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Newbie1022
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July 20, 2014, 02:06:32 AM |
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We honestly don't know what their incentives are. They could be in the game and look to absorb thousands, maybe tens of thousands, of bitcoins that they could then later unwind on other exchanges. It's an unregulated market. The market is flat due largely to manipulation and the leveraged are losing their shirts. There really is nothing other than good conscience or a true belief in Bitcoins long-term potential that would stop them. Finally, even if they believe in the long-term potential of Bitcoin there are newer and more dazzling exchanges coming out every day. We are thinking on one hand that they don't want to kill the goose that laid the golden eggs, but at the same time what is their exit strategy when their market share gets encroached upon?
So, is that going to happen. Probably not. But do we know a damned thing about what their incentives are? Probably not.
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Leina
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July 20, 2014, 02:32:04 AM |
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To go long you need collateral in USD.
Think the latest news update said you can use bitcoin as collateral to "self fund". Correct me if I am wrong. |
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molecular
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Activity: 2772
Merit: 1019
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July 20, 2014, 05:54:05 AM |
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To go long you need collateral in USD.
Think the latest news update said you can use bitcoin as collateral to "self fund". Correct me if I am wrong. If true, doesn't that seem a tiny bit dangerous? |
PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0 3F39 FC49 2362 F9B7 0769
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gizmoh
Legendary
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Activity: 1428
Merit: 1000
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July 20, 2014, 06:27:45 AM |
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To go long you need collateral in USD.
Think the latest news update said you can use bitcoin as collateral to "self fund". Correct me if I am wrong. If true, doesn't that seem a tiny bit dangerous? The situation is more precarious than it would seem as the exit door for long traders is tiny if fire starts spreading. That Bfx only now realizes the need to reduce margin from 2.5 to 1.5 for btc/ltc collateral and start collecting swap interests from traders just in case.. |
How Ripple Rips you: "The founders of Ripple Labs created 100 billion XRP at Ripple's inception. No more can be created according to the rules of the Ripple protocol. Of the 100 billion created, 20 billion XRP were retained by the creators, seeders, venture capital companies and other founders. The remaining 80 billion were given to Ripple Labs. Ripple Labs intends to distribute and sell 55 of that 80 billion XRP to users and strategic partners. Ripple Labs also had a giveaway of under 200 million XRP (0.002% of all XRP) via World Community Grid that was later discontinued.[29] Ripple Labs will retain the remaining 25 billion"
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BitBits
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July 20, 2014, 06:31:01 PM |
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To go long you need collateral in USD.
Think the latest news update said you can use bitcoin as collateral to "self fund". Correct me if I am wrong. Use of BTC as collateral has always been the case, I can confirm that as I've done it myself in the past many times (backing the position swaps are in USD though). So, relative to USD funds on the account one could effectively go with 3.5:1 margin on long position. After the 21st this will change and leverage for those using BTC as collateral will become 1.5:1 (or 2.5:1 relative to USD account's value). Just to note, use of BTC as collateral, makes one's "tradable balance" floating. If you go long and BTC price is increasing, you can add to your position. The same goes for the opposite market direction. If BTC price is falling, "tradable balance" is decreasing and if price drops a lot, the margin call would come a LOT sooner then if the position was "USD backed" |
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FUR11
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FURring bitcoin up since 1762
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July 20, 2014, 07:50:56 PM |
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Oh wow, I didn't know that Bitfinex was in danger of such a big bubble collapse! I was thinking about lending some FIAT while it's doing nothing. I really wonder how safe their promise really is that they liquidate positions quick enough. Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
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Gimmelfarb
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July 20, 2014, 08:15:05 PM |
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Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
what they do is halt trading when the flash crash occurs, then they keep trading frozen while they wait for other markets to recover. then they unfreeze trading after rolling back flash crash trades. and lots of traders get screwed.... |
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Habeler876
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July 21, 2014, 12:03:58 AM |
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So, no noticeable dumps at 00:00 UTC -- so I guess it's not going to be that predictable.  I do wonder what effect this will have on the market (the new swap rules). |
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Newbie1022
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July 21, 2014, 12:32:22 AM |
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So, no noticeable dumps at 00:00 UTC -- so I guess it's not going to be that predictable. I do wonder what effect this will have on the market (the new swap rules). Anybody else notice how asymmetrical the market depth on Bitfinex is right now? Up 30 would take 2500 whereas down 30 would take 1800. Ever more noticeable, up 70 takes 6050 and down 70 takes 3680. Who in their right mind would buy at market price right now with such an imbalance even if you didn't anticipate an implosion in the next 24 hours? I think one way or another, we are going to see some real fireworks, today. |
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thezerg
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Activity: 1246
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July 21, 2014, 02:41:55 AM |
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Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
what they do is halt trading when the flash crash occurs, then they keep trading frozen while they wait for other markets to recover. then they unfreeze trading after rolling back flash crash trades. and lots of traders get screwed.... ...and the idea that they might freeze trades to protect lenders discourages people from betting on a flash crash and so the bid order book remains thin. |
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ACCTseller
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July 21, 2014, 02:53:16 AM |
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Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
what they do is halt trading when the flash crash occurs, then they keep trading frozen while they wait for other markets to recover. then they unfreeze trading after rolling back flash crash trades. and lots of traders get screwed.... ...and the idea that they might freeze trades to protect lenders discourages people from betting on a flash crash and so the bid order book remains thin. I would think that a lot of people have a price in mind that they would buy bitcoin at if the price were to drop to a certain level. Just because the order book is thin doesn't mean people will not step in to purchase if the price drops, say 10% |
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Yololintian
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July 21, 2014, 04:24:14 AM |
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Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
what they do is halt trading when the flash crash occurs, then they keep trading frozen while they wait for other markets to recover. then they unfreeze trading after rolling back flash crash trades. and lots of traders get screwed.... ...and the idea that they might freeze trades to protect lenders discourages people from betting on a flash crash and so the bid order book remains thin. I would think that a lot of people have a price in mind that they would buy bitcoin at if the price were to drop to a certain level. Just because the order book is thin doesn't mean people will not step in to purchase if the price drops, say 10% Under normal circumstances I would definitely step in to buy some if bitcoin drops 10% or more in a short period of time but consider that some people like me will not at this point in time because of the looming threat of a liquidation event on bitfinex if the price does drop about 10-20%; I have orders set really low and I hope that if they get filled bitfinex does not rollback trades. I'm also not sure about reports that bitfinex rolled back most trades during the last liquidation event in early February because my order at, if I remember correctly, 520~ was filled, and the flash crash happened in the low 600 range; and once trading resumed the price started higher than my order. |
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FattyMcButterpants
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July 21, 2014, 08:17:10 AM |
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if I remember correctly, 520~ was filled, and the flash crash happened in the low 600 range; and once trading resumed the price started higher than my order.
yeah, but the flash crash went down to about $100, just like BTCE. you can still see it on the charts if you go back and look at the low of the wick. the price started that high because they halted trading and rolled back orders. |
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Newbie1022
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July 21, 2014, 06:49:46 PM |
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Looking at the Bitfinex stats, I haven't really seen any deleveraging activity occurring at all. Is this going to be a spread out event? Something should happen. Not really sure what that something is. But there should have been some sort of visible pulse if they really did change their policy and nada.
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superbit
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July 22, 2014, 02:50:58 AM |
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Looking at the Bitfinex stats, I haven't really seen any deleveraging activity occurring at all. Is this going to be a spread out event? Something should happen. Not really sure what that something is. But there should have been some sort of visible pulse if they really did change their policy and nada.
If it is only on new offers taken out today then it will be very gradual as current offers expire over the next 30 days. |
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Harley997
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July 22, 2014, 03:54:23 AM |
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Is a roll-back during such a cascading crash really a safe thing to do or may people be left without their money?
what they do is halt trading when the flash crash occurs, then they keep trading frozen while they wait for other markets to recover. then they unfreeze trading after rolling back flash crash trades. and lots of traders get screwed.... ...and the idea that they might freeze trades to protect lenders discourages people from betting on a flash crash and so the bid order book remains thin. I would think that a lot of people have a price in mind that they would buy bitcoin at if the price were to drop to a certain level. Just because the order book is thin doesn't mean people will not step in to purchase if the price drops, say 10% Under normal circumstances I would definitely step in to buy some if bitcoin drops 10% or more in a short period of time but consider that some people like me will not at this point in time because of the looming threat of a liquidation event on bitfinex if the price does drop about 10-20%; I have orders set really low and I hope that if they get filled bitfinex does not rollback trades. I'm also not sure about reports that bitfinex rolled back most trades during the last liquidation event in early February because my order at, if I remember correctly, 520~ was filled, and the flash crash happened in the low 600 range; and once trading resumed the price started higher than my order. Remember that the prices and trading done at one exchange will affect the trading at other exchanges. If the price in bitfinex goes too far below the prices on other exchanges then people will buy on bitfinex and sell on BTC-e for example, attempting to arbitrage, this would create liquidity on bitfinex and cause prices to fall on other exchanges. |
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FattyMcButterpants
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July 22, 2014, 06:04:18 AM |
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Remember that the prices and trading done at one exchange will affect the trading at other exchanges. If the price in bitfinex goes too far below the prices on other exchanges then people will buy on bitfinex and sell on BTC-e for example, attempting to arbitrage, this would create liquidity on bitfinex and cause prices to fall on other exchanges.
sure, but arbitrage takes time. in this case, you'd have to sell on BTC-E, wire out fiat, wire it into Bitfinex, then buy. that sort of arbitrage is very risky to attempt in a fast-moving market like bitcoin. |
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rabsie
Newbie
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July 22, 2014, 08:45:54 AM |
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There is plenty of fiat on bitfinex, but often its better to lend it (I lend my fiat reserves for 2days at a time) than have it sitting doing nothing in an order book. I believe this is why the bid side on finex is often thin, especially at any significant distance from the current price.
Just for the record "This Bitfinex Credit Bubble could/might end well".
so there...
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HarryT1923
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July 22, 2014, 09:10:45 AM |
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There is plenty of fiat on bitfinex, but often its better to lend it (I lend my fiat reserves for 2days at a time) than have it sitting doing nothing in an order book. I believe this is why the bid side on finex is often thin, especially at any significant distance from the current price.
Just for the record "This Bitfinex Credit Bubble could/might end well".
so there...
but how can we distinguish between fiat that's there to buy in and fiat that will stay lending? some are there only to lend, i am sure. |
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