Margin increases demand instantaneously.
Margin increases demand but also that each time a trader buy then that means that there will be a time that he will need to sell it shortly which makes them neutral and wont affect the market at all. It is not like someone is holding after using this, someone is planning on short term which involve buying and selling simultaneously
I don't follow your thinking here - do you mean sell short or sell the bitcoin soon after buying it on margin?
Of course you dont, you are not a typical day trader type it seems
Margin is buying (or selling) on loan. Shorting is take a position on the stock/bitcoin that benefits me
I know what it is.
But if majority of people using margin are using it to facilitate quick swings in the price, then this would mute long term swings in the price.
It is not But If but it is the truth of people are doing with it and that is what I meant. Seriously why would someone even hold something for a long term which he get it from a loan? people are not doing this to be honest especially when there is a significant gain in the quick swing especially in this volatile moment.
It's a question of how many traders are using margin for short term transactions vs. long term transactions, or being able to finance hodl positions.
That would be a question for you, basically Im standing with that there will be more people that use it for quick swing instead. No one is holding things that they obtain via loan, the risk is far greater than expected profit.
