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Author Topic: This Bitfinex Credit Bubble cannot end well  (Read 61706 times)
FattyMcButterpants
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July 08, 2014, 09:15:32 PM
 #121

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.

would it be wise, considering weeks and months of sideways price action? that's a lot of interest to pay for sideways, and through times of down trending. it's one thing to hold, it's another to baghold margin.
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theonewhowaskazu
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July 08, 2014, 09:32:23 PM
 #122

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.

would it be wise, considering weeks and months of sideways price action? that's a lot of interest to pay for sideways, and through times of down trending. it's one thing to hold, it's another to baghold margin.

Well, its just the buy and hodl strategy except leveraged.

I know quite a few people basically in that exact situation who aren't complaining or sweating it much right now.

Not saying its the best strategy but you can't deny people are doing it, and I don't think its going to end any time soon .

FattyMcButterpants
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July 08, 2014, 09:54:35 PM
 #123

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.

would it be wise, considering weeks and months of sideways price action? that's a lot of interest to pay for sideways, and through times of down trending. it's one thing to hold, it's another to baghold margin.

Well, its just the buy and hodl strategy except leveraged.

I know quite a few people basically in that exact situation who aren't complaining or sweating it much right now.

Not saying its the best strategy but you can't deny people are doing it, and I don't think its going to end any time soon .

i just dont really get it, though. if you are going to baghold for months anyway, then liquidity really is no issue. so why not leverage on MT4 and pay no interest?
Keyara
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July 08, 2014, 09:58:29 PM
 #124

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.

would it be wise, considering weeks and months of sideways price action? that's a lot of interest to pay for sideways, and through times of down trending. it's one thing to hold, it's another to baghold margin.

Well, its just the buy and hodl strategy except leveraged.

I know quite a few people basically in that exact situation who aren't complaining or sweating it much right now.

Not saying its the best strategy but you can't deny people are doing it, and I don't think its going to end any time soon .

i just dont really get it, though. if you are going to baghold for months anyway, then liquidity really is no issue. so why not leverage on MT4 and pay no interest?

What MT4? Which country is the company located?
FattyMcButterpants
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July 08, 2014, 10:01:16 PM
 #125

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.

would it be wise, considering weeks and months of sideways price action? that's a lot of interest to pay for sideways, and through times of down trending. it's one thing to hold, it's another to baghold margin.

Well, its just the buy and hodl strategy except leveraged.

I know quite a few people basically in that exact situation who aren't complaining or sweating it much right now.

Not saying its the best strategy but you can't deny people are doing it, and I don't think its going to end any time soon .

i just dont really get it, though. if you are going to baghold for months anyway, then liquidity really is no issue. so why not leverage on MT4 and pay no interest?

What MT4? Which country is the company located?


MetaTrader 4 is a trading platform. to trade BTC on it (with leverage) you trade through BTCE which is based in Bulgaria. obviously, then you want to look at the reputability of BTCE. Smiley

BTCE --> finance tab > Meta Trader
tinof
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July 08, 2014, 10:01:39 PM
 #126

i just dont really get it, though. if you are going to baghold for months anyway, then liquidity really is no issue. so why not leverage on MT4 and pay no interest?

Can MT4 let user send bitcoin in and out easily?  What about tax filing requirement?
theonewhowaskazu
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July 08, 2014, 10:03:22 PM
 #127

MT4 isn't a person guys...

This thread is getting kinda funny

wachtwoord
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July 08, 2014, 10:04:41 PM
 #128

MT4 isn't a person guys...

This thread is getting kinda funny

Haha, this made me laugh  Cheesy

DannyElfman
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July 08, 2014, 11:45:11 PM
 #129

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

This spot for rent.
AceWallen
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July 08, 2014, 11:56:16 PM
 #130

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.
theonewhowaskazu
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July 09, 2014, 12:56:09 AM
 #131

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.

I know at least 2 people who have open margin positions for about a year each.

AceWallen
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July 09, 2014, 01:04:45 AM
 #132

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.

I know at least 2 people who have open margin positions for about a year each.

on bitfinex? that's insane. they couldn't fine tune their analysis to cut down on 60-250% annual interest? why throw away so much money? that's just foolish.
wachtwoord
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July 09, 2014, 01:08:03 AM
 #133

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.

I know at least 2 people who have open margin positions for about a year each.

Can you ask them their views on that? It sounds insane, but maybe I'm missing something here.

theonewhowaskazu
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July 09, 2014, 01:09:51 AM
 #134

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.

I know at least 2 people who have open margin positions for about a year each.

on bitfinex? that's insane. they couldn't fine tune their analysis to cut down on 60-250% annual interest? why throw away so much money? that's just foolish.

I don't know, they're pretty chill about it honestly. I was kind of surprised myself. I don't know if foolish though, they have made the full 600% profit since a year ago and using leverage to multiply your profit by 2 can't hurt. I wouldn't do it, seems way too scary when you could just buy without leverage and not sweat it nearly as much, but I can't criticize success.

theonewhowaskazu
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July 09, 2014, 01:10:25 AM
 #135

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.

I know at least 2 people who have open margin positions for about a year each.

Can you ask them their views on that? It sounds insane, but maybe I'm missing something here.

Sure, I can ask. I am seeing them either tomorrow or thursday anyway.

AceWallen
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July 09, 2014, 02:22:33 AM
 #136

interesting. i just feel like the exchange risk alone for the length of a year would be unattractive. then add huge interest on top? crazy. to each his own i guess. bulls gonna bull. Cheesy
DannyElfman
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July 09, 2014, 04:23:55 AM
 #137

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.
If prices go up at a gradual, consistent, pace with few to no downtrends then it would make sense, but no asset price acts this way.

This spot for rent.
CEG5952
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July 09, 2014, 05:37:33 AM
 #138

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.
If prices go up at a gradual, consistent, pace with few to no downtrends then it would make sense, but no asset price acts this way.

This, and more importantly I think, as someone mentioned, exchange risk. Just look at Gox and some of the other exchanges/businesses that have gone belly up or run with customer money. It's still the wild west out here.

dadugan
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July 09, 2014, 05:51:44 PM
 #139

Its possible to take swap but never pay for it. That's the pb.

Also, since a year ago, we've increased by about 600%. It would be very possible to leverage long on that with a 200% interest rate.
The increase in price would not be a guarantee while the interest costs would be guaranteed. High interest costs like the cost in your example would force a trader to need a large upswing shortly after opening his position or risk gettting a margin call.

nobody is going to hold swaps at these rates for a year. every day those swaps eat away at your margin position, and every day your margin call gets higher.
If prices go up at a gradual, consistent, pace with few to no downtrends then it would make sense, but no asset price acts this way.

This, and more importantly I think, as someone mentioned, exchange risk. Just look at Gox and some of the other exchanges/businesses that have gone belly up or run with customer money. It's still the wild west out here.

It make more sense for exchange to stay honest. Mtgox blows it big time when Mark can sell the entire business for over 200M but choose to defraud customers.

Bitfinex can probably sell for at least 70M if the volume is true.
CEG5952
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July 09, 2014, 07:12:37 PM
 #140

It make more sense for exchange to stay honest. Mtgox blows it big time when Mark can sell the entire business for over 200M but choose to defraud customers.

Bitfinex can probably sell for at least 70M if the volume is true.


Maybe, maybe not. I'm not really in a position to speculate on that. If you feel comfortable holding all your coins on these exchanges, be my guest. Wink

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