Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

bloomberg.com

Post reply on HN
Print view View original

41–50 of 98 posts

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#41

Post by tome »

klipt wrote: post #36
gthtjtkt wrote: post #28

Earlier quoted context omitted.

The token is called "Tether" and it's run by the Bitfinex exchange. It's supposed to be backed by US dollars, but they've refused to release any third-party audits to support that statement and it says this on their website: "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for…

And the market cap is over a billion! I wish I could print a billion in monopoly money and exchange it 1:1 for real dollars... https://coinmarketcap.com/currencies/tether/

Ah, so we're into fractional reserve territory. Never mind, I hear there are cryptocurrencies that will save us from that.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#43

Post by verroq »

JumpCrisscross wrote: post #39
verroq wrote: post #31

Earlier quoted context omitted.

Prices only move because of successfully filled orders. It is extremely unlikely that the bid side of the orderbook is completely empty. The worse case is that longs may get liquidated substantially below their liquidation price, depending on the exchange, loss is either socialised or paid thru the insurance fund. At no point would the exchange be bankrupt. Coinbase/gdax is a joke of an exchange and handles nowhere n…

> It is extremely unlikely that the bid side of the orderbook is completely empty It still happens quite often. In practice, the buy-side order book doesn't vanish. It just goes from $19k, $19k, $19k to $17k, $9k, $2k. The liquidating exchange hits the $17k, and then the $9k. Now you have a trade at $9k which (a) prompts further forced liquidations and (b) causes everyone to panic. > loss is either socialised or paid…

https://www.bitmex.com/app/insuranceFund

And cascading margin calls are possible, but it seems like all exchanges except for gdax/coinbase have a strategy to handle it.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#44

Post by cassetti »

verroq wrote: post #3

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…

Personal investors/prop traders have been able to short for years. Investors who aren't allowed/don't want to have direct custody of assets haven't been able to short until now.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#46

Post by klipt »

tome wrote: post #41
klipt wrote: post #36

Earlier quoted context omitted.

And the market cap is over a billion! I wish I could print a billion in monopoly money and exchange it 1:1 for real dollars... https://coinmarketcap.com/currencies/tether/

Ah, so we're into fractional reserve territory. Never mind, I hear there are cryptocurrencies that will save us from that.

Of course, there's SeriouslyGuysUseThisLimitedCoinOnlyNoOtherCoinsCoin.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#47

Post by verroq »

tedunangst wrote: post #38
verroq wrote: post #27

Earlier quoted context omitted.

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.

I would not want to trade on an exchange that claws back profits.

It is called the woodchipper for a reason

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#48

Post by zone411 »

rb808 wrote: post #7

I dont think there are any experienced shorters sane enough to short something with this much upward momentum. Once we get a decent downtrend though watch out.

That's not how it works... If you believe that "upward momentum" or "downtrend" mean something, why don't you go long now and sell at the first signs of weakness? Easy money, right? In reality, there are no simple and exploitable rules like this.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#49

Post by notyourday »

briatx wrote: post #45

The problem is that all of the Bitcoin futures are cash settled contracts. This means that they are not resolved with delivery of the commodity and have no direct influence on the underlying markets.

Today BTC futures are gambling.

In China based on Bet365 data the most popular wager is direction of the market going i.e. up/down.

Re: Bitcoin Climbs as Futures Debut Fails to Incite Attack by Shorts

#50

Post by jcoffland »

bufferoverflow wrote: post #26
empath75 wrote: post #10

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?

Tethers are used on exchanges that don't deal in dollars. Traders who want to sell Bitcoin for USD sell them instead for USDT (Tether). Theses are the people who are buying the newly issued Tether. New Tethers are issued so that USDT stays very close to $1. This works great as long as Bitcoin continues to go up relative to the dollar. If/when Bitcoin goes down significantly theses same exchanges would need to buy up Tether to keep the price near $1. But that means the issuers of Tether will have to give up the massive profits they are currently reaping. If they don't the house of cards comes crashing down.
Post reply on HN