The trading has been restored now.
We halted it because forced liquidations of leveraged positions quickly depleted our big reserves of BTC on Bitstamp and when this happens the price tends to become too volatile.
We had to wait for the coins become available on Bitstamp before we resumed trading.
Thanks a lot for your understanding
Giancarlo
Bitfinex Team
Does that mean liquidations have been reversed and lenders money is safe?
Lenders money is safe.
Giancarlo
Bitfinex Team
[/quote]
Everyone,
I'd just like to point out that if we did not have stopped the trading engine, the cascading effect of liquidations would have been terrible (just look at the charts already).
So we DID make the right choice in halting the trading engine to avoid this situation by letting price calm down a bit.
One day the Bitcoin market will become mature enough to support this level of volume, right now it isn't;
THanks for your comprehension
Raphael
Guys,
Even if there was enough BTC on our Bitstamp account, trading would have been halted. Why? Because we would also have "wiped out" Bitstamp orderbook with the cascade of liquidations that were just about to happened. So it's not a matter of having enough funds where or whatever, it's a matter of an illiquid market that became very volatile, and millions of dollars of leveraged positions that would either evaporate or be preserved by calming things down.
If you think you have undue losses because of the halting of trading, please write to
support@bitfinex.com and your case will be examined within a few DAYS.
Thank you for your comprehension,
Raphael
Bitfinex team
BTC-e went down to 102, Bitstamp to 530. No doubt with the selling from BFX, price at Bitstamp would have been lower. Look at the price at BTC-e now: 600 - 650. So, does it really matter? In any case, it is not the exchange owner's responsibility to affect price. The responsibility is to ensure the exchange works at all times.
And for the "millions of dollars of leveraged positions that would either evaporate", this is not a risk the exchange owner should manage for the margin traders. This is a risk the margin trader themselves should know and own.
It is not about profit and loss. It is about the philosophy and the principles of running exchanges.
I understand what you're saying, and if it was only the money of traders at risks, we would have no issues. But we are also talking about the money of all the liquidity providers that would have disappeared in a blink of an eye (because the drop to 100 USD was only the beginning).
I know that liquidity swaps are not insured and CAN be lost, this is very clear in our TOS. However I do think that avoiding millions of dollars of losses for a few seconds of panic can be a good choice. We're not trying to play God, we're just trying to act in the best interest of all of our users, which is why, I repeat, if you think you had undue loss on shorts because of our halting, please write to us on
support@bitfinex.com (and be a bit patient).
We are not taking side for lenders, or for long traders, or anyone, we really try to act in the best interest of everyone.
Raphael
Bitfinex team
so the bottom line is there is no point in margin trading is there
so the bottom line is there is no point in margin trading is there
Well at any rate, it looks like your going to have to find a different exchange if you want to play out the real interesting swings.
It seems for the time being the max you should expect to make from any BFX position is around 5-7% after that its a safe bet they'll halt trading.
Fortunately,
I was in Fiat at the time,
However it would Appear that BitFinex
is willing to go to any means necessary to "Protect Lenders",
But the other side of the coin is that just as Traders know the assume risk
when taking a position we assume that Lenders also take the same risk.
Stopping trading to protect lenders clearly screws the Traders that were in a
Short Position, and any other Traders that may have just wanted to pick up Cheap Coins.
Lenders profit from the incredibly high interest rates they charge and now would appear to
also be at very little risk themselves, one would think that the equation is that they are able
to charge such high interest rates because of the risk that they take, if that risk is going to
be minimized now by BitFinex everytime the market crashes then it would only be logical to
also put a cap on the interest rates that the Lenders are able to charge.
Otherwise it would behoove of all of us to quit being Traders and all become "Lenders" with
the un-equaled amount of "Protection" that BitFinex is affording to it's Lenders.
Unfortunately one will not function without the other, actually Traders can trade without Lenders,
but Lenders can't lend it they don't have an Traders willing to take their loans.
After price rose above 700 I was planning to short the drop, fortunately for me the power went out
in my house, when it came back up one hour later I saw BitFinex price has dropped to 100 and was
currently at 598 (halted price), immediately went to
http://www.mrspeaker.net/btc/ and saw that
all other Exchanges were working fine.
I guess my only question would be one of if Traders in short positions were screwed out of their profits,
and Traders just wanting to pick up some cheap coins, then were the Traders that were in Long Positions
also rolled-back or adjusted in any manner ?
Also at just what price was trading re-initiated ?
I'm looking at BitCoinWisdom and it shows the next lowerest prices after 100 was $527.40,
But that's not correct, when I got my system back up and running the price was frozen / halted at $598,
now price is at $675,
Lost profits and opportunities for all.
No need to implement the "Circuit Breaker" idea,
seems that it's already in effect, manually.
Takes the "Wind out of the Sails"
of the dream of having that Super Short Position one day,
Guess BitFinex won't be making any "Georges Soros" any time soon, lol
http://en.wikipedia.org/wiki/George_SorosCurrency speculation
On September 16, 1992, Black Wednesday, Soros' fund sold short more than $10 billion in pounds, profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.
Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound, earning Soros an estimated $1.1 billion. He was dubbed "the man who broke the Bank of England", In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.
