Just a simple thread with a few questions for btfinex users.
What do users have to say about the USD swap facility? Other than btfinex going bust or running with the cash what are the risks to capital in extreme market movements? Bitfinex says traders losses don't cause swap lending losses but is this really the case?
Having a look at swap rates they are currently about 0.16% per day which is very tempting. I have read of rates up to 0.44% per day.
A high risk strategy might be to move a % of ones btc holdings there, exchange for dollars and swap on short term swap loans. With the idea of buying back when btc reaches a certain threshold.
Another option is to wait for the next peak (should it come) and sell out an agreed % at an agreed target price (1900, 2500, 2900) and leave it compounding lent out as swap through the next few months.
It's common knowledge that trading is unprofitable for most participants, whilst carrying risk of holding btc on an exchange. This seems similar in terms of institutional risk but a more straightforward way to generate consistent profit.
Comments?
What do users have to say about the USD swap facility? Other than btfinex going bust or running with the cash what are the risks to capital in extreme market movements? Bitfinex says traders losses don't cause swap lending losses but is this really the case?
Having a look at swap rates they are currently about 0.16% per day which is very tempting. I have read of rates up to 0.44% per day.
A high risk strategy might be to move a % of ones btc holdings there, exchange for dollars and swap on short term swap loans. With the idea of buying back when btc reaches a certain threshold.
Another option is to wait for the next peak (should it come) and sell out an agreed % at an agreed target price (1900, 2500, 2900) and leave it compounding lent out as swap through the next few months.
It's common knowledge that trading is unprofitable for most participants, whilst carrying risk of holding btc on an exchange. This seems similar in terms of institutional risk but a more straightforward way to generate consistent profit.
Comments?
I've parked 10% of my 'btc money' into bitfinex. I've been making 8-10%/mo which is ~3x per year.
How I see it in 1 year:
if btc rises above 1800 (3x when i sold at 600): I would have made more holding all BTCs, but BTC is now 1800 so who cares!!!
btc from 600-1800; I made more than just holding
btc drops to 300; I lost 50% of my 90%. My 10% is now worth 3x as much and can buy 2x as much so 6x. So in $$ my NW would be 45%+30% = 75% in total BTC it would be 90 % + 60% = 150%. (THIS IS KEY, if btc drops to 1/2 the price, my nw in usd is still 75% but i increased my btc stash by 50%)
btc drops to 100; I lost 80% of my 90%. My 10% is 3x higher with 6x buying power = i own alnost 3x my initial coin.
but there are risks, aka bitfinex closes shop.
Current swap prices are closer to 50% per year, and you are assuming this won't drop, which it probably will unless the BTC price keeps skyrocketing. Current swap prices are a lot better than during the last calm period, and long-term the swap rates go down over time (last year I had like 7% a day for one loan, unfortunately only had 10 dollars or so on the website to test the waters).
I still like the rates there are today, but don't expect them to last unless there is another bubble. And though I believe the bitfinex team wants to establish a long-lasting profitable business, it could still all go horribly wrong.
