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Author Topic: This Bitfinex Credit Bubble cannot end well  (Read 61727 times)
Yololintian
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August 01, 2014, 07:07:28 AM
 #361

When the price hits your liquidation price, does Bitfinex liquidate your entire position or only a part to keep you above the margin requirement?

If you are a whale, your liquidation will move the market and creating more margin call for the rest of your position. It will be a cascading event.

That happened around Christmas last year when one of the trader lose over 900k USD on cascading margin call on litecoin (and hence bitcoin).




But if you are not a whale?
I believe it liquidates the entire position because the high margin requirement of 13% is there to protect against the lack of liquidity of the market.
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August 01, 2014, 08:28:06 PM
 #362


Leverage ratio reduced. Can't take out as much. However, as of this week, Power500 (BTC-e) was offering 16:1 so lord only knows what the gamblers are doing or how high up to their eyeballs in leverage they really are. That said, I think the main game is Bitfinex and those guys have to be sweating bullets right now.

Do you have a link to Power500 (BTC-e)?

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August 01, 2014, 08:33:01 PM
 #363

It´s Plus500 (not available for US citizens as far as i know). They are using the BTC-e price, but they don´t open real postions on BTC-E which means that they have no influence @ all on the BTC-e market unlike Bitfinex.

http://www.plus500.com/


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August 01, 2014, 08:33:55 PM
 #364


Leverage ratio reduced. Can't take out as much. However, as of this week, Power500 (BTC-e) was offering 16:1 so lord only knows what the gamblers are doing or how high up to their eyeballs in leverage they really are. That said, I think the main game is Bitfinex and those guys have to be sweating bullets right now.

Do you have a link to Power500 (BTC-e)?

You mean Plus500 the London Stock Exchange listed platform

http://www.plus500.co.uk/Instruments/BTCUSD
http://www.plus500.co.uk/Instruments/LTCUSD

Edit: fonzie beat me to it
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August 01, 2014, 08:38:51 PM
 #365

Thanks, fonzie and manfred - no wonder I couldn't find it.

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August 01, 2014, 08:47:08 PM
 #366

It´s Plus500 (not available for US citizens as far as i know). They are using the BTC-e price, but they don´t open real postions on BTC-E which means that they have no influence @ all on the BTC-e market unlike Bitfinex.

http://www.plus500.com/



First of all, oops (on the name). Second, thanks for the info. I just learned something. Word.
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August 01, 2014, 09:21:59 PM
 #367

So, the bubble is growing again. Ha, I'm really wondering how this is going to play out... Some people say a credit bubble won't be a problem at all, others say it's going to crash... Phew... Well, maybe one bubble will lead to another one... You know which one I'm talking about Wink Wink

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August 01, 2014, 11:11:56 PM
 #368

So, the bubble is growing again. Ha, I'm really wondering how this is going to play out... Some people say a credit bubble won't be a problem at all, others say it's going to crash... Phew... Well, maybe one bubble will lead to another one... You know which one I'm talking about Wink Wink

Wouldn't it just increase volatility. If we go up, we'll go up more because they'll win their bets and be able to put in more. If we start going down they'll get wiped out and it will make the down draft hurt more. I think it is just the normal situation with a multiplier.
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August 02, 2014, 06:45:34 AM
 #369

... and people slowly catching on that the credit ... was the reason we went from 450 to 680...
This is actually a quite scary thought.

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August 02, 2014, 08:29:03 PM
 #370

It´s Plus500 (not available for US citizens as far as i know). They are using the BTC-e price, but they don´t open real postions on BTC-E which means that they have no influence @ all on the BTC-e market unlike Bitfinex.

http://www.plus500.com/



first they dont offer that for US and other country because CFD are illegal in US, imo bitcoin CFD should be allowed but US is US

second they do trade on btc-e because they need to hedge themselves like any CFD broker   

Los desesperados publican que lo inventó el rey que rabió, porque todo son en el rabias y mas rabias, disgustos y mas disgustos, pezares y mas pezares; si el que compra algunas partidas vé que baxan, rabia de haver comprado; si suben, rabia de que no compró mas; si compra, suben, vende, gana y buelan aun á mas alto precio del que ha vendido; rabia de que vendió por menor precio: si no compra ni vende y ván subiendo, rabia de que haviendo tenido impulsos de comprar, no llegó á lograr los impulsos; si van baxando, rabia de que, haviendo tenido amagos de vender, no se resolvió á gozar los amagos; si le dan algun consejo y acierta, rabia de que no se lo dieron antes; si yerra, rabia de que se lo dieron; con que todo son inquietudes, todo arrepentimientos, tododelirios, luchando siempre lo insufrible con lo feliz, lo indomito con lo tranquilo y lo rabioso con lo deleytable.
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August 02, 2014, 08:46:56 PM
 #371

It´s Plus500 (not available for US citizens as far as i know). They are using the BTC-e price, but they don´t open real postions on BTC-E which means that they have no influence @ all on the BTC-e market unlike Bitfinex.

http://www.plus500.com/



first they dont offer that for US and other country because CFD are illegal in US, imo bitcoin CFD should be allowed but US is US

second they do trade on btc-e because they need to hedge themselves like any CFD broker   

Do you have any proof for that? I have opened positions for about 100-200 BTC on plus500 and quite often there has only been a overall volume for about 10-40 BTC for the next hour after i opened my trade.

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August 02, 2014, 09:00:36 PM
 #372

100-200 BTC on p500? I think I earned too much, because they limited my maximum positions to about 1000 USD (actually 25 BTC) a few monts ago Cry

BTW, in my country, taxes on derivatives (CFDs on bitcoin market) are lower than taxes on gains from bitcoins.
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August 02, 2014, 09:07:40 PM
 #373

Is this the massacre of the leveraged longs?

We aren't low enough for margin calls yet. They will start around 510 ish. The trend is just forced selling and people slowly catching on that the credit bubble was the reason we went from 450 to 680. The Massacre starts when we hit those margin calls.

We've had plenty of margin calls. That spike down to $520ish was margin calls (also why no one followed). At that time $660 longs had a $510 call. There was talk recently of someone being called on TV chat when we dropped below $590 on the way to $561. The truth is, we don't know how long they have been bleeding swap -- a lot will have been called sooner than you think.

There are new swaps being taken out and we don't know much about them, including whether they are being used to open positions or whether they are being used for full leverage. Gleaning much from these stats -- especially when China decides the market, not Bitfinex -- is a hazard to your trading portfolio. Case in point -- that 1k ask the other night? Check the stats. That was a bleeding long. Market didn't give a shit. My two cents.

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August 02, 2014, 09:32:15 PM
 #374

100-200 BTC on p500? I think I earned too much, because they limited my maximum positions to about 1000 USD (actually 25 BTC) a few monts ago Cry

BTW, in my country, taxes on derivatives (CFDs on bitcoin market) are lower than taxes on gains from bitcoins.

During the last bubble they lowered the available leverage(when they were using Gox) gradually from 1:17 to 1:10 to 1:5 and finally 1:2 . But after i haven´t traded there for a while (last time i used in early februar) it got reset. I just checked it again and it´s now possible for me to open up to 185BTC with a 17:1 leverage

"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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August 02, 2014, 09:41:19 PM
 #375

Oh, I didn't explain exactly. In theory, I can open 185 BTC position with 1:17 leverage. In practice max 25-50 BTC(actually 25), though I have money for a larger position. Depending on the BTC price, the value of position cannot be greater than 1000 USD.
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August 02, 2014, 10:40:23 PM
 #376

100-200 BTC on p500? I think I earned too much, because they limited my maximum positions to about 1000 USD (actually 25 BTC) a few monts ago Cry

BTW, in my country, taxes on derivatives (CFDs on bitcoin market) are lower than taxes on gains from bitcoins.

During the last bubble they lowered the available leverage(when they were using Gox) gradually from 1:17 to 1:10 to 1:5 and finally 1:2 . But after i haven´t traded there for a while (last time i used in early februar) it got reset. I just checked it again and it´s now possible for me to open up to 185BTC with a 17:1 leverage
Do you have a link to support this? I cannot speak about the leverage that they offered during the last bubble, but AFAIK they only offer 2.5:1 leverage as of now.
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August 02, 2014, 10:54:20 PM
 #377

100-200 BTC on p500? I think I earned too much, because they limited my maximum positions to about 1000 USD (actually 25 BTC) a few monts ago Cry

BTW, in my country, taxes on derivatives (CFDs on bitcoin market) are lower than taxes on gains from bitcoins.

During the last bubble they lowered the available leverage(when they were using Gox) gradually from 1:17 to 1:10 to 1:5 and finally 1:2 . But after i haven´t traded there for a while (last time i used in early februar) it got reset. I just checked it again and it´s now possible for me to open up to 185BTC with a 17:1 leverage
Do you have a link to support this? I cannot speak about the leverage that they offered during the last bubble, but AFAIK they only offer 2.5:1 leverage as of now.

We were talking about Plus500 not Bitfinex, maybe you got that mixed up.

http://www.plus500.com/Instruments/btcusd

"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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August 02, 2014, 11:21:51 PM
 #378

i am interested. who tried margin trading out? whats your gain in %?

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August 02, 2014, 11:33:07 PM
 #379

100-200 BTC on p500? I think I earned too much, because they limited my maximum positions to about 1000 USD (actually 25 BTC) a few monts ago Cry

BTW, in my country, taxes on derivatives (CFDs on bitcoin market) are lower than taxes on gains from bitcoins.

During the last bubble they lowered the available leverage(when they were using Gox) gradually from 1:17 to 1:10 to 1:5 and finally 1:2 . But after i haven´t traded there for a while (last time i used in early februar) it got reset. I just checked it again and it´s now possible for me to open up to 185BTC with a 17:1 leverage
Do you have a link to support this? I cannot speak about the leverage that they offered during the last bubble, but AFAIK they only offer 2.5:1 leverage as of now.

We were talking about Plus500 not Bitfinex, maybe you got that mixed up.

http://www.plus500.com/Instruments/btcusd

Unfortunately, some of us in the US are not able to open accounts at plus500.

Yololintian
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August 03, 2014, 03:45:46 AM
 #380

Is this the massacre of the leveraged longs?

We aren't low enough for margin calls yet. They will start around 510 ish. The trend is just forced selling and people slowly catching on that the credit bubble was the reason we went from 450 to 680. The Massacre starts when we hit those margin calls.

We've had plenty of margin calls. That spike down to $520ish was margin calls (also why no one followed). At that time $660 longs had a $510 call. There was talk recently of someone being called on TV chat when we dropped below $590 on the way to $561. The truth is, we don't know how long they have been bleeding swap -- a lot will have been called sooner than you think.

There are new swaps being taken out and we don't know much about them, including whether they are being used to open positions or whether they are being used for full leverage. Gleaning much from these stats -- especially when China decides the market, not Bitfinex -- is a hazard to your trading portfolio. Case in point -- that 1k ask the other night? Check the stats. That was a bleeding long. Market didn't give a shit. My two cents.
That 1k was in the middle of a bulltrap, though. China may decide the market mostly, but Bitfinex will have a large effect once we get lower. As for bleeding longs, I'm pretty sure lots of them are taking the position to the end; they wouldn't have been squeezed yet, but are down significantly due to interest. I feel this way because there are an awful lot of bulltards in bitcoin and many many of them have been screaming bubble! bubble! bubble! for the past month. Well, I think they are right - we are in the credit bubble which will at some point collapse.
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