.  Over that time, I've received interest rates ranging from 50% to 2400%. 

I'm curious to know what the consensus is regarding interest rates among the traders.  And if you do choose to respond, please indicate what time zone you're in.  I've a theory that geolocation plays into this decision and I think it would make for interesting information.

J.

I've played both roles. I don't borrow above %200 (unless really short-term or by mistake) and I try not to lend below %800. If I do it's only short periods (up to 7 days).

[oakpacific]

I see the Bitstamp orders, very nice, testing it out!

I predict that very soon the arbitrage opportunity between Gox and Bitstamp will disappear, while the Bitfinex volume will spike up.

[BurtW]

I see the Bitstamp orders, very nice, testing it out!

I predict that very soon the arbitrage opportunity between Gox and Bitstamp will disappear, while the Bitfinex volume will spike up.

FAR OUT!  This is a great accomplishment and thank you.  BitFinEx just became the best trading platform.  Which exchange is next?  CampBx, BTCe, or both!!!

[oakpacific]

I think it's by far the only real work done in the direction of decentralization, other people are either just talking or still at the planning/prototyping stage.

[myself]

dat spread   

[urwhatuknow]

I see the Bitstamp orders, very nice, testing it out!

I predict that very soon the arbitrage opportunity between Gox and Bitstamp will disappear, while the Bitfinex volume will spike up.

FAR OUT!  This is a great accomplishment and thank you.  BitFinEx just became the best trading platform.  Which exchange is next?  CampBx, BTCe, or both!!!

CampBx is located in Georgia (USA) and therefore complies with Fincen regulations.
Recently Bitfloor and a bunch of other minor trading places in the USA decided to shut down (or had their bank accounts shut down) due to the Fincen ruling that prescribes BTC exchanges to comply with anti-money laundering rules.
Therefore it becomes too dangerous for us and our customers to allow them trading on any US based trading site until further evidence that the US bias is not against Bitcoin (I'm afraid we will have to wait for a while).

On the other hand BTC-e, being located in Russia, offers very scarce possibilities of USD withdrawal and due to this fact the spread between their BTC/USD quotes and MtGox ones are normally huge (like 7-10%).
This makes it impossible to be used as a third party partner.

Amazingly the Bitcoin trading market doesn't offer too many options and even though we would love to be able to give more options to our customers we don't see any viable alternative at the moment.
We will keep our radars on and as usual be open to any possible suggestion.
But please before suggesting anybody be aware that size matters and we can't consider any option that trades on average below 5,000 BTC per day.

Have a great weekend

Giancarlo
Customers Relations
Bitfinex Team


 

[BurtW]

It is too bad the USD withdrawal issue cannot be solved in some creative way as Bitcoin charts has btceUSD volume at > 5,000 BTC for the last 24 hours and in fact btceUSD 30 day USD volume is higher than bitstampUSD.

It is hard to believe that we are actually down to just two places to trade USD for BTC.

Another question:  Besides all the effort on your part what would be the downside to adding a very small exchange, vcxUSD as an example.

[Ploo]

Nice to see bitstamp support!

I'm looking forward to a time when the top 10 bitcoin exchanges handle no more than 10% of the trade each and meta-exchanges like bitfinex allow you to take advantage of the liquidity on all of them.

I'm really curious how you manage to have fiat on the right exchanges at the right time though, especially now that you are handling two third party orderbooks. Would you care to shine some light on that?

[btcmind]

Two questions:

1) Are fee rebates of MtGox (or Bitstamp) passed through?

2) Why do I have only BFX as a routing choice? The FAQ states: "You can choose to execute your orders only on mtgox, or only on bitfinex, for example; that's the routing feature."

[unclescrooge]

Hello everyone,

Nice to see bitstamp support!

I'm looking forward to a time when the top 10 bitcoin exchanges handle no more than 10% of the trade each and meta-exchanges like bitfinex allow you to take advantage of the liquidity on all of them.

I'm really curious how you manage to have fiat on the right exchanges at the right time though, especially now that you are handling two third party orderbooks. Would you care to shine some light on that?

Sure. First we begin to have enough assets to put a lot in the two exchanges while keeping the rest safe in our cold wallet and bank account.

Secondly, if there is a shortage of funds in one of the exchanges, you will not be able to buy (if its a USD shortage) or sell (if BTC shortage) on this exchange, until the shortage is gone. Simple as that.

When this happen on Mtgox, you will get a "NO RESERVE" error and the order will stay pending. When this happen on Bitstamp, Bitstamp orders will simply be ignored and the order will be executed on BFX or Mtgox. THis behavior may change in the future depending on respective volume.

Now our job is to make sure there is always enough balances on all third party exchange

Two questions:

1) Are fee rebates of MtGox (or Bitstamp) passed through?

2) Why do I have only BFX as a routing choice? The FAQ states: "You can choose to execute your orders only on mtgox, or only on bitfinex, for example; that's the routing feature."

1: We have our own fee schedule. For Bitstamp we don't want to make too much competition, for Mtgox the fees allow us to deal with requotes which happen a lot with them (due to them caching their orderbook and not wanting to give us real time access even though we are ready to pay high for it and make quite a high percentage of their trading volume. They just don't give a fuck).

2. I added Bitstamp routing option, Mtgox may come later.

I have some cleaning to do in the FAQ and explanations pages

Have a nice day
Raphael
Bitfinex team

[unclescrooge]

It is too bad the USD withdrawal issue cannot be solved in some creative way as Bitcoin charts has btceUSD volume at > 5,000 BTC for the last 24 hours and in fact btceUSD 30 day USD volume is higher than bitstampUSD.

It is hard to believe that we are actually down to just two places to trade USD for BTC.

Another question:  Besides all the effort on your part what would be the downside to adding a very small exchange, vcxUSD as an example.

I know BTC-E would be good, but they are always far below the price of Mtgox/Bitstamp, and our USD reserve would be quickly exhausted and we would have to keep sending them money.

For the other questions, apart from development and funds management there is no other downside. It's just a matter of cost/benefits, we'll see in the future which exchange can be added. As Giancarlo said, we are open to suggestions.