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Author Topic: This Bitfinex Credit Bubble cannot end well  (Read 61708 times)
fonzie
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August 13, 2014, 06:22:54 PM
 #441

According to Bitfinex, almost everyone uses MAX leverage:

"
1.We have decided to eliminate the “Choose your leverage” feature, i.e., 1:1, 2:1 & 2.5:1. Instead of this, we are implementing a “per-pair” leverage allowance. This will allow us to tailor the exposure based on the assets volatility. Virtually all users maximize this value, and since it is self-selected anyway, we have chosen to simplify our product by eliminating it."

couldn't that mean that everyone chooses 2.5:1 -- it was an option in user settings -- but not necessarily takes out a full margin position? i set mine to 2.5:1 but never did more than 1 or 1.5:1.

Possible

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madken7777
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August 14, 2014, 04:40:50 AM
 #442

29.5 million.

Saw it went down to 27M and then back to 28.9M.
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August 14, 2014, 04:44:33 AM
 #443

29.5 million.

Saw it went down to 27M and then back to 28.9M.

Yea, we had a few bleeders on the screen. But people are essentially doubling and tripling down a bet thinking that sooner or later the market has to turn. They might be right, but they are playing with their lives at this point.

Gamblers Anonymous... that's all I can say about that. If you are engaged in such behavior, they can help.
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August 14, 2014, 05:06:30 AM
 #444

29.5 million.

Saw it went down to 27M and then back to 28.9M.

Yeah, I thought for a moment there will be lasting decrease - but as newbie says, it seems that bulls confidence remain unshaken. What bout the cost of holding such positions  - it is still >30% per year, should also start to be painful soon?

I am afraid we have a chicken and egg problem here - potential buyers are waiting for 'Finex longs to substantially decrease while 'Finex longs are waiting for potential buyers  to become actual buyers. Wondering who would win  Huh But looks like such a stalemate can last a long time Sad
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August 14, 2014, 05:08:45 AM
 #445

29.5 million.

Saw it went down to 27M and then back to 28.9M.

Yeah, I thought for a moment there will be lasting decrease - but as newbie says, it seems that bulls confidence remain unshaken. What bout the cost of holding such positions  - it is still >30% per year, should also start to be painful soon?

I am afraid we have a chicken and egg problem here - potential buyers are waiting for 'Finex longs to substantially decrease while 'Finex longs are waiting for potential buyers  to become actual buyers. Wondering who would win  Huh But looks like such a stalemate can last a long time Sad

Yes, it is kind of cool to watch the Martingale strategy in live action and amongst a collective of betters rather than a single one. This is the type of stuff that would make a brilliant Economics journal article... for anybody who might be a student and want a research topic.
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August 14, 2014, 05:10:54 AM
 #446

According to Bitfinex, almost everyone uses MAX leverage:

"
1.We have decided to eliminate the “Choose your leverage” feature, i.e., 1:1, 2:1 & 2.5:1. Instead of this, we are implementing a “per-pair” leverage allowance. This will allow us to tailor the exposure based on the assets volatility. Virtually all users maximize this value, and since it is self-selected anyway, we have chosen to simplify our product by eliminating it."

couldn't that mean that everyone chooses 2.5:1 -- it was an option in user settings -- but not necessarily takes out a full margin position? i set mine to 2.5:1 but never did more than 1 or 1.5:1.
I would personally take this to mean that everyone who uses leverage would have the max leverage that they are allowed. In other words people are going "all in" when they buy bitcoin on margin. I am surprised by this statement as I would think the margin level would be lower on average. Although this measure may be inflated by the recent price declines.
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August 14, 2014, 05:10:57 AM
 #447

Lending whale might start pulling out if the rate is going too low for the risk involved.
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August 14, 2014, 07:59:01 AM
 #448

It is happening.
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August 14, 2014, 08:02:12 AM
 #449

Wow! Good call!

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Bitcoin_is_here_to_stay
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August 14, 2014, 08:03:19 AM
 #450

It is happening.

Yeah, finally. Finex stats still does not show a change, but nothing else could cause such isolated crash on Finex.
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August 14, 2014, 08:05:33 AM
 #451

It was one of the moderate ones that happen more frequently, Bitstamp was about 12% higher. Looking forward to the stats.
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August 14, 2014, 08:08:47 AM
 #452

It was one of the moderate ones that happen more frequently, Bitstamp was about 12% higher. Looking forward to the stats.

Yeah, based on earlier crashes, I think it can take them couple hours to update. So far 10k+ coins sold - about 5-6 M less swaps top?
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August 14, 2014, 08:14:22 AM
 #453

Spot on Blitz, congrats.
I'm wondering if those "protection measures" they took on bitfinex are some kind of forced delay between single margin calls (maybe  frozing for some minutes next one to be margin called), to let arbitrage bots apply buy pressure and level the price
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August 14, 2014, 08:31:23 AM
 #454

Have you guys watched liquidation cascades of similar magnitude in the past? I'm wondering about similarities/differences that could tell us about change in procedure, but not very motivated to wade through half a dozen 1-min charts to find out.

For posterity, 1 min chart: http://i.imgur.com/Wer0T2b.png

Beautiful volume.

Edit:



Both shorts and longs decreased quite a bit. => Shorts made money, longs lost their asses. 20% reduction in longs, putting us a little before when this thread was created. Still a lot, but not that frothy anymore.
Newbie1022
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August 14, 2014, 08:39:03 AM
 #455

I had been calling for this for weeks and somehow I still got caught in the middle of it. I was looking at the floor on Huobi at 3200 that seemed strong enough to hold... so I was like... self, there is a bottom. So I bought in... on Finex of all exchanges. Literally less than a second later... 451... Jesus Christ... I had to backdoor exit my way through LTC/BTC. I am totally rattled. Only lost 2%... still shaking though.

Anyhow, my thought is that we'd have to hit 451 to start cascading again... is this not about right?
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August 14, 2014, 08:41:31 AM
 #456

And I write that as another cascade begins
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August 14, 2014, 08:43:52 AM
 #457

Trading on margin: How to lose your money even faster than before!
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August 14, 2014, 09:00:17 AM
 #458

Its finally happened. Do you guys think this is final capitulation? I feel as though bitcoin is going to find a lower equilibrium price in the 400s for a while. I also think there could be a lot more downside and margin calls on bitfinex if we break lower than 450.
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August 14, 2014, 09:12:59 AM
 #459

My goodness, it actually happened.
Shall we call it the bottom? Feels about right as we really should not be going back to 440s again. It was previous big (from a 1K top) downtrend's bottom and a starting point of the latest uptrend.

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August 14, 2014, 09:45:05 AM
 #460

My goodness, it actually happened.
Shall we call it the bottom? Feels about right as we really should not be going back to 440s again. It was previous big (from a 1K top) downtrend's bottom and a starting point of the latest uptrend.

It was dramatic, but I think it is not over yet. And more than 500,000 new USD swaps on Finex already Sad. Bulls are really stubborn.
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