"some exchanges will allow you to provide capital to bitcoin traders" - Where?

[manicminer]

I came across this:

https://www.quora.com/I-have-USD-2500-to-invest-Should-I-buy-Bitcoins-or-gold

"One thing that I found is that some exchanges will allow you to provide capital to bitcoin traders, and the return on that is quite nice.  Of course, you take the risk that the exchange crashes and burns and takes your money with it."

Which exchanges provide this?

[1713492277]

1713492277

[Lethn]

I think the numpty is talking about exchanges like Cryptsy or Bleutrade that offer up shares and pay a percentage of the fees to the holders, seems to be misunderstanding how it all works, I have seen a couple of Bitcoin trader management funds floating around that you can buy on the stock exchanges but I don't know how legit they are.

He's probably confused the two and thought they were the same thing, it's amazing how stupid some people become when they talk about cryptocurrencies.

[Lorenzo]

Doesn't Bitfinex offer something similar to this?

From the Bitcoin wiki:

Margin trading

Their margin trading feature is unique in the Bitcoin world. Basically, it allows you to borrow funds from lenders (see next feature) to trade bitcoins. If you make a profit, you get the profit and pay the depositor interests. If you make a loss, you reimburse the depositors the whole borrowed amount + interests. [2]

Lending

Their lending feature goes hand to hand with the margin trading feature described above.

If you don't feel like a trader and/or prefer safer investments, this feature is for you. Bitfinex allows you, using your deposit wallets, to lend bitcoins and/or dollars to traders. You can put offers with your chosen terms (which rates, for how long, and how much).

Link: http://en.bitcoin.it/wiki/Bitfinex

[Flashman]

I know BTC-e has a scheme where you commit your BTC to "follow" a trader's moves.

[scarsbergholden]

As mentioned above, this is just allowing traders to use leverage but the exchange is not the one providing the borrowed funds. I don't think that "capital" is a very accurate term as it implies that the lender stands to profit or lose money if the trader profits or looses money.

There are several exchanges that allow this and have allowed this for some time now

[manicminer]

In plain English it is just like a leveraged forex broker, but for bitcoin?