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Author Topic: This Bitfinex Credit Bubble cannot end well  (Read 61726 times)
SunBin
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July 04, 2014, 06:39:01 AM
 #81

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

This is only true when bitcoin is still growing and market is expanding.
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July 04, 2014, 06:47:29 AM
 #82

They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

Mmm... When have I heard this before? Was it MtGox..? Or Bitcoinica? Or SCexchange? Or..?
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July 04, 2014, 10:11:18 AM
 #83

Nah, it was GLBSE, BTCS&T or inputs.io! Tongue

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July 05, 2014, 03:12:31 AM
 #84

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

This is only true when bitcoin is still growing and market is expanding.
I would say it is true whenever trading volumes are high. There is no need for the market to expand or the price to increase.

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July 05, 2014, 03:35:03 AM
 #85

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

You don't have to worry if they run off with your money.   You should worry about how to get your money out in case of insolvency


     
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July 05, 2014, 03:51:23 AM
 #86

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

This is only true when bitcoin is still growing and market is expanding.
I would say it is true whenever trading volumes are high. There is no need for the market to expand or the price to increase.

Volume is a function of growth and expansion. High fluctuation in price attracts gambler and speculator, which also mean increase volume.
InwardContour
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July 05, 2014, 08:19:30 PM
 #87

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

This is only true when bitcoin is still growing and market is expanding.
I would say it is true whenever trading volumes are high. There is no need for the market to expand or the price to increase.

Volume is a function of growth and expansion. High fluctuation in price attracts gambler and speculator, which also mean increase volume.

They would make more money when volume is growing but they will make money off of the current volumes as well as most of their costs are a factor of their volume.

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July 05, 2014, 10:42:13 PM
 #88

There's almost 29M usd swaps now on bitfinex, and to me it looks like the upward momentum has stopped. If the price ranges from 640-660 for a while with no upward movement the probability of a long squeeze is going to increase dangerously.

Quite a lot of money they are holding.

What stop them from running away or claimed hack like tradefotress did?
They make money off of trading fees and earn a portion of the interest on Swaps. Over the long term they stand to make more money off of these fees would outweigh the amount they could get away with if they were to steal the coins from their customers.

You don't have to worry if they run off with your money.   You should worry about how to get your money out in case of insolvency
The only way to get your money back in the event of either would be to withdraw your funds prior to the theft/insolvency happening.

This spot for rent.
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July 06, 2014, 03:10:15 AM
 #89

Nah, it was GLBSE, BTCS&T or inputs.io! Tongue

MF Global

Give a man a fish and he eats for a day.  Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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July 06, 2014, 04:43:16 AM
 #90

Nah, it was GLBSE, BTCS&T or inputs.io! Tongue

MF Global

The case with Mtgox is most likely same with MG Global. Betting with customer money and went bust.
DannyElfman
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July 06, 2014, 05:15:23 PM
 #91

Nah, it was GLBSE, BTCS&T or inputs.io! Tongue

MF Global

The case with Mtgox is most likely same with MG Global. Betting with customer money and went bust.
MF global was a ponzi. I would say that gox was more incompetence then betting customer money and was likely not a ponzi

This spot for rent.
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July 06, 2014, 05:41:58 PM
 #92

Can someone please tell me what kind of returns you can make if you deposit to Bitfinex and lend out for margin traders?
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July 06, 2014, 06:33:12 PM
 #93

Depends on what you lend out (BTC, USD, LTC), also it depends on the market - so far I've earned from several % per day down to 0.00XX%.

Check out bfxdata.com for example to get an overview over current rates.

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Justine
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July 06, 2014, 06:37:12 PM
 #94

Can someone please tell me what kind of returns you can make if you deposit to Bitfinex and lend out for margin traders?

Don't forget letting someone hold your money is risky also.
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July 06, 2014, 06:40:48 PM
 #95

Can someone please tell me what kind of returns you can make if you deposit to Bitfinex and lend out for margin traders?

As I heard you dictate the amount of profit yourself and traders can then choose to use your funds to leverage or not. The system automatically makes that decision for them if they take a position.
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July 06, 2014, 07:21:37 PM
 #96

The total $ swaps stay around 29M$, while the bid sum is just below 4M$. Looks so healthy ... not.
But as long as the BTC swaps don't jump, this can continue for a while.

Sometimes, if it looks too bullish, it's actually bearish
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July 06, 2014, 07:36:32 PM
 #97

The total $ swaps stay around 29M$, while the bid sum is just below 4M$. Looks so healthy ... not.
But as long as the BTC swaps don't jump, this can continue for a while.

For a while. But how long? Personally, I see a bullish move to the $700s brewing, and I am praying that some of these swaps come down during that time (rather than the opposite, which has been happening --> price goes up OR down, swaps go up). Unfortunately, I think many will see a move like that as confirming the coming of the next bubble, when in fact, we might retest the lows... Smiley

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July 06, 2014, 08:20:45 PM
 #98

The total $ swaps stay around 29M$, while the bid sum is just below 4M$. Looks so healthy ... not.
But as long as the BTC swaps don't jump, this can continue for a while.

like i was saying the other day -- just looking at those numbers is scary. and it only continues to diverge even more. i know bids would fill in during a serious decline.... but just how many?
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July 07, 2014, 12:44:49 AM
 #99

The total $ swaps stay around 29M$, while the bid sum is just below 4M$. Looks so healthy ... not.
But as long as the BTC swaps don't jump, this can continue for a while.
As the swaps mature the other party to the swaps will likely want to enter into new swap agreements.

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July 07, 2014, 03:19:10 AM
 #100

The total $ swaps stay around 29M$, while the bid sum is just below 4M$. Looks so healthy ... not.
But as long as the BTC swaps don't jump, this can continue for a while.
In order for this data to have any meaning, you would need to know just how leveraged traders that take out these swaps are, if they are only leveraged 1.001 to 1 then they could simply close a small portion of their holdings with little impact on the market if they cannot borrow at reasonable terms. 

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