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bitfinex doesn't cash out into USD because they don't want to be connected to US financial regs, so they give you tethers that you have to take to another exchange to turn them into real money
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Jun 13, 2022 17:38
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another exchange that is totally unrelated and not at all the same people wearing the fakest of mustaches
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Jun 13, 2022 17:41
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PostNouveau posted:^^^ok, well if it's on-margin then the cash still doesn't exist, right? Like 1/10th of the cash exists? Neito posted:Bitfinex is basically putting numbers in a database with nothing backing them. So yeah, they're just not going to let you cash out. So you have "10,000 USD" but really you have $5 and an IOU for the other 9,995. At best. so here is what I think bitfinexed is saying is going on, based on how margin loans work and what (little) i know about bitfinex. so first you need to understand what a secured loan is: i lend you money, you give me collateral. if you don't pay me back (you default), I own the collateral. this is much easier than the solution for an unsecured loan: I sue you, and spend a while trying to force you to pay me. the collateral is usually worth noticably more than the loan, so I'm sure when i sell it, i get all my money back. the most common example is a mortgage: you don't pay your mortgage, I own your house. a margin loan is a secured loan with a security (or here, crypto). this is a kind of bad secured loan because the collateral can drop significantly in value. as a result, it is standard for a margin loan to have a system where if the collateral drops enough in value, that is a default unless you put up more collateral: i.e. then own your securities, even if you have been paying me. now, the real trick you may be thinking of is you can use the stock you are buying as part of the security. so i want to buy a share of microsoft, it costs $200, i can get a margin loan against that microsoft share to get the money to buy it. obviously nobody's lending me the full $200. but perhaps someone lends me $150, and I put up $50. if the share goes up, i get all the gains - so i get 4x as much. if it drops, i suffer all the losses too - so I lose 4x as much. if it drops to, say, $170 the share probably gets sold before it hits the $150. that's all background you have to understand. the key thing though is, if you are buying on margin, someone put up the rest of the money. it didn't come from thin air. bitfinex offers margin loans, and it gets the cash from people who deposit Actual Dollars at bitfinex. if you have $1,000 sitting there, they say "hey you can earn free money, tick this box" and then they use your $1,000 to fund margin loans. now, this should be relatively risk-free - if crypto is collapsing, bitfinex seizes the collateral (you should have, like, $1,500 worth) and sells it before you take a loss and gives you your $1000 back. but what bitfinexed is saying they're doing is, basically, not taking and liquidating the collateral. they're letting the margin loans ride. goldman sachs would never let you do this because they don't give a gently caress about the price of microsoft stock. they may be long, they may be short, on microsoft but institutionally they do not care, they just want their money. but bitfinex does care, it cares a lot. any crypto business inherently is long on crypto because otherwise they don't have a business. so bitfinex is letting people get short on collateral without calling their loans and letting people buy more bitcoins on margin with insufficient collateral. bitfinex is doing this to try and support the price of bitcoin. if this works, the lenders never notice. but if it doesn't, you thought you had $1,000 in real money in bitfinex. you will wake up to find you have no money. you have crypto collateral. and if bitfinex declares a default and gives you your collateral, they probably won't sell it for you (they don't want to hurt the price of bitcoin). they'll just tell you surprise, you now own $800 worth of bitcoin, sell it yourself. sorry, now $700. sorry, actually you have a shitcoin that went to zero. your money will have gone to the people who sold their crypto and got the money out of bitfinex. bitfinex, assuming they didn't loan their own money, will be fine. they used your money, not theirs, to try and prop up the price. (all of this applies equally if you thought you had tether or some other "stablecoin" instead of Real Money)
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Jun 13, 2022 17:41
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Hammerite posted:Laffs are soon going to surge to an all time high. I can feel it! WAGLAI
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Jun 13, 2022 17:42
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at the end of the day the big risk everyone ignored in all these dumb crypto financial things is that if you are lending real money against crypto, you are doing so with a business that is long crypto. they have to be: they're a crypto business. crypto goes to $0, they don't have a business, even if the business only generated real money and they didn't buy any crypto (and of course, they did buy crypto). so when crypto stuff copied Real Finance ways of lending against securities, they forgot that banks just care about getting paid and they will call your loan the instant they feel insecure (even if its their client's money, not theirs). they will not let it ride because they don't want to hurt the stock. but a crypto company absolutely will let loans ride rather than liquidate collateral because if they liquidate collateral and depress prices, that hurts them. also personally hurts all their exec's crypto "portfolios" this is why, probably, celsius (which seems to do the same thing: make loans secured by crypto) suddenly is "halting" withdrawals edit: also I really don't understand how the graphs bitfinexed supports his claim to know someone's buying that much bitcoin on margin, i'm just assuming that is true - but I don't know it to be true as opposed to him just misreading a graph. evilweasel fucked around with this message at 17:56 on Jun 13, 2022 |
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Jun 13, 2022 17:50
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crashcoin
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Jun 13, 2022 18:13
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Has anyone suggested a DFDIC yet? It seems the next logical step.
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Jun 13, 2022 18:14
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Vincent Van Goatse posted:crashcoin it's bitcoincrash 
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Jun 13, 2022 18:14
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evilweasel posted:at the end of the day the big risk everyone ignored in all these dumb crypto financial things is that if you are lending real money against crypto, you are doing so with a business that is long crypto. they have to be: they're a crypto business. crypto goes to $0, they don't have a business, even if the business only generated real money and they didn't buy any crypto (and of course, they did buy crypto).
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Jun 13, 2022 18:17
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Caros posted:Has anyone suggested a DFDIC yet? It seems the next logical step. we regret to inform you that the dfdic was a scam
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Jun 13, 2022 18:18
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Boxturret posted:it's bitcoincrash I'm seeing this but hearing the Bitconnect guy screaming "Bitcoincrash!"
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Jun 13, 2022 18:18
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Deep Dish Fuckfest posted:we regret to inform you that the dfdic was a scam DFDIC 2.0
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Jun 13, 2022 18:19
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Caros posted:DFDIC 2.0 in the event of a bank run, insurance funds will be minted and airdropped to your wallet address
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Jun 13, 2022 18:22
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Caros posted:Has anyone suggested a DFDIC yet? It seems the next logical step. 
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Jun 13, 2022 18:24
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CommieGIR posted:I'm seeing this but hearing the Bitconnect guy screaming "Bitcoincrash!" Bitdisconnect.
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Jun 13, 2022 18:27
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coelomate posted:in the event of a bank run, insurance funds will be minted and airdropped to your wallet address a lotta y'all still don't get it. account holders can use multiple fdic's on a single account So if you have one bank account and 3 fdic's you can insure up to three new accounts
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Jun 13, 2022 18:28
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Jun 13, 2022 18:37
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astral please do the needful and make thread titles use images
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Jun 13, 2022 18:43
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Be your own bank run!
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Jun 13, 2022 18:47
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evilweasel posted:so here is what I think bitfinexed is saying is going on, based on how margin loans work and what (little) i know about bitfinex. Thank you, this made a lot more sense of it for me
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Jun 13, 2022 18:47
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vortmax posted:bitfinex doesn't cash out into USD because they don't want to be connected to US financial regs, so they give you tethers that you have to take to another exchange to turn them into real money It's like a loving pachinko parlor where you get little Tchotchke for your pachinko balls that you can go sell down the street to the "separate" and "independent" booth that buys them for whatever amount of money. (Unless that's not a real thing and just some dumb thing I made up half-remembered from an article)
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Jun 13, 2022 18:49
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Don't remember seeing this little tidbit but maybe it got lost in the tide of lols
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Jun 13, 2022 19:08
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Neito posted:isn't this fractional reserve banking, the very thing many coiners rally against? this time its fictional reserve banking
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Jun 13, 2022 19:11
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gschmidl posted:Don't remember seeing this little tidbit but maybe it got lost in the tide of lols Its hilarious because this maroon actually believes they are fighting traditional finance rather than playing right into their hands.
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Jun 13, 2022 19:19
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FAUXTON posted:this time its fictional reserve banking know how this thread likes to quip that the cryptocurrency ecosystem is speedrunning the history of banking and financing? well, it's moving so fast now that we're mashing together a mid-1800s "wildcat banks that have barrels of rocks with a layer of gold sprinkled on top" type of scam situation with a 1930s "oops all of the banks were too undercollateralized and illiquid" bank-run kind of situation. it's fractional fictional reserve banking.
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Jun 13, 2022 19:25
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today's money stuff newsletter (https://newsletterhunt.com/newsletters/money-stuff-by-matt-levine) has some good stuff on celsius such as, it borrowed $500 million from tether, which according to tether's own claimed financials would make tether undercollateralized if it could not be repaid
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Jun 13, 2022 19:27
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pfff that's only half a billion
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Jun 13, 2022 19:29
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FCKGW posted:Be your own bank run! grifting peter to pay paul
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Jun 13, 2022 19:29
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it's cool, i hear tether just found like a billion in the couch cushions
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Jun 13, 2022 19:29
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also that celsius was paying out 17% interest rates which means it was less a dumb collateralized loan thing and more an "open and notorious ponzi scheme" thing
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Jun 13, 2022 19:30
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17%? and you call that a ponzi scheme? if you're not in the three digits per month you can get outta here
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Jun 13, 2022 19:33
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reminder that there are over 70 billion tethers in circulation
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Jun 13, 2022 19:34
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'circulation'
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Jun 13, 2022 19:37
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FAUXTON posted:this time its fictional reserve banking The Something Awful Forums › Discussion › Serious Hardware/Software Crap › YOSPOS › buttcoin: fictional reserve banking
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Jun 13, 2022 19:39
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I like how 150% of tethers """"market cap"""" was traded in the last 24 hours.
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Jun 13, 2022 19:42
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i like how tether has still not recovered to 1.000 since april and nobody seems to mind
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Jun 13, 2022 19:47
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CommieGIR posted:Its hilarious because this maroon actually believes they are fighting traditional finance rather than playing right into their hands. Also Tradfri is an IKEA smart bulb.
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Jun 13, 2022 19:51
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Neito posted:The Something Awful Forums › Discussion › Serious Hardware/Software Crap › YOSPOS › buttcoin: fictional reserve banking It was that at one point but it's an evergreen.
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Jun 13, 2022 19:53
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I might have missed this posted, but big lols for me. Celsius is freezing withdrawals and transfers, so users that have loans to Celsius cannot make their payments to Celsius from Celsius. They're complaining that their collateral will be liquidated. lol https://twitter.com/flyingspoon8891/status/1536188673255002113
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Jun 13, 2022 19:53
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Gazpacho posted:i like how tether has still not recovered to 1.000 since april and nobody seems to mind if 0.9999999...=1, then surely 0.99=1? Perhaps, eventually, we'll come to learn that 0=1.
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Jun 13, 2022 19:55
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