Thoughts on Bitfinex statistics?

[mccoyspace]

Hmm, I've only known about Bitfinex for 4 days now   So you are saying that most of the time the interest rate to keep the money lent out is more like 12%, hey?  It all makes more sense if that is the case.

I see it mostly linger around the 20-30% apr range. Hell, I still have a loan held with BFX that is at 29%

20-30% is still awesome on a USD deposit.

I guess one risk is that the borrower's aren't liquidated in time during a severe crash, in which case your losses (on uninsured loans) would be correlated with your bitcoin losses.  This would defeat the "diversity" we may believe we are achieving in our portfolios.

Hmm, what is an appropriate % of net worth to invest with Bitfinex....

They have a loan insurance pool available to handle those situations. If you take the insurance then the exchange will make you whole if the market drops before margin positions can be liquidated. They charge 30% of your interest payments for that service (2/3 of which go towards building up the insurance pool).

[1715094190]

1715094190

[Peter R]

Thanks for answering my questions mccoyspace.  Cheers!

[Pruden]

I wish the insurance pool were not empty most of the time. Still, I'm very happy with Bitfinex.

[unclescrooge]

Hello,

It is indicative of a market that is getting overheated. This does not mean it is going to crash right away but when it does, the crash will sharp and violent. The BTC will then end up in stronger hands namely those who own the BTC outright and / or can borrow USD or other fiat at more reasonable rates say well under 10% APR.
 
I also suspect that the correction / crash will start in China.

You were right 100%, impressive

SheHadManHands, yes that's a sign of bullish market, but at the same time, that doesn't mean they are generally more informed than others.

Just wait until the rally gets going full steam! In March/April there were rates as high as 8000%+. When Bitcoiners panic, they panic hard

Well, it won't go that high because we now have some more "strict" limit (1% per day, if you call that strict). Unless people borrow directly at higher rates, but then that would be quite a bull run.

But it makes no sense that if you ran bitfinex you down't go to the bank and borrow HAND OVER FIST at whatever joke QE interest rates are being offered by central crony banks, and then lend it out at insanely profitable rates to BTC shorters.

True. And we have been approached for this. But this P2P lending thing is our "touch" and a unique feature, so we don't want to stop it. It makes it more expensive for the traders, but it's still possible to be REALLY profitable with these rates, and it provide "small" investors with a way to get real return on their debased currency. So no we won't go to the bank and kill our P2P lending

Perhaps they'd rather hold BTC themselves

About the insurance pool, yes it's empty most of the time. Still by now, you can see that "normal" crashes doesn't cause any problem. It would be the death of Bitcoin that would really pose a problem.


Anyway, have a profitable day

Raphael
Bitfinex

[Sukrim]

Just wait until the rally gets going full steam! In March/April there were rates as high as 8000%+. When Bitcoiners panic, they panic hard

Well, it won't go that high because we now have some more "strict" limit (1% per day, if you call that strict). Unless people borrow directly at higher rates, but then that would be quite a bull run.

...WHAT?

Where is that documented and since when is this in effect? I used Auto-Lend with VIR as a easy mechanism to provide funds and still gain if there is a jump in the market but I was already quite disappointed by the returns from this rally... Is only the increase capped or the decrease as well? Why do you regulate this kind of stuff with hidden undocumented algorithms anyways instead of having an open market for lending rates?

[vokain]

Just wait until the rally gets going full steam! In March/April there were rates as high as 8000%+. When Bitcoiners panic, they panic hard

Well, it won't go that high because we now have some more "strict" limit (1% per day, if you call that strict). Unless people borrow directly at higher rates, but then that would be quite a bull run.

...WHAT?

Where is that documented and since when is this in effect? I used Auto-Lend with VIR as a easy mechanism to provide funds and still gain if there is a jump in the market but I was already quite disappointed by the returns from this rally... Is only the increase capped or the decrease as well? Why do you regulate this kind of stuff with hidden undocumented algorithms anyways instead of having an open market for lending rates?

Honestly I still don't really understand the variable interest algorithm either.

[Sukrim]

It used to be an average of all interests, until someone managed to lend out something like 0.00001 USD for a few million % for a day, driving VIR so high that nearly all VIR loans were incredibly expensive and borrowers were force liquidated.

I'm not too sure why it is not possible to make VIR simply: (sum_of_all_interest_paid_in_the_last_hour/sum_of_all_loans_taken)*100 (times 365 then, to get a yearly number - while for traders everywhere they only see daily numbers by the way!).

Currently it seems to be something along the lines of an average of all loans in the past few days but capped at something to make it not change that quickly (even though Bitcoin can change much faster!). Seems I really need to build a lending bot after all that places orders instead of trusting that VIR gives even decent returns (it does NOT, compared to the market).