21–30 of 98 posts
Short term betting (for or against) Bitcoin is unlikely to result in much profit.
It is not so much a directional play as it is a force for arbitrage opportunities.
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It is not so much a directional play as it is a force for arbitrage opportunities.
True, but those arbitrage opportunities will stabilize the price and make other similar opportunities less profitable. I suspect that the real reason these haven't all been ironed out (exploited already) is because Bitcoin exchanges lack the infrastructure guarantee that transactions close when they are expected to, and thus the fee levels wash out much of the arbitrage (for now). But arbitrageurs operating outside t…
Earlier quoted context omitted.
If you are short and bitcoin goes up, then you should lose money. That is expected. If bitcoin price crashes, how does it imply exchanges will become compromised??? Counterparty risk also exists for established exchanges. Secondly I’d venture to say for retail traders, their offerings are vastly inferior to bitfinex/bitmex/okcoin. You get much higher leverage and lower margin requirements. You also don’t pay for quot…
> If bitcoin price crashes, how does it imply exchanges will become compromised??? The same way every market before central counterparties (CCPs) failed: exchange participants default and leave the exchange holding the bag [1]. If an exchange permits shorting, then it permits margin accounts. When prices drop, margin borrowers have a habit of defaulting. This is in addition to the risk of lightly-regulated exchanges…
You’ve been able to short bitcoin on okcoin, bitfinex, bitmex either via margin or through futures products for years. Secondly, newly launched futures products will have very thin liquidity due to the lack of market makers. There is no way a short/long position on CME will move the market in a meaningful way for a while. I wish Bloomberg et al will stop repeating this “you can’t short” meme because it you can and yo…
So far all BTC trading was done mostly by hobbyists who have no clue how markets function.
You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.
Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.
Earlier quoted context omitted.
If you are short and bitcoin goes up, then you should lose money. That is expected. If bitcoin price crashes, how does it imply exchanges will become compromised??? Counterparty risk also exists for established exchanges. Secondly I’d venture to say for retail traders, their offerings are vastly inferior to bitfinex/bitmex/okcoin. You get much higher leverage and lower margin requirements. You also don’t pay for quot…
> If bitcoin price crashes, how does it imply exchanges will become compromised??? The same way every market before central counterparties (CCPs) failed: exchange participants default and leave the exchange holding the bag [1]. If an exchange permits shorting, then it permits margin accounts. When prices drop, margin borrowers have a habit of defaulting. This is in addition to the risk of lightly-regulated exchanges…
They hold up pretty well during large price crashes.
You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.
> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
Bloomberg recently did a story on it:
https://www.bloomberg.com/amp/news/articles/2017-12-05/myste...
Earlier quoted context omitted.
> If bitcoin price crashes, how does it imply exchanges will become compromised??? The same way every market before central counterparties (CCPs) failed: exchange participants default and leave the exchange holding the bag [1]. If an exchange permits shorting, then it permits margin accounts. When prices drop, margin borrowers have a habit of defaulting. This is in addition to the risk of lightly-regulated exchanges…
These exchanges will automatically liquidate your position in order to avoid causing a loss to the exchange. Okcoin uses socialised losses (clawback), bitmex uses ADL with their insurance fund. Bitfinex does some weird stuff. They hold up pretty well during large price crashes.
In a crisis, prices move discontinuously. On one side of the discontinuity, you have adequate reserves. On the other side, you're broke. There is no moment in between when one gets to gently liquidate collateral.
> They hold up pretty well during large price crashes
Usually I'd say past performance does not guarantee future results, but in this case, we haven't had the past performance. Every Bitcoin has responded to even intraday crashes by pulling the plug [1].
[1] https://news.bitcoin.com/coinbase-customers-suffer-from-dela...
You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.
I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?
Some exchanges don't accept fiat, so if you want to trade USD/BTC you settle for USDT/BTC.