Bitcoinica "No Reserve" - Zhou what's up?

[BitPay Business Solutions]

I've been trying to place orders on your site for several days now.

Without disclosing my position (I assure everyone, it is a very small position) I cannot buy bitcoins.  I want to buy bitcoins and I want to give Zhou my money, but he cannot take it!



Your service is badly broken if orders can only be placed in one direction.  And since you allow leverage, this is very bad for the overall bitcoin market.

Any ETA when this will be fixed?

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[BitPay Business Solutions]

ok it's been about 40 minutes and my BUY orders are still sitting there open.  I will cancel the market one because the price is now 20 cents higher than what I wanted to pay when I entered the market order.

I hope someone got filled on this dip!  because i did not.

[bittenbob]

It never went away during the whole dip. It means that we are still probably going down further due to Bitcoinica reserve issues so I would have to agree with you about it being bad for the Bitcoin market as a whole at this point.

[deepceleron]

I would guess that the problem is similar to what exchanges were having with bank transfers. People send money, it takes time in transit for it to get there, but the withdraw comes out instantly. There is always some money unavailable while in transit. Same thing might be going on, without zhoutong being a rich man with deep pockets to loan everybody 900%, there is always some BTC of bitcoinica's being sent or received from mtgox that is still maturing but is unavailable, and perhaps a similar situation with users simultaneously depositing and withdrawing volumes of dollars that might be unavailable for use until it clears. Then there is risk mitigation that the 90% of leverage can't be margin called fast enough if the user's money is not actually in the exchange while the user is trading.

[BitPay Business Solutions]

It never went away during the whole dip. It means that we are still probably going down further due to Bitcoinica reserve issues so I would have to agree with you about it being bad for the Bitcoin market as a whole at this point.

I don't want to sell what little I have, because its too valuable to give up.  I can't buy it back.

So I will have to create a separate account and establish a short position there.  That's a stupid way to trade, but its the only way to buy/sell when I want to.

[bittenbob]

It never went away during the whole dip. It means that we are still probably going down further due to Bitcoinica reserve issues so I would have to agree with you about it being bad for the Bitcoin market as a whole at this point.

I don't want to sell what little I have, because its too valuable to give up.  I can't buy it back.

So I will have to create a separate account and establish a short position there.  That's a stupid way to trade, but its the only way to buy/sell when I want to.

It is kind of a sad state affairs when the only way to make money on Bitcoinica for the last week or so is to bet against Bitcoin prices and at leverage.

[BitPay Business Solutions]

It is kind of a sad state affairs when the only way to make money on Bitcoinica for the last week or so is to bet against Bitcoin prices and at leverage.

I agree its sad.  but its the only possible way to enter an order and get filled!

[bittenbob]

I might actually have a solution to this mess. I cannot go long even at 2.5:1 leverage and I am assuming the other players at 10:1 can't go long at the same time as me. Instead of completely starfishing everyone out why doesn't Bitcoinica allow for extra margins at lower leverage (2.5:1 or 5:1). This way the higher margin traders don't use up all the margin for the small fish like me.

[BitPay Business Solutions]

I have suggested that they impose position limits, perhaps you should as well.

Even 5:1 leverage would require a 20% move to force liquidate people, and that is possible but not very likely as more participants enter the market.

If you keep leverage at 2.5:1, the price would need to be down around $3.50 to liquidate it, and I'm sure most holders would bail long before that happens.  Well, unless zhou found some way to have his algorithm spit out 3.5 for a second or 2, then he would just take everyones money.