Hats off to Bitfinex team and Congratulations for perfect handling of the margin call liquidations !!! This was really something, I watched it all in real time.
To everybody else, it is now official, we have some 30 million worth of morons among users, who were holding onto their losing long positions till the very end. I am trully sorry about your losses, but you did knew perfectly well, all along, about what could happen to your positions, and it did happened.
Quite a harsh statement.
But please, enlighten me, how exactly did it unfold on bitfinex?
Ente
Harsh statement indeed yet it is fully correct.
I've always assumed the clientele on BFX would behave similar to regular forex sites: Using 2% to 5% of their funds for single trades, setting tight stop losses and avoiding margin calls under every possible cirumstance. From what I've read in BFX statements in the last weeks and what has happened now I can only assume that BFX clients are not usual forex traders but delusional maniacs.
According to BFX:
most people hold Bitcoin not Dollar on BFX for long positions -> less traders, more believers
a lot of them go long on maximum margin -> 100 % funds in trade, crazy, maxing out their full leverage, no room to breath left
waiting for the margin call -> an attitude you will go broke with 100 % of the time on a large enough scale.
I'm very glad BFX has managed this cascade so well but this is absolutely not over yet. Just think about it: The total sum of active swaps dropped over 16 %. The rest are probably not disciplined traders but just people who went retard-long at a lower price. If I think about who had my money in his hands I'm shivering. It's only thanks to the competence of BFX so far that this train is still running.
In other news, I'm guessing USD swap rates may fall as low as 0.03%/day.
Very, very easily possible. We went from 30.9 m in the last week to 23.5. Although yesterday I've seen over 4 m taken out in less than an hour we are still lower than directly after the flash crash and the sentiment is not exactly bullish at the moment. Over 2m swaps BEFORE THE FFR which is over 3m itself have piled up and I'm sure not all the money that has been returned during the flash crash is back on the offer book. Estimating from the current stats we would need a new all time high in swaps to get back over 0.1 %.
Lenders are in for a rough time and I hope some casuals will take their money off BFX because that safe, ultra high interest savings account has popped along with the credit bubble and will not be too attractive for quite some time.
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