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Author Topic: Pretty much same trading volume - Mt.Gox and Bitcoinica  (Read 3641 times)
fastandfurious
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September 14, 2011, 12:46:39 PM
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If I look at you page for the last 24 hours and also look at clark moodys page with volume for MT.Gox, you/Bitcoinica have right now pretty much the same trading volume. If this is accurate, this is very impressive. Mt.Gox have been around for ever and you like less than one week. This tells me also that you don't hedge your positions in a large way. Or are you hedging some of the positions through Tradehill? But it shouldn't make any difference, because Tradehill have much lower volumes.

What kind of positions have people taken, I mean is this a new gamble site with high leverage (average user)? Or have like miners (a guess) taken low leverage positions to short the market (so they now exactly what they are going to sell their Bitcoins for)?
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September 14, 2011, 12:49:40 PM
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Bitcoinica will be a short time phenomena. It will last till people realize leverage makes absolutely no sense for trading bitcoins.
It only makes sense in the fiat forex market because is influences inflation. Big players use it there to benefit from micro-trading tactics.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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September 14, 2011, 12:52:12 PM
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Bitcoinica will be a short time phenomena. It will last till people realize leverage makes absolutely no sense for trading bitcoins.
It only makes sense in the fiat forex market because is influences inflation. Big players use it there to benefit from micro-trading tactics.

I disagree. I think it will stay and there will be other services like it. I would like to see another service that uses the bitcoinica API to add an additional level of margin trading and short/long options on top of bitcoinica the same way bitcoinica sits on mtgox.

Additionally I'd like to be able to margin trade and short/long the alternate currencies.

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zhoutong
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September 14, 2011, 01:45:21 PM
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If I look at you page for the last 24 hours and also look at clark moodys page with volume for MT.Gox, you/Bitcoinica have right now pretty much the same trading volume. If this is accurate, this is very impressive. Mt.Gox have been around for ever and you like less than one week. This tells me also that you don't hedge your positions in a large way. Or are you hedging some of the positions through Tradehill? But it shouldn't make any difference, because Tradehill have much lower volumes.

What kind of positions have people taken, I mean is this a new gamble site with high leverage (average user)? Or have like miners (a guess) taken low leverage positions to short the market (so they now exactly what they are going to sell their Bitcoins for)?

In order to protect Bitcoin traders, I cannot disclose the overall positions of my customers. However, I can give you a figure: (+/-) 1709.63 BTC. This is the "net positions" after canceling off. I'm not going to tell you which direction it is.

If not wrong, Bitcoinica is accounted for about 15% of the trades at Mt. Gox (please note that the 15% means we act as a counter-party in 15% of the trades, which means 7.5% of turnover) in the recent 24 hours. We haven't started hedging at TradeHill yet. We will design an algorithm to fit in TradeHill's thinner order book so that we can technically stabilize both markets at the same time. (Sort of non-profitable arbitrage, purely for the interest of our customers. :-D )

Our hedging volume is twice as much as "net positions" because the distribution of orders is not very even. (Suddenly a lot of long and suddenly a lot of short.) Usually we can hedge a bit less and make a bit more on spreads when the prices fluctuate a lot. (Ironically, our customers are more random when prices move a lot.)

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Spacy
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September 14, 2011, 02:04:32 PM
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Why would you trade on a platform where you bet against the platform owner?
zhoutong
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September 14, 2011, 02:38:33 PM
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Why would you trade on a platform where you bet against the platform owner?

We're market maker, yes.

But we don't bet against our customers.

Why should we take the risk when we can comfortably earn the spreads and hedge the customers' orders elsewhere?

You can sign up for an account and see our historical prices. We are completely open about this data. If you want all our 120,000 ticks so far, I can export for you. Then you can compare with Mt. Gox prices.

Bitcoinica's price is extremely accurate - our highest on 9/11 is 7, not the ridiculous and non-tradable 15. If you short on Bitcoinica you won't be liquidated because of that. We use an algorithm to manage the prices with absolutely no human intervention.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
fastandfurious
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September 14, 2011, 03:12:58 PM
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Makes sense. Thanks for the update.
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September 14, 2011, 03:43:23 PM
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Why would you trade on a platform where you bet against the platform owner?

We're market maker, yes.

But we don't bet against our customers.

Why should we take the risk when we can comfortably earn the spreads and hedge the customers' orders elsewhere?

You can sign up for an account and see our historical prices. We are completely open about this data. If you want all our 120,000 ticks so far, I can export for you. Then you can compare with Mt. Gox prices.

Bitcoinica's price is extremely accurate - our highest on 9/11 is 7, not the ridiculous and non-tradable 15. If you short on Bitcoinica you won't be liquidated because of that. We use an algorithm to manage the prices with absolutely no human intervention.

A bit off topic - but have you any plans to create a Mandarin version of your website (and other languages)?  I think you are in a strong position to impact on the Chinese uptake of bitcoin (您是中国人吗?)
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September 14, 2011, 04:02:21 PM
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Bitcoinica will be a short time phenomena. It will last till people realize leverage makes absolutely no sense for trading bitcoins.
It only makes sense in the fiat forex market because is influences inflation. Big players use it there to benefit from micro-trading tactics.

Huh

The ability to short-sell and buy on margin is not a short-term phenomena. Any person who desires leverage will find this service useful. If you KNOW bitcoin will rise or fall, then this offers you a chance to make much more money. Bitcoinica's effect is good both for traders/speculators/investors and also for Bitcoin as it permits a greater variety of pricing means.
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September 14, 2011, 04:46:22 PM
 #10

Bitcoinica will be a short time phenomena. It will last till people realize leverage makes absolutely no sense for trading bitcoins.
It only makes sense in the fiat forex market because is influences inflation. Big players use it there to benefit from micro-trading tactics.

Huh

The ability to short-sell and buy on margin is not a short-term phenomena. Any person who desires leverage will find this service useful. If you KNOW bitcoin will rise or fall, then this offers you a chance to make much more money. Bitcoinica's effect is good both for traders/speculators/investors and also for Bitcoin as it permits a greater variety of pricing means.
My point is unless you have significant funds you will get a margin call way too often and if you do you probably have better uses for your money.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
zhoutong
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September 14, 2011, 04:47:20 PM
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Why would you trade on a platform where you bet against the platform owner?

We're market maker, yes.

But we don't bet against our customers.

Why should we take the risk when we can comfortably earn the spreads and hedge the customers' orders elsewhere?

You can sign up for an account and see our historical prices. We are completely open about this data. If you want all our 120,000 ticks so far, I can export for you. Then you can compare with Mt. Gox prices.

Bitcoinica's price is extremely accurate - our highest on 9/11 is 7, not the ridiculous and non-tradable 15. If you short on Bitcoinica you won't be liquidated because of that. We use an algorithm to manage the prices with absolutely no human intervention.

A bit off topic - but have you any plans to create a Mandarin version of your website (and other languages)?  I think you are in a strong position to impact on the Chinese uptake of bitcoin (您是中国人吗?)

Excuse me English users, I will reply this post in Chinese.

是的,我现在在新加坡学习。可惜目前我还没有打算把 Bitcoinica 做到国内市场去。中国的银行业和证券业对于投资者的限制是比较多的,如果突然移开这些限制去引入外国的市场模式,可能会引起一些社会问题。虽然目前比特币还没有引起政府的注意,但是估计也快了。

我想先把目标放在国际市场,并且坚持一个货币的制度(目前比特币兑美元和美元兑欧元之间的汇率浮动不是同一个数量级的,转换货币纯属浪费手续费)。一个月内,Bitcoinica 将会有重大改进,到时候对于国际用户来说会更加友好。

当然,如果你想跟 Bitcoinica 合作,在淘宝上做代充之类的业务,我会支持的。

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
Ayo_4_Yayo
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September 14, 2011, 04:48:57 PM
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I can't read Mandarin or Cantonese!
zhoutong
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September 14, 2011, 04:49:53 PM
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Bitcoinica will be a short time phenomena. It will last till people realize leverage makes absolutely no sense for trading bitcoins.
It only makes sense in the fiat forex market because is influences inflation. Big players use it there to benefit from micro-trading tactics.

Huh

The ability to short-sell and buy on margin is not a short-term phenomena. Any person who desires leverage will find this service useful. If you KNOW bitcoin will rise or fall, then this offers you a chance to make much more money. Bitcoinica's effect is good both for traders/speculators/investors and also for Bitcoin as it permits a greater variety of pricing means.
My point is unless you have significant funds you will get a margin call way too often and if you do you probably have better uses for your money.

Actually Bitcoinica has its use for miners, too.

For new miners, they probably don't have Bitcoin, but they want to secure the higher price.

We can help them secure the high price of BTC to protect their investment. If if BTC continues to rise until they receive margin call, they can sell their mining profits at higher prices and recover this loss.

Anyway Bitcoinica should create stability for some people, not remove stability.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
dancupid
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September 14, 2011, 05:36:08 PM
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Quote

是的,我现在在新加坡学习。可惜目前我还没有打算把 Bitcoinica 做到国内市场去。中国的银行业和证券业对于投资者的限制是比较多的,如果突然移开这些限制去引入外国的市场模式,可能会引起一些社会问题。虽然目前比特币还没有引起政府的注意,但是估计也快了。

我想先把目标放在国际市场,并且坚持一个货币的制度(目前比特币兑美元和美元兑欧元之间的汇率浮动不是同一个数量级的,转换货币纯属浪费手续费)。一个月内,Bitcoinica 将会有重大改进,到时候对于国际用户来说会更加友好。

当然,如果你想跟 Bitcoinica 合作,在淘宝上做代充之类的业务,我会支持的。

I'll write English - I'm a British person in Shanghai and my 写汉字水平比较差。  I think if you create a Mandarin version of your website, Chinese people will still find it and find a way to use it. RMB is already being traded on mt.gox, and I've bought some. They have a Hong Kong bank and moving RMB to China from there carries no fees (I think).
An agent in China could easily accept guowai buyers using mtgox codes to buy on taobao - it's something I've thought about before - though TaoBao is in Mandarin and it would be hard for a laowai to use it.
EuSouBitcoin
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September 14, 2011, 05:48:44 PM
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I have not traded on Bitcoinica. If any information I post below is wrong, please correct me.

Another exchange is always good for competition. However, Bitcoinica seems to be set up more like a Forex trading operation whereas most other BTC are setup more as stock exchanges. What are the differences?

Most BTC Exchanges vs Bitcoinica

1) agency trading (majority of BTC trading) vs principal trading
2) commission charged vs no commission
3) no leverage allowed (majority of BTC trading) vs leverage allowed
4) client orders can change the inside market vs client orders can not change the inside market
5) your order can't be traded through vs your order can be traded through without a fill

I think the differences in 1, 2 and 3 are apparent to most traders but 4 and 5 may not be. For example of #4, suppose both Bitcoinica and Mt Gox have a current inside market is 5.40 to 5.50 and you put in an order to buy 10 BTC at $5.41 on Mt Gox, the inside market at Mt Gox will change to 5.41 to 5.50. If you place the same order to buy 10 BTC at $5.41 on Bitcoinica, the inside market would remain 5.40 to 5.50.

For an example of #5 differences, if you place an order to Buy 10 BTC at $5.41 on Mt Gox, BTC can not trade below $5.41 unless your order is completely filled. On Bitcoinica, your order could remain unfilled even as BTC trades at $5.40, $5.39, $5.38 and perhaps lower on Bitcoinica. You will only be due a fill on Bitcoinica when the ask price reaches your buy limit.

Just some differences to keep in mind when you choose where to trade.
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September 15, 2011, 12:43:01 AM
 #16

Why would you trade on a platform where you bet against the platform owner?

We're market maker, yes.

But we don't bet against our customers.

Why should we take the risk when we can comfortably earn the spreads and hedge the customers' orders elsewhere?

You can sign up for an account and see our historical prices. We are completely open about this data. If you want all our 120,000 ticks so far, I can export for you. Then you can compare with Mt. Gox prices.

Bitcoinica's price is extremely accurate - our highest on 9/11 is 7, not the ridiculous and non-tradable 15. If you short on Bitcoinica you won't be liquidated because of that. We use an algorithm to manage the prices with absolutely no human intervention.

A bit off topic - but have you any plans to create a Mandarin version of your website (and other languages)?  I think you are in a strong position to impact on the Chinese uptake of bitcoin (您是中国人吗?)

Excuse me English users, I will reply this post in Chinese.

是的,我现在在新加坡学习。可惜目前我还没有打算把 Bitcoinica 做到国内市场去。中国的银行业和证券业对于投资者的限制是比较多的,如果突然移开这些限制去引入外国的市场模式,可能会引起一些社会问题。虽然目前比特币还没有引起政府的注意,但是估计也快了。

我想先把目标放在国际市场,并且坚持一个货币的制度(目前比特币兑美元和美元兑欧元之间的汇率浮动不是同一个数量级的,转换货币纯属浪费手续费)。一个月内,Bitcoinica 将会有重大改进,到时候对于国际用户来说会更加友好。

当然,如果你想跟 Bitcoinica 合作,在淘宝上做代充之类的业务,我会支持的。

老大,提个现怎么这么难呢?什么时候能搞定限额的问题?

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September 15, 2011, 09:54:09 PM
 #17

I want to make a withdrawal of 1000 dollars with Mt.gox-code, but it is not working. Have a look at it, I have also sent you an email.
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September 15, 2011, 10:34:21 PM
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I want to make a withdrawal of 1000 dollars with Mt.gox-code, but it is not working. Have a look at it, I have also sent you an email.

The withdrawal limit of our whole account is still at $1,000. Mt. Gox refused to respond our emails ever since we contacted them regarding the withdrawal limit.

You should be able to withdraw in small amounts.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
fastandfurious
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September 15, 2011, 10:36:46 PM
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I want to make a withdrawal of 1000 dollars with Mt.gox-code, but it is not working. Have a look at it, I have also sent you an email.

The withdrawal limit of our whole account is still at $1,000. Mt. Gox refused to respond our emails ever since we contacted them regarding the withdrawal limit.

You should be able to withdraw in small amounts.

How small? Do you have any idea? Not even 100 dollars is working. Also tested 50 dollars.
fastandfurious
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September 15, 2011, 11:03:38 PM
 #20

Can I get the money in bitcoins instead as others have?
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