nrd525 Market Tracker

[nrd525]

Who benefits from uncertainity about Tether?

-Bitfinex exchange competitors. There are a lot of them and they are making large profits.

-Market manipulators. Can use a Tether scare to crash the price (though this hasn't been that effective).

-Bitfinex swap lenders.  While they don't stand to make as much money as the exchange competitors, they are probably the first to gain from Tether uncertainity by it fueling the high swap rates (currently 0.07%/day or more).  With $700+ million in swaps, lenders are making $140+ million/year.  Now they are unlikely to sustain these high swap rates when the market cools down (or goes bearish).  I haven't heard anyone talk about this group of interested parties.

-Bitfinex enemies.   A lot of people think that "Bitfinexed" has a vendetta against BFX, and/or lost a lot of potential profit by selling out of BTC in early 2017.

-The media. They love a good news story.  Though they haven't been giving it too much play and really the story is too complex for it to make it big.



Who loses from uncertainity about Tether?

-Bitfinex traders.  For instance, on WhalePool traders think the rumors are FUD that is designed to hurt Bitfinex.  They don't lend swap (with the occasional exception).  The traders lose liquidity.  Actually I'm not sure how much they really lose if there are unproven charges. They lose big if the exchange runs off with the money.

-Bitfinex itself.

-Bitcoin holders. In theory, the Tether rumors should be putting a damper on the bull market.  This could actually be a good thing.  Or it could be one of the factors that sets off a 1-2 year bear market or a flash crash.

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[1714877514]

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[nrd525]

As we near the end of the year, what is the impact of tax policy on the price?

In countries where capital gains tax is only paid upon realized capital gains (like the US), traders who are cashing out are more likely to try to sell part of their bitcoin in January so as to split the gains between two tax years and reduce their rate.  Though in practice, the large traders are already at the maximum rate so the impact might be negligible.  As a minor trader, I'm strongly considering this.

In countries where there is a wealth tax, traders are going to cash out part of their holdings to pay that tax.  Some European countries have wealth taxes (though others have recently abolished them).  When are they due? 

[Samarkand]

...
-Bitfinex swap lenders.  While they don't stand to make as much money as the exchange competitors, they are probably the first to gain from Tether uncertainity by it fueling the high swap rates (currently 0.07%/day or more).  With $700+ million in swaps, lenders are making $140+ million/year.  Now they are unlikely to sustain these high swap rates when the market cools down (or goes bearish).  I haven't heard anyone talk about this group of interested parties.

...

Interesting aspect that I didn´t think of before.

Regarding the impact of the end of the tax year, I think wealth tax in European countries
is a non-issue. E.g. in Norway, one of the countries with the highest tax rates, the wealth
taxes doesn´t even amount to 1 %. A Norwegian citizen has to pay 0.7 % to their local municipality
and 0.15 % to the state after a crossing certain threshold of wealth (http://www.skatteetaten.no/en/Rates/Wealth-tax/).

Capital gains tax is the more important influencing factor in my opinion.

[nrd525]

19k on GDAX and 18.8k on a new ATH at BFX .

I'm thinking there might be a similar mentality that affects people holding bitcoin, re-investing in ponzis, and investing in BFX swaps - not to mention other investments.   Namely you think you have found a far above average return, that you understand the risk, and that you feel the lack of diversification is worth it for the extra return.

This could explain how some ponzis survive so long - a very loyal following with a high re-investment rate.  On my part, at various points I've had a large percent of my liquid assets in BFX swaps and Bitcoin.  This is probably not a great strategy, unless you have the capacity to earn a lot of income or have other wealth (I have half a house, but still I'm pushing the risk level compared to most people).

So while Bitcoin isn't a ponzi - we might have a dangerous ponzi mentality in how we are investing in it.

Similarly, politically we often have extreme views - notably a lot of libertarians (on the right) and personally I'm in favor of a long term movement towards anarcho-communism (aka libertarian socialism).  This is probably more true of the original Bitcoiners as both some segements of the left and right share a distrust in the government, large corporations, and banks.

I was also thinking that it probably isn't shorting that will burst the bitcoin bull market, but people selling their holdings.  Probably mostly long term holders (aka holder extremists) who haven't been following a reasonable rule like cashing out 1/2 your bitcoin each time it doubles, but who decide that we've got parabolic - that it looks like 2013 - and that it is worth starting to follow a similar rule or a more holder one (eg selling 2.5% each time it goes up 10%).

I think about this as I'm wondering whether to sell 2 BTC for around 20k before the CME launches on Sunday at 4pm EST which I fear could reckon in the bear market.  It would be the smart thing to do.  But I'm considering holding on into January to save myself 6k-7k on taxes. And if it easier to go long into a bubble as everyone says (and the margin requirements are making it easier to do so as well - though is that just for a couple brokers?  Do we really have a good idea of what the average margin requirements will be as they are set differently by broker?), the wall street money might just cause us to go up.

[TheQuin]

And if it easier to go long into a bubble as everyone says (and the margin requirements are making it easier to do so as well - though is that just for a couple brokers?  Do we really have a good idea of what the average margin requirements will be as they are set differently by broker?), the wall street money might just cause us to go up.

So far there are only 4 brokers listed on CBoE as supporting the contract. So far I cannot find much information on who will be supporting CME but my main broker put out this on Friday:

Announcement: When Will Bitcoin Futures Be Available For Live Trading?
12-15-2017, 02:20 PM
The data will be available for Charting - No Live Trading...yet.

This market currently does not fit in our acceptable risk management profile. As soon as reaches acceptable trading conditions we will be able to enable this contract for live trading.

We will send out notice to everyone once it becomes available for live trading.

As I said earlier when they do introduce trading they are likely to be conservative with the margin requirements until they have enough data to calculate risk parameters.
Futures margin requirements work in a different way in that the exchange sets a margin requirement that only applies to overnight trades.
Futures trade in daily sessions and for the CME Bitcoin contract the hours are:

Sunday - Friday 6:00 p.m. - 5:00 p.m. (5:00 p.m. - 4:00 p.m. CT) with a 60-minute break each day beginning at 5:00 p.m. (4:00 p.m. CT)

The FCM is only required to put up margin when the market closes @5pm ET so they are free to set whatever they want for their customers to day trade. The brokers that have introduced the contracts so far are ones that typically have high day trade margins compared to the others. The CME has set the maintenance requirement at $38,485 which is approximately 40% of the contract value for 5 BTC. This is extremely high compared to for example the Emini S&P 500 currently at 3.36% and I would expect it to come down in the near future. As for the more serious brokers, we will have to wait to see what the day trade margins will be as they all seem to be taking the wait and see approach at the moment but their normal day trade margins can typically be around 10% of the maintenance margin.

[nrd525]

BFX USD swap rate at 0.5/day% for the past 60 hours.  There is a 45 million dollar wall/offer at 0.32%/day.  For the past month or two, the rate has been closer to 0.07%/day.
 Total swaps $940 million.

That's pretty crazy.  I wonder if the swap lending whale has run out of funds?

I'm working on setting up a LLC.  So I'm missing out on these rates.  Just my luck would be for the BTC price to go bear market and the rates to collapse by the time I get it setup and approved by BFX.

According to Reddit, Bitfinex sent out a warning letter to people with unverified accounts to discourage US residents who aren't meant to use the service.  They didn't threaten to confiscate your funds. They did threaten to inform the authorities about your account.  VPNs are also banned for all users (which is kind of stupid from a privacy angle).  It remains to be seen if their goal is to do their due diligence to discourage US residents, or if they are going to crack down.

[nrd525]

CME is doing negligible volume.
http://www.cmegroup.com/trading/equity-index/us-index/bitcoin.html

[nrd525]

98 out of the top 100 alt-coins are up in the past 24 hours. Probably by an average of 15+%.

https://www.livecoinwatch.com

[nrd525]

This is pretty neat.  And notably they have BTC prices going back to 2010!   Best if you switch to log view.
https://finance.yahoo.com/cryptocurrencies

[TheQuin]

BFX USD swap rate at 0.5/day% for the past 60 hours.  There is a 45 million dollar wall/offer at 0.32%/day.  For the past month or two, the rate has been closer to 0.07%/day.
 Total swaps $940 million.

That's pretty crazy.  I wonder if the swap lending whale has run out of funds?

I have been puzzled over this as well. Do you think it might be related to US customers pulling their funds out? Are there proportionally more big lenders than borrowers based in the US?

[nrd525]

BFX USD swaps are up a lot since the US users pulled out.  Swaps were only $280 million on November 11.  And now they are $994 million.  Unused funding is $20 million - so doesn't look like rate manipulation (which we've seen in the past).  Though if there was a lender whale it might make sense for them to restrict supply and get the high rates, especially if they think the gravy train (bull market) is going to end soon.  Of course there is no sign of there being a restriction of supply, other than the rate increase, as total swaps continues to grow exponentially.


Altcoins are continuing to go bullish.  Bitcoin market share down to 50%.  Past 24 hours: Bcash up 20%, ETH up 10%. 

[nrd525]

Bcash added to Coinbase.  Uh oh.

[nrd525]

We might be in for a long (1-2 year?) bear market.  BTC crashed from almost 20k down to 10.5k, and has bounced to around 13k.  Or maybe a faster bear market with more aggressive shorting as there are more margin trading options than in 2014.

Charlie Lee's tweet that he was selling all his LTC might actually have triggered other oldtimers (possibly developers) to sell Bitcoin.  Of course we've been due for a bear market for a long time.

I'm thinking I want to buy in the 1-2k range.  But very hard to predict the bottom.  Might be a lot safer to start buying in at 3k.

I would have sold 2 btc at 19k, but was holding on for January for taxes.  Should have sold!

BFX USD margin funding down from 1 billion to 650 million.

[nrd525]

I've placed major bid orders from 1k to 2k.

[nrd525]

I wonder is there any data on what percent of the bitcoins are held by new people vs older bitcoiners?    To wipe out the oldtimers we might need a faster and larger crash (in percentage terms) than the 2013-2014 one, whereas the newcomers are more likely to scare easily.

There are so many additional factors since 2014.  More exchanges.  Market cap 20x.  Alt-coins. ICOs (and the coming SEC crackdown).  Mainstream media. Tether.  MtGox liquidation in (very slow) process.  Likely ETFs, hedge funds, CME/CBOE futures.  BitConnect $100m-$1b ponzi.  $20+ transaction fees.

[nrd525]

Just realized if I'm using FIFO, I can lend BTC at Poloniex without messing up my cost-basis.  And it looks like the rates are 0.39%/day?  That makes the risk worth it.  Probably won't last, but getting 1% is pretty good (minus the large transaction fees).

On second thought, I thought I saw high rates - but now I see low ones (0.005%).  Not sure if there was a rate spike or if I misread it.

https://cryptolend.net/rates.html

[Syke]

I've placed major bid orders from 1k to 2k.

I'm not sure whether to call you an optimist or a pessimist. The odds of it going that low are minuscule.

[nrd525]

Flash crashes regularly drive crypto prices to zero. Of course they generally reverse the trades.  I don't think it will fall to 1k-2k right away, it could take 1 month to 3 years.  I'm just not doing anything else with my money until I get my LLC registered at BFX.  I'm waiting to hear back about how I should list a BFX username on the KYC form - given that as a US resident I'm not meant to have an account.  I also need to write up board meeting minutes for a one person board meeting, and draft various other documents. 

If anyone else has a LLC on Bitfinex, I'd love to get a copy of your documents that I could copy.  Might pay a small bit for it too =)

In the 2014-2015 bear market, I had bid orders down to $167 that hit.  To quote my Jan 2015 post:


"I've been buying on the way down. This is not as fun as buying on the way up, but hopefully more profitable in the long run.

The crash to $152 (Bitstamp), $166 (Bitfinex), $145-$150 (China hit 900-930 Yuan) or $168 (Btc-e: acting weird as historically they've been the lowest priced USD exchange) is the type of desperate fast crash that happens at the absolute bottom of the bear market.    Though it was easier to say this when the price has recovered to $200.  Now that we're sitting at $186 (Bitfinex) or $180 (Bitstamp), and Bitfinex BTC swaps are still high - the recovery is still looking a bit shaky.

Anyways, I've been buying lots of bitcoins on BFX:
1 BTC at $226
1 BTC at $216
2 BTC at $206
1 BTC at $197
2 BTC at $192
2 BTC at $187
2 BTC at $182
2 BTC at $177
2 BTC at $172
1 BTC at $167

$167 was the lowest bid that I had on the order book and it got filled!
An advantage of having bid orders already issued is that I didn't have to madly place any bids at the bottom when the price was fluctuating by as much as 5% in a single minute.

Over the past several days, I've doubled my number of BTC to around 40.  Time will tell whether this was a good move."

...

Also this median price forecast of $35k for 95 people is of course very high.  Of course we're in a bull market, so most people assume the price is going up.  The question is how does this bullish sentiment compare to other bubbles?  For instance, if you compare it to the BitConnect ponzi users - I'm sure they expect to make 1000%+ during the next year.  Of course that isn't a good comparison as that is a ponzi that must collapse, whereas Bitcoin could level off or reduce its exponential growth to a more sustainable rate.
https://www.reddit.com/r/BitcoinMarkets/comments/7lwb8k/reddits_consensus_price_forecast_for_btc_35000_in/

[nrd525]

GDAX/Bitfinex premium down to $100.  Probably $350 million of available funding on BFX (though only 260 million showing on the order books), enough to go long on 20,000 btc.

[Samarkand]

Just realized if I'm using FIFO, I can lend BTC at Poloniex without messing up my cost-basis.  And it looks like the rates are 0.39%/day?  That makes the risk worth it.  Probably won't last, but getting 1% is pretty good (minus the large transaction fees).

...

In my experience lending on Poloniex is only possible with small amounts of BTC. The rates are too unattractive
now, but even when the rates are more attractive you can´t lend out any serious amount of BTC.

The only exception to this observation was ahead of the Bitcoin Cash fork where you could get really
good rates for large volume if you were willing to lend BTC. This obviously had the downside
of not getting any BCH.