0x54444e (OP)
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January 18, 2015, 02:23:43 PM |
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Meuh6879
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January 18, 2015, 02:27:41 PM |
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Being a deflationary currency is bad for business inflation KILL people.
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Bitcoinpro
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January 18, 2015, 02:30:20 PM |
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manufacturing in these economies was dead 20 years ago
the Swiss central bank decided to stop trying to kick a can
that probably had stopped rolling anyway
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Flashman
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January 18, 2015, 02:35:08 PM |
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Leverage created more of a problem in the Swiss Franc situation though. Since a big move in conventional FOREX markets is a couple of percentage POINTS, i.e. fractions of a percent, the leverage allowed is huge, like 30x or so, whereas in bitcoin markets leverage is available but much smaller. I think BTCe only offers 4x leverage, so when BTC drops 30%, you get an effective 120% disparity to cover, but when swiss franc moves 10% with 30x leverage, it's a 300% loss to cover for some. And since national currencies are considered very low volatility, and the swiss franc "as good as gold" there were hundreds of millions parked in it, with the expectation that the risk profile was low, then shorting it was only considered maybe medium risk... so your medium risk investment, of your many millions, suddenly ends up with a 300% margin call.... that is not a good day.
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TL;DR See Spot run. Run Spot run. .... .... Freelance interweb comedian, for teh lulz >>> 1MqAAR4XkJWfDt367hVTv5SstPZ54Fwse6
Bitcoin Custodian: Keeping BTC away from weak heads since Feb '13, adopter of homeless bitcoins.
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0x54444e (OP)
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January 18, 2015, 02:39:02 PM |
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Leverage created more of a problem in the Swiss Franc situation though. Since a big move in conventional FOREX markets is a couple of percentage POINTS, i.e. fractions of a percent, the leverage allowed is huge, like 30x or so, whereas in bitcoin markets leverage is available but much smaller. I think BTCe only offers 4x leverage, so when BTC drops 30%, you get an effective 120% disparity to cover, but when swiss franc moves 10% with 30x leverage, it's a 300% loss to cover for some. And since national currencies are considered very low volatility, and the swiss franc "as good as gold" there were hundreds of millions parked in it, with the expectation that the risk profile was low, then shorting it was only considered maybe medium risk... so your medium risk investment, of your many millions, suddenly ends up with a 300% margin call.... that is not a good day.
You are missing one point 1 BTC = 215 USD 1 CHF ( swiss franc ) = 1.16 USD so the 30% drop or increase it's really BIG compared with eachother, so bitcoin is a LOT more volatile than any other currency.
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Kazimir
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January 18, 2015, 02:40:36 PM |
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Yeah, whatever. This is relevant only if you keep measuring Bitcoins or Swiss Francs in USD. It's a matter of time before the USD will no longer be relevant. The whole USD system is rotten from the inside out, the only 'solution' they can think of is always printing more money. ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FChZCnBY.jpg&t=665&c=7BEwc7k6lDWpaQ) I agree that Bitcoin is still unstable (which isn't good) but hey, it's still in it's infancy, this is to be expected. Bitcoin will stabilize in due time. Being a deflationary currency is bad for business, A common misconception. The obvious reasoning is something along the lines of: people will keep their money in their pockets if it's worth more next month. In practice, however, they don't. They need food, rent, cars, gas, paying taxes, holidays, insurance, internet, mobile phones, and tons of other products and services NOW, not next month. For the VAST majority of consumer spending, buying or paying next month instead of now is simply not a consideration whatsoever.
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Flashman
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January 18, 2015, 02:53:36 PM |
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Leverage created more of a problem in the Swiss Franc situation though. Since a big move in conventional FOREX markets is a couple of percentage POINTS, i.e. fractions of a percent, the leverage allowed is huge, like 30x or so, whereas in bitcoin markets leverage is available but much smaller. I think BTCe only offers 4x leverage, so when BTC drops 30%, you get an effective 120% disparity to cover, but when swiss franc moves 10% with 30x leverage, it's a 300% loss to cover for some. And since national currencies are considered very low volatility, and the swiss franc "as good as gold" there were hundreds of millions parked in it, with the expectation that the risk profile was low, then shorting it was only considered maybe medium risk... so your medium risk investment, of your many millions, suddenly ends up with a 300% margin call.... that is not a good day.
You are missing one point 1 BTC = 215 USD 1 CHF ( swiss franc ) = 1.16 USD so the 30% drop or increase it's really BIG compared with eachother, so bitcoin is a LOT more volatile than any other currency. You're missing the point that 10% variation in the Swiss franc did a lot more "damage" than 30% swing in bitcoin, due to one being expected to be volatile and the other not. In effect, maximum losses on 30% swing of BTC were ~120%, maximum losses on Swiss Franc were ~300%. IF you're going to point to which one is worse for business, look at the bigger amount of "damage" because export and import firms hedge against exchange variations, and if hedging has snowballed like that and cost them most of their profit for the year, it's baaad mmmkay.
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TL;DR See Spot run. Run Spot run. .... .... Freelance interweb comedian, for teh lulz >>> 1MqAAR4XkJWfDt367hVTv5SstPZ54Fwse6
Bitcoin Custodian: Keeping BTC away from weak heads since Feb '13, adopter of homeless bitcoins.
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mayax
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January 18, 2015, 03:07:06 PM |
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Leverage created more of a problem in the Swiss Franc situation though. Since a big move in conventional FOREX markets is a couple of percentage POINTS, i.e. fractions of a percent, the leverage allowed is huge, like 30x or so, whereas in bitcoin markets leverage is available but much smaller. I think BTCe only offers 4x leverage, so when BTC drops 30%, you get an effective 120% disparity to cover, but when swiss franc moves 10% with 30x leverage, it's a 300% loss to cover for some. And since national currencies are considered very low volatility, and the swiss franc "as good as gold" there were hundreds of millions parked in it, with the expectation that the risk profile was low, then shorting it was only considered maybe medium risk... so your medium risk investment, of your many millions, suddenly ends up with a 300% margin call.... that is not a good day.
You are missing one point 1 BTC = 215 USD 1 CHF ( swiss franc ) = 1.16 USD so the 30% drop or increase it's really BIG compared with eachother, so bitcoin is a LOT more volatile than any other currency. You're missing the point that 10% variation in the Swiss franc did a lot more "damage" than 30% swing in bitcoin, due to one being expected to be volatile and the other not. In effect, maximum losses on 30% swing of BTC were ~120%, maximum losses on Swiss Franc were ~300%. IF you're going to point to which one is worse for business, look at the bigger amount of "damage" because export and import firms hedge against exchange variations, and if hedging has snowballed like that and cost them most of their profit for the year, it's baaad mmmkay. How can you compare a shit like Bitcoin with Swiss franc? hahaha Bitcoin = up to 1 MIL users, half of them are on this forum ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) ) How can someone compare a real economy with a shit bubble Bitcoin? you must be...pffff Bitcoin has nothing to do with any economy. Bitcoin is based on black market and speculators. There is no Bitcoin economy. You remember me of PicPay retards who said the same things as you. Picpay economy, Picpay to the moon LOL... hahaha Many of you were not born in 2003 when PicPay was on wave. Same mentality as on this forum. Btw, they had a forum too where everybody made plans how rich will be soon LOL
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Kazimir
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January 18, 2015, 03:13:35 PM |
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How can you compare a shit like Bitcoin with Swiss franc? hahaha Bitcoin = up to 1 MIL users, half of them are on this forum ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) ) How can someone compare a real economy with a shit bubble Bitcoin? you must be...pffff Bitcoin has nothing to do with any economy. Bitcoin is based on black market and speculators. There is no Bitcoin economy. You remember me of PicPay retards who said the same things as you. Picpay economy, Picpay to the moon LOL... hahaha Many of you were not born in 2003 when PicPay was on wave. Same mentality as on this forum. Btw, they had a forum too where everybody made plans how rich will be soon LOL Similar guy in 1994: "How can you compare internet with REAL business and communication? There's like 1 MIL geeks calling themselves 'online', sending their precious 'emails' (some kind of virtual cyber postal service), it's just a shit bubble!" Oh, and if you are seriously comparing PicPay to Bitcoin, you really miss the point.
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ujka
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January 18, 2015, 03:40:36 PM |
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Being a deflationary currency is bad for business, A common misconception. The obvious reasoning is something along the lines of: people will keep their money in their pockets if it's worth more next month. In practice, however, they don't. They need food, rent, cars, gas, paying taxes, holidays, insurance, internet, mobile phones, and tons of other products and services NOW, not next month. True. Just look at IT industry, or mobile phone, tablet... they are under deflationary economic all the time, and are doing great. Great competition, better products, better prices for consumers... Banking industry needs that kind of competition.
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