Drop In Value And the Current Speculation - Whales pushing margin calls?

wasserman99

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Quote from: Gargulan on August 21, 2014, 11:59:43 PM

Quote from: itsAj on August 21, 2014, 11:22:37 PM

In theory, a large whale could attempt to manipulate margin calls at exchanges like bitfinex. If, over time there is demand for all of a whales hypothetical, many thousand BTC, then the whale were to decide that they no longer want to lend out their BTC, they could stop lending causing people to be forced to close their positions as they would be unable to carry their position.

Only in theory.

It is highly unlikely speculators have access to other traders position to force a margin call. And even if they do, they can not possibly know the full cost of pushing down price certain level and at what price they need to buy to recoup the expense.

I think a whale could easily cause massive margin calls on an exchange if they held a high enough of a percentage of the total BTC being borrowed. If they only withdrew the BTC what was being used by other traders then the traders would either need to pay more to carry their positions or would need to sell their BTC causing the price to fall and others to sell.

CozyLife

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Theymos, unban my account.

Everything is now speculation apparently with this. We say one thing at CCN, CoinDesk says alother in a matter-of-fact manner, then AhaMetals says something different. No one really knows why people do what they do right now, but my guess is that the downward pressure of big businesses like Dell selling bitcoins for fiat is causing the market to fluctuate, but to stay low.

Cortex7

full member

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Quote from: 1_anon on August 22, 2014, 12:20:20 AM

Smart money is realizing all crypto is backdoored

So crypto the problem

NSA has cooked so much of crypto its got no trust

Backdoored how?

dserrano5

legendary

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Quote from: paulsonnumismatics on August 24, 2014, 03:02:26 PM

Quote from: desired_username on August 22, 2014, 03:36:20 AM

There's a speculation subforum for a reason. Angry

Aaand another solid contribution from a hero member.

Why does the fact that he's a hero member make a difference? "Hero member" means "spent a lot of time and effort in the forum" and nothing else than that (barring account selling). Your contribution is no more solid than his.

paulsonnumismatics

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Honni Soit Qui Mal i Pense

Quote from: desired_username on August 22, 2014, 03:36:20 AM

There's a speculation subforum for a reason. Angry

Aaand another solid contribution from a hero member.

itsAj

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Activity: 588

Merit: 500

Quote from: Gargulan on August 21, 2014, 11:59:43 PM

Quote from: itsAj on August 21, 2014, 11:22:37 PM

In theory, a large whale could attempt to manipulate margin calls at exchanges like bitfinex. If, over time there is demand for all of a whales hypothetical, many thousand BTC, then the whale were to decide that they no longer want to lend out their BTC, they could stop lending causing people to be forced to close their positions as they would be unable to carry their position.

Only in theory.

It is highly unlikely speculators have access to other traders position to force a margin call. And even if they do, they can not possibly know the full cost of pushing down price certain level and at what price they need to buy to recoup the expense.

The amount of total margin being used is public information on bitfinex. A whale could make their bitcoin be available to be borrowed, and when their offer is accepted they know that someone is using it for margin. They see the total margin in use from public data. If, when it comes time to renew the loan to traders, the whale declines and withdraws their coins from the exchange then there would not be enough BTC to borrow so people would be forced to sell to close their positions.

desired_username

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There's a speculation subforum for a reason. Angry

qwerty555

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Merit: 250

It is possible/ likely that some manipulation of the market happens but this is always short term and the fundamental demand will decide where the price goes

This short-term selling pressure can be considered self-fulfilling, but it will have little bearing on where the asset's price will be weeks or months from now. In sum, if enough people use the same signals, they could cause the movement foretold by the signal, but over the long run this sole group of traders cannot drive price.

http://www.investopedia.com/ask/answers/05/selffulfillingprophecy.asp

thefunkybits

legendary

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This is what I suspected as well!

Whales could potentially push the price down to margin levels while buying large amounts off exchange

Coindesk reported on the effects of margin but I find it suspicious that Bitfinex put out a release stating that margins apparently didn't cause the drop (which is obviously what happened) Huh

I'm not too concerned though...take this as an opportunity to buy Cheesy

1_anon

newbie

Activity: 1

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Smart money is realizing all crypto is backdoored

So crypto the problem

NSA has cooked so much of crypto its got no trust

Gargulan

full member

Activity: 231

Merit: 100

Quote from: itsAj on August 21, 2014, 11:22:37 PM

In theory, a large whale could attempt to manipulate margin calls at exchanges like bitfinex. If, over time there is demand for all of a whales hypothetical, many thousand BTC, then the whale were to decide that they no longer want to lend out their BTC, they could stop lending causing people to be forced to close their positions as they would be unable to carry their position.

Only in theory.

It is highly unlikely speculators have access to other traders position to force a margin call. And even if they do, they can not possibly know the full cost of pushing down price certain level and at what price they need to buy to recoup the expense.

itsAj

hero member

Activity: 588

Merit: 500

In theory, a large whale could attempt to manipulate margin calls at exchanges like bitfinex. If, over time there is demand for all of a whales hypothetical, many thousand BTC, then the whale were to decide that they no longer want to lend out their BTC, they could stop lending causing people to be forced to close their positions as they would be unable to carry their position.

bitllionaire

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coindesk also analyses it
http://www.coindesk.com/margin-trading-blame-bitcoins-price-decline/

keanbosch

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http://www.ahametals.com/bitcoin-drop-in-value/

Topic: Drop In Value And the Current Speculation - Whales pushing margin calls? (Read 1303 times)