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Author Topic: This Bitfinex Credit Bubble cannot end well  (Read 61726 times)
nrd525
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July 15, 2014, 01:02:50 AM
 #201

Apparently BitVC has 1 million CNY lent out (around 150k US).

Don't day trade.
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July 15, 2014, 01:41:11 AM
 #202

Bitfinex doesn't have necessarily to stop trading when the crash reaches 10%, they can let the greedy traders burn some more, but they will have to stop trading before 400 or they will be forced to reverse the trades with bitcoin at less than 1 usds.

Anyway, any buyer that get some bitcoins at around 400 will make this profitable trade only because of the swaps bubble. On a normal market, they would never get that price (try that on Bitstamp). Therefore, Bitfinex may decide that this abnormal circumstances most be taken in account on the decision to stop trade.

But I agree that, if they don't stop trade, they shouldn't reverse any trades unless that is necessary to pay back lenders. Therefore, if they don't stop trade at 10 or 20%, but only at 35%, they shouldn't reverse the trades. I already wrote that reversing trades undermines their reputation, so it most be a last solution. Stopping trade, no. That is an usual measure in all markets of the world, including the NYSE.

Traders/borrowers are only thinking about the money they will make if bitcoins makes a double top at 700/720 or even goes higher. They should ask themselves if they will find enough people to buy their bitcoins, even if the price reaches that value.

But, right now, this is just conjectural. The risk of a crash won't materialize without a "natural" and strong decline of bitcoin.

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July 15, 2014, 05:44:45 AM
 #203

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

Bitcoin: 1BosF3XmmAtmihnaDJyUHYqEXZGsBmYj53
CEG5952
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July 15, 2014, 05:59:11 AM
 #204

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

As someone who has lost significant gains as a result of Bitfinex's rollback a few months back, I tend to agree. However, it is what it is. This is their policy, they've done it, and they'll do it again. What I've learned is: bid accordingly. Don't aim too low on Bitfinex, or they'll take your BTC.

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July 15, 2014, 06:06:22 AM
 #205

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

As someone who has lost significant gains as a result of Bitfinex's rollback a few months back, I tend to agree. However, it is what it is. This is their policy, they've done it, and they'll do it again. What I've learned is: bid accordingly. Don't aim too low on Bitfinex, or they'll take your BTC.
THen I guess I should move away from them.. I didn't know they have this unfair policy

What about btce? Do they rollback trades too?

Bitcoin: 1BosF3XmmAtmihnaDJyUHYqEXZGsBmYj53
ask
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July 15, 2014, 06:10:08 AM
 #206

Last two days I spent closing my open positions. Time will show if I was right or wrong.

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FattyMcButterpants
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July 15, 2014, 06:21:07 AM
 #207

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

As someone who has lost significant gains as a result of Bitfinex's rollback a few months back, I tend to agree. However, it is what it is. This is their policy, they've done it, and they'll do it again. What I've learned is: bid accordingly. Don't aim too low on Bitfinex, or they'll take your BTC.
THen I guess I should move away from them.. I didn't know they have this unfair policy

What about btce? Do they rollback trades too?

no. btce experienced a flash crash to $100~ at the very same time. they did not roll back trades, and many traders reported having their bids filled in the $100s.
CEG5952
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July 15, 2014, 07:42:23 AM
 #208

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

As someone who has lost significant gains as a result of Bitfinex's rollback a few months back, I tend to agree. However, it is what it is. This is their policy, they've done it, and they'll do it again. What I've learned is: bid accordingly. Don't aim too low on Bitfinex, or they'll take your BTC.
THen I guess I should move away from them.. I didn't know they have this unfair policy

What about btce? Do they rollback trades too?

no. btce experienced a flash crash to $100~ at the very same time. they did not roll back trades, and many traders reported having their bids filled in the $100s.

Yep, I remember that. Unfortunately didn't have my fiat on BTCE at the time -- stupid me, taking like a $15-20 arb profit instead of keeping money there. Now, I always keep lowball bids on BTCE when I am in fiat.

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July 15, 2014, 09:11:03 AM
 #209

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team


"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""



I knew i heard that phrase somewhere else before...  Cheesy

"To know death, Otto, you have to fuck life in the gallbladder"
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"These FUDsters are insane egomaniacs that just want cheap BTC" - oblivi
Teppino
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July 15, 2014, 12:45:45 PM
 #210

On a normal market, when position gets liquidated, stocks gets sold. End of story.
If bitfinex would rollback/freeze trades, isn't that market manipulation? They're interfering with "the free and fair operation of the market"
Since bitfinex promised to compensate lenders in case of losses because of a crash, they should pay them out of their own pocket. Otherwise, they should let the lenders take the risk.
Those waiting at the buy side never did anything wrong, they placed their buy orders, btc get sold, buyers get their btc.
You shouldn't undo what has been sold. Once it's sold, it's sold! If it has to crash to $1, then let it crash.

As someone who has lost significant gains as a result of Bitfinex's rollback a few months back, I tend to agree. However, it is what it is. This is their policy, they've done it, and they'll do it again. What I've learned is: bid accordingly. Don't aim too low on Bitfinex, or they'll take your BTC.
THen I guess I should move away from them.. I didn't know they have this unfair policy

What about btce? Do they rollback trades too?

no. btce experienced a flash crash to $100~ at the very same time. they did not roll back trades, and many traders reported having their bids filled in the $100s.

Yep, I remember that. Unfortunately didn't have my fiat on BTCE at the time -- stupid me, taking like a $15-20 arb profit instead of keeping money there. Now, I always keep lowball bids on BTCE when I am in fiat.

i was watching as well when the flash crash happened, but the first thought i had was "they found a bug in bitcoin protocol" and was simply too scared to do anything. Price then climbed back halfway, did a little fight there and went back to normal in a matter of minutes..
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July 15, 2014, 05:06:29 PM
 #211

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

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July 15, 2014, 05:29:04 PM
 #212

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

"cool down" is a very common phrase... bitfinex is guaranteeing the lender's principal, AND it schedules the margin calls.  In other words, bitfinex can choose to not execute a forced sale if it wants.  So clearly they aren't going to do margin calls so fast that they flash crash to the point where principal is lost because that will be suicide.  Its therefore unlikely we'll get a deep flash crash on bitfinex alone... but a flash crash (or even something smaller than a crash) on other exchanges could trigger a big flash crash on bitfinex.


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July 15, 2014, 05:32:05 PM
 #213

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

Well, 2 weeks ago they(Bitfinex) called the assumption of the OP "FUD".  How fast things can change....

Guys

Since when so called "moderators" are starting FUD threads?

Cui prodest?

Ask yourself this simple question and if your IQ is not lower than your shoe size you'll come up with the right conclusion.

Have a good day and a great weekend

Giancarlo
Bitfinex Team


"To know death, Otto, you have to fuck life in the gallbladder"
www.hsbc.com  - The world´s local bank
"These FUDsters are insane egomaniacs that just want cheap BTC" - oblivi
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July 15, 2014, 05:53:17 PM
 #214

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

Well, 2 weeks ago they(Bitfinex) called the assumption of the OP "FUD".  How fast things can change....

Guys

Since when so called "moderators" are starting FUD threads?

Cui prodest?

Ask yourself this simple question and if your IQ is not lower than your shoe size you'll come up with the right conclusion.

Have a good day and a great weekend

Giancarlo
Bitfinex Team


Wow. They really don't know what they are doing, do they? That messages is eerie to me... has scam written all over it. Anyhow, maybe I am wrong. They should really figure out what the hell they are doing, give everybody a heads up, and honor their commitments.
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July 15, 2014, 06:22:12 PM
 #215

Apparently BitVC has 1 million CNY lent out (around 150k US).

What is the current rate on lending? And what is the main reason people trust the exchange?
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July 15, 2014, 06:51:30 PM
 #216

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

Well, 2 weeks ago they(Bitfinex) called the assumption of the OP "FUD".  How fast things can change....

Guys

Since when so called "moderators" are starting FUD threads?

Cui prodest?

Ask yourself this simple question and if your IQ is not lower than your shoe size you'll come up with the right conclusion.

Have a good day and a great weekend

Giancarlo
Bitfinex Team


Yep.

Bitfinex will be central to next Bitcoin disaster.

Won't try to claim any soothsaying rights on this one as loads of people have been saying the same thing all over the internet.

Bitfinex = Hookey as fuck and probably out of their depth..........sounds all to similar to another well known French run Bitcoin exchange based in the Far East that is sadly no longer with us.

Kraken Account, Robbed/Emptied. Kraken say "Fuck you, its your loss": https://bitcointalk.org/index.php?topic=1559553.msg15656643#msg15656643

Bitfinex victims. DO NOT TOUCH THE BFX TOKEN! Start moving it around, or trading it, and you will be construed as having accepted it as an alternative means of payment to your USD, BTC, etc.
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July 15, 2014, 07:02:16 PM
 #217

LOL, Giancarlo. What a master of public relations that guy is. Anyway, I think you're right MatTheCat. Next exchange fiasco has got BFX written all over it....
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July 15, 2014, 11:13:25 PM
 #218

LOL, Giancarlo. What a master of public relations that guy is. Anyway, I think you're right MatTheCat. Next exchange fiasco has got BFX written all over it....
+1
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July 15, 2014, 11:56:31 PM
 #219

The system of liquidation is automatic, not manual.

And they can't risk to convert it to manual, because in a crash they might have dozens of liquidations almost imminent and making each one depending on a human decision means that they will be done at a bigger loss.
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July 16, 2014, 12:40:16 AM
 #220

We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.

I hope this helps.

Have a good day

Giancarlo
Bitfinex Team

"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""

I knew i heard that phrase somewhere else before...  Cheesy

Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.

"cool down" is a very common phrase... bitfinex is guaranteeing the lender's principal, AND it schedules the margin calls.  In other words, bitfinex can choose to not execute a forced sale if it wants.  So clearly they aren't going to do margin calls so fast that they flash crash to the point where principal is lost because that will be suicide.  Its therefore unlikely we'll get a deep flash crash on bitfinex alone... but a flash crash (or even something smaller than a crash) on other exchanges could trigger a big flash crash on bitfinex.
I don't think they guarantee the lenders' principle. Do you have a link/quote to back this up? AFAIK lenders are putting their money at risk, although they do have ways that should protect your money.
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