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

[CambioBTC]

Off-topic question: Who is providing the liquidity for leverage trading on btc-e/MT4? Is it btc-e?

Yes it's Btc-e themselves,
have been told that they don't even
charge interest, don't know how true it is.

[2586]

Feature Request:

How about an option where lenders can decide to "take" the margin call? So if the guy you are lending to defaults (or any guy for that matter) than you exchange your Lended USD against BTC. I bet there is quite some demand for that.

I don't want to buy BTC when the market is moving slow, but in the event of a flashcrash, this feature could stop the cascading effect quite drasticly. Maybe an option where you can decide how much the price have to drop in a given time to set this feature into effect.

As a lender, I really like this idea.

[Speckle21]

I have a suggestion:

From what i understand running out of BTC on bitstamp was what lead to the cascade. How about next time this happens, and the order book moves more than 5% out of sync with bitstamp, that bfx pauses *sell orders*.

So its similar to halting trading, but *limit buy* orders are still allowed.

What will happen is the traders and bots will start to fill in the depleted order book. Eventually sell orders are restored again once the order book depth reaches some predetermined value, like say 1000 Btcs to the bitstamp price. let the sell orders trickle in and if the depth is depleted again and goes 5% out of sync with bitstamp, you once again halt *sells* and resume when the depth rebuilds enough. Meanwhile, you're also sending more BTCs to bitstamp.

This is like a circuit breaker but allows a controlled sell off. The advantage is that because its slow, forced liquidations won't cascade to zero because there will always be buyers willing to fill in with more bids when they see the bitstamp/bfx order books go out of balance. Also i think the number of forced liquidations will be reduced because they are stopped at 5% below bitstamp and only resumed when the bids fill in. eventually there will enough bids to repay lenders and stop the cascade.

The point of halting trading i think is to stop a cascade and destroying the lenders. By still allowing *buy limit orders* placed, we're still giving the lenders their money (since its coming out of the buyers).

If there aren't enough buyers then no worries, the depth never refills and trading is not resumed until the extra BTCs get to bitstamp. This system won't be any worse than the current system of halting all trades until btcs get to bitstamp... at least i don't think it's worse.

This "half-breaker" works both ways, If the opposite happens somehow, you can stop buy orders in the other direction.

Anything wrong with implementing a half-breaker?

The only difficulty i can see is that extra computing power is needed to check if the above conditions are met after every trade. After a sell occurs, check if there is still enough btc in bistamp, if not, check if the last trade pushed the price to 5% below bitstamp price, if true, STOP SELLS.

For very large sells of thousands of BTC you'll also have to break up the transaction into smaller pieces and implement the checks after each piece.

Anyway, could this idea work?

[CambioBTC]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

[Speckle21]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

it was around $617 when bfx restarted,
I'm reaally down because i sold at ~600 hoping to get back in at $550. but just when i hit the buy button the trades were stopped....

[CambioBTC]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

it was around $617 when bfx restarted,
I'm reaally down because i sold at ~600 hoping to get back in at $550. but just when i hit the buy button the trades were stopped....

I was tracking and saw the rise above 700,
which rose to 728,
it was my every intention to short that,
would have been a 198 point gain.

But my power here went out also if you can believe it or not,
then when it came back up BitFinex was halted at 598.

At least I was not long.

Thank God


P.S.:  But 617 is a 87-point
         lost opportunity, whew !

What gets me is that I've sat here in front of this computer
for two weeks straight, Jan 6, 2014 to Jan 20, 2014

and watched a sideways market for 2-Weeks straight,
now we finally get some action and this happens, incredible.

These opportunities are rare, maybe we will be lucky enough
to see lows like this again, that is if I'm not sleep at the time,
just happen to get out of bed last night, and still a double whammie,
power goes out and BitFinex halts trading, talk about "Bad Luck" !

[Speckle21]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

it was around $617 when bfx restarted,
I'm reaally down because i sold at ~600 hoping to get back in at $550. but just when i hit the buy button the trades were stopped....

I was tracking and saw the rise above 700,
which rose to 728,
it was my every intention to short that,
would have been a 198 point gain.

But my power here went out also if you can believe it or not,
then when it came back up BitFinex was halted at 598.

At least I was not long.

Thank God


P.S.:  But 617 is a 87-point
         lost opportunity, whew !

What gets me is that I've sat here in front of this computer
for two weeks straight, Jan 6, 2014 to Jan 20, 2014

and watched a sideways market for 2-Weeks straight,
now we finally get some action and this happens, incredible.

These opportunities are rare, maybe we will be lucky enough
to see lows like this again, that is if I'm not sleep at the time,
just happen to get out of bed last night, and still a double whammie,
power goes out and BitFinex halts trading, talk about "Bad Luck" !

I feel for ya,

At least you can mitigate your risk with a UPS for your computer/monitor/modem and such. It's something proactive you can do.

But the platform halting just hurts, there is nothing we can do on our end about it.

I hope BFX gives us a few days of zero fee trading or something to lessen the sting of these incidents.

[blueberry]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

it was around $617 when bfx restarted,
I'm reaally down because i sold at ~600 hoping to get back in at $550. but just when i hit the buy button the trades were stopped....

Ideally all exchanges should have halted trading at the same time. This would prevent bitcoin price changes during the frozen period and any issues such as yours from happening. Ideally an agreement between the large exchanges to implement a common circuit breaker somehow to halt trading for an agreed period of time when one of the exchanges prices change more than 10% in the space of a minute. If you look at the trade history Btc-e was first to have a flash crash. Bitfinex's flash crash happened 5 minutes later. Had there been a common circuit breaker then Btc-e would have triggered it and halt trading on all exchanges and thus prevent both the Btc-e and Bitfinex flash crashes from happening.

However I guess implementing this would be easier said than done and would require trust between the participating exchanges.

[CambioBTC]

Stamp  dropped  to 530.04  this morning,

Does anyone here know at just what level

BitFinex officially came back on-line for trading again ?

it was around $617 when bfx restarted,
I'm reaally down because i sold at ~600 hoping to get back in at $550. but just when i hit the buy button the trades were stopped....

I was tracking and saw the rise above 700,
which rose to 728,
it was my every intention to short that,
would have been a 198 point gain.

But my power here went out also if you can believe it or not,
then when it came back up BitFinex was halted at 598.

At least I was not long.

Thank God


P.S.:  But 617 is a 87-point
         lost opportunity, whew !

What gets me is that I've sat here in front of this computer
for two weeks straight, Jan 6, 2014 to Jan 20, 2014

and watched a sideways market for 2-Weeks straight,
now we finally get some action and this happens, incredible.

These opportunities are rare, maybe we will be lucky enough
to see lows like this again, that is if I'm not sleep at the time,
just happen to get out of bed last night, and still a double whammie,
power goes out and BitFinex halts trading, talk about "Bad Luck" !

I feel for ya,

At least you can mitigate your risk with a UPS for your computer/monitor/modem and such. It's something proactive you can do.

But the platform halting just hurts, there is nothing we can do on our end about it.

I hope BFX gives us a few days of zero fee trading or something to lessen the sting of these incidents.

Have everything backed up with a APS / UPS,

but they only provide like 5 to 10 minutes at most

of power, what I need to do is install a Gasoline-Generator,

or a monkey on a bicycle, lol  


Having sold at 600 I'm also feeling your pain,

Another Trader's advice to me in situations like

that has been to "Trade the Market, Not Your Position, You can always Find a Good Position / Entry"

Don't Worry about having sold low, make up for it via another good trade.

[unclescrooge]

Hey everyone,

I guess it'll be my last message here for today, sorry I can't answer to every individuals requests. Requests made to our email support will be treated in the next few days, including those who lost money because of our trading halt.

So my point will be these: the liquidations that happened and took the price to 100 were less than 25% of the total leveraged long positions. A lot of traders also have collaterals in BTC. Which means that nor Bitfinex nor Bitstamp had enough depth to absorb the cascading liquidations that would have occured and drag the price to near 0 as ALL long would have eventually be liquidated.

So yes, halting the trading engine saved 15+ millions of dollars. Yes, we will be fair to traders that got caught in a short during these time (again, on support email, not in the thread). If you think we should have let liquidity providers lose everything and close the margin trading for good, I understand. Maybe we halted the trading engine a bit too long. But we do not regret this decision and think this was the fairest decision to take.

One last thing: we are not impacted by the problem of Bitcoin withdrawals MtGox have. When a withdrawal seems to have failed, we use the bitcoin address to do a manual double check. So far this is not an issue.

Thank you all for your comprehension and have a good day
Raphael

[Speckle21]

Have everything backed up with a APS / UPS,

but they only provide like 5 to 10 minutes at most

of power, what I need to do is install a Gasoline-Generator,

or a monkey on a bicycle, lol  


Having sold at 600 I'm also feeling your pain,

Another Trader's advice to me in situations like

that has been to "Trade the Market, Not Your Position, You can always Find a Good Position / Entry"

Don't Worry about having sold low, make up for it via another good trade.

If you have a hybrid electric vehicle a really cool thing a friend of mine did was install a high-powered inverter directly into the car's hybrid battery (not the 12 volt battery, the high voltage one used to run the vehicle). Now the car itself becomes a very powerful portable generator that can run his whole home for a full day on a full tank of gasoline. noise and emissions are also much better than a good store bought generator.

And i realized i just went way off topic. PM me if you want further details.



As for your advice. the real trick is knowing when to abandon a bad position and eat the loss.

[F-bernanke]

....... gone ........vanished like it never happend!

Thats right, it should not have happend to begin with.

[vaguhs]

....... gone ........vanished like it never happend!

Thats right, it should not have happend to begin with.

Why ?

[Spaceman_Spiff]

Hi Raphy or Giancarlo,

Could you just confirm that the flashcrash trades are/will stay rolled back?



PS: Bitcoins occassional volatility makes trading on margin unpractical.  Imho the Bitfinex platform can only survive if there are clear rules about what happens in cases of extreme volatility.  I like both the idea for an automatic pause and the option for lenders to take over the position of the trader during extreme volatility.  Maybe it is possible to enable asymmetric trading up till a certain level during the pause? (allowing shorters to get out of their position while simultaneously helping the severe crash).  I haven't really thought it through, but I think we need to come up with a solid and transparent action plan.
I think traders can live with a world in which they can't profit from flash crashes (but only from 'slow' changes of 10% per hour or so), so long as they feel that they are being treated fairly according to the rules.

[sleger]

Why ?

Because the low is 530. Even NYSE / Nasdaq will bust trades that should not have happened.

[vokhci]

Hey everyone,

I guess it'll be my last message here for today, sorry I can't answer to every individuals requests. Requests made to our email support will be treated in the next few days, including those who lost money because of our trading halt.

So my point will be these: the liquidations that happened and took the price to 100 were less than 25% of the total leveraged long positions. A lot of traders also have collaterals in BTC. Which means that nor Bitfinex nor Bitstamp had enough depth to absorb the cascading liquidations that would have occured and drag the price to near 0 as ALL long would have eventually be liquidated.

So yes, halting the trading engine saved 15+ millions of dollars. Yes, we will be fair to traders that got caught in a short during these time (again, on support email, not in the thread). If you think we should have let liquidity providers lose everything and close the margin trading for good, I understand. Maybe we halted the trading engine a bit too long. But we do not regret this decision and think this was the fairest decision to take.

One last thing: we are not impacted by the problem of Bitcoin withdrawals MtGox have. When a withdrawal seems to have failed, we use the bitcoin address to do a manual double check. So far this is not an issue.

Thank you all for your comprehension and have a good day
Raphael

Hi Raphael,

How would you explain the erasing of the long positions that people had right after the crash as if they never existed? I believe that deleting an already
filled position is a borderline scam. Please correct me if I'm wrong and elaborate.

Thanks.

[F-bernanke]

Read a few pages back in this tread. Basicly Bitfinex's BTC funds at Bitstamp ran out, then the sell orders chewed trough the bitfinex orderbook, and all margin calls hit, causing the price to crash towards zero (in your screenshot the highest bid is only 100), at that time all trading was halted, and rolled back.

[Spaceman_Spiff]

Hi Raphael,

How would you explain the erasing of the long positions that people had right after the crash as if they never existed? I believe that deleting an already
filled position is a borderline scam. Please correct me if I'm wrong and elaborate.

Thanks.

During a flashcrash at the big stock exhanges, trades get reversed too...

[Ente]

I have a suggestion:

From what i understand running out of BTC on bitstamp was what lead to the cascade. How about next time this happens, and the order book moves more than 5% out of sync with bitstamp, that bfx pauses *sell orders*.

So its similar to halting trading, but *limit buy* orders are still allowed.

What will happen is the traders and bots will start to fill in the depleted order book. Eventually sell orders are restored again once the order book depth reaches some predetermined value, like say 1000 Btcs to the bitstamp price. let the sell orders trickle in and if the depth is depleted again and goes 5% out of sync with bitstamp, you once again halt *sells* and resume when the depth rebuilds enough. Meanwhile, you're also sending more BTCs to bitstamp.

This is like a circuit breaker but allows a controlled sell off. The advantage is that because its slow, forced liquidations won't cascade to zero because there will always be buyers willing to fill in with more bids when they see the bitstamp/bfx order books go out of balance. Also i think the number of forced liquidations will be reduced because they are stopped at 5% below bitstamp and only resumed when the bids fill in. eventually there will enough bids to repay lenders and stop the cascade.

The point of halting trading i think is to stop a cascade and destroying the lenders. By still allowing *buy limit orders* placed, we're still giving the lenders their money (since its coming out of the buyers).

If there aren't enough buyers then no worries, the depth never refills and trading is not resumed until the extra BTCs get to bitstamp. This system won't be any worse than the current system of halting all trades until btcs get to bitstamp... at least i don't think it's worse.

This "half-breaker" works both ways, If the opposite happens somehow, you can stop buy orders in the other direction.

Anything wrong with implementing a half-breaker?

The only difficulty i can see is that extra computing power is needed to check if the above conditions are met after every trade. After a sell occurs, check if there is still enough btc in bistamp, if not, check if the last trade pushed the price to 5% below bitstamp price, if true, STOP SELLS.

For very large sells of thousands of BTC you'll also have to break up the transaction into smaller pieces and implement the checks after each piece.

Anyway, could this idea work?

I like that idea.
Some automatic breaker, with the rules published in advance, and a clear message on every page of BitFinex in such a condition.

Please, everybody who still complains, take it to BitFinex email, as they themselves asked for. Or open a thread in "scam accusation", whatever. I don't want to hear it again and again for pages and pages.

To everybody making suggestions here: This sounds like we really can come up with a good plan here. And, as was stated by BitFinex/Giancarlo several times, people who make good suggestions will get some goodies. They are listening to us, lets make the platform go out stronger from this!

Ente

[ledmaniak]

Why ?

Because the low is 530. Even NYSE / Nasdaq will bust trades that should not have happened.

That is perfectly fine, but what happens at NYSE did not happen here. At NYSE they revert it back to an earlier state and then slowly start the market from that state.. That's not what happened here. Trading was stopped and then resumed x time later when the price in the order book of bitstamp was already much higher than the state orders were in before trading was stopped. This resulted in short positions that were losing directly when the trading engine was started again(and many of them were sold at market price). Quite different story..

So what I would suggest next time this happens.. start the market without bitstamp until prices of bitstamp and bitfinex are within a certain margin. This would give people a more fair chance to close their position without any/much loss.