I'm not a professional trader, nor an experienced one. I just made small amounts of margin trading on bitfinex on different trading pairs. So I wonder if I can bet on GBP falling, using BTC - I dont have other possibilities. I was thinking about longing BTCGBP, and shorting BTCUSD at the same time (if I'm very confident for a long in BTCUSD I could leave the short, or select a different percentage than 50:50). I know, I would pay two times for transaction and funding fees, but If I think a 5-10% drop of GBP would be possible I could live with that. Am I completely wrong, or is this a common way to do so? Your opinion please!
What would the journal entries be for a margin buy of BTC/USD? Let’s say you bought 10 BTC at $5000 each and sold at $10000 each a month later at 10x leverage (i.e. you only had to have 1 BTC or $5000 in your account to do this trade). Should an entry be included for the effective loan from the brokeexchange, and an entry for the repayment at time of sale? Let’s assume a weekly rollover fee of 0.7 of the margin lending. Let’s assume full double entry accounting is used for all components of the trade and you have $5000 USD in your account to satisfy the margin requirement, and once you enter the trade the exchange/broker disallows further trades since it would reduce your balance below the margin requirement amount.
Quick question about bitfinex: How do I convert USD profits from margin trading back into BTC?
I was trading on margin the other day and made a little money. The profits showed up in my trading account as USD. I tried to go to the exchange section and convert to BTC but since the funds were in my trading account (row) I couldn't use them. This is kind of freaking me out because I would really like to do all deposits and withdrawals using BTC. My default currency was listed as BTC the whole time.
"Looking into Nexo's business model it's increasingly clear to me that they are insolvent due to chainlink's recent rise. A brief introduction to how these crypto deposit/lending sites generally work, or are supposed to work. You deposit a cryptocurrency. Someone else wants to borrow it against their own cryptocurrency as collateral (reasons typically are to get some funds without selling their own crypto, or for margin trading). The borrower pays an interest rate, the lender receives a lower interest rate and the middleman (in this case it would be nexo) takes a large cut of the difference. A decentralized version of this is Aave. Centralised versions are crypto.com and nexo. Typically stablecoins have the highest borrow and lending interest rate, because demand to borrow them is highest. Next is typically bitcoin/ethereum, and most ERC tokens are very low because there's little demand to borrow them. Chainlink has been close to 0 on the likes of Aave as well as binance for months, while nexo pays 5%. Now, nexo's business model is a bit different. While they take deposits in LINK and pay 5% on them, it seems they do not lend out LINK or other cryptocurrencies. Instead they lend out fiat. This means they are not lending out assets deposited by other users, like Aave and binance. Instead it would mean they are selling user deposits to fiat and then lending out said fiat. Chainlink has been trading as low as $1.8 this year and mostly in the $3-5 range. No doubt chainlink deposits are very popular with nexo, there are lots of long term holders and the 5% interest rate they claim to pay is much higher than elsewhere. So this likely means they've taken a lot of LINK deposits and sold them to fiat. So why is this a problem? Well the way this business SHOULD work is: User A deposits 1 BTC. User B borrows 1 BTC. A receives 1%, B pays 2%, and the middleman/nexo would receive the 1% cut. Nexo doesn't care which way the price of bitcoin moves. It has one bitcoin as a receivable (that which B has borrowed) and one bitcoin as a payable (that which A has deposited). It's overall exposure is zero. However, it's clear that nexo's business model is: User A deposits 1000 LINK Nexo sells 1000 LINK for $5 each User B borrows $5000 So now, nexo has 1000 LINK as a payable, and 5000 USD as a receivable. As you can see, nexo is essentially opening a large synthetic short on every asset that is deposited with them. Now LINK goes to $8. Suddenly nexo has $5000 in receivables and $8000 in payables. Now consider this but with millions of dollars of LINK deposits. Nexo is now insolvent. Look at the site yourself (if you trust it, I understand if you don't). You can confirm all this yourself. Their business model is not sustainable. This is the first crack. And absolutely explains why they have released the fraudulent short report. It's because they are close to insolvent. Do you think it's a coincidence that they recently stopped paying interest in LINK and are paying in USD? A corollary of the above is that your LINK deposits , or any deposits on nexo are not safe. They likely do not have enough LINK to honour all deposits. Nexo likely received a load of chainlink deposits. Possibly millions of LINK. Chainlink has an attribute that there are lots of long term holders who would all love to receive interest on their LINK. The recent price increase in LINK means nexo can’t afford to pay back all their LINK deposits. They likely sell LINK as it comes in. Which means they’ve been selling as low as $1.80 and are essentially short since then. All it takes is one large positive news piece on LINK to seal their fate, and with oracle partnership, Microsoft partnership likely end of August and staking around the corner it could come very soon. If this goes to news outlets that will take this information to whales that are self-interested in fishing for liquidations." Any thoughts on this? Nexo going belly up as soon as Link moons?
26412 x 1 x 1 ÷ 50 = 528.24 USD. If account currency is BTC then 528.24 ÷ 5141 (BTCUSD Rate)=0.10275044 Example 2: NIKKEI225 1 Lot = Current price x Volume (1 Lot) x 100 contracts ÷ Fixed Leverage 22174 x 1 x 100 ÷ 50 = 44348 JPY. If account currency is BTC then 44348 ÷ 575239 (BTCJPY Rate) = 0.0770949 Leverage: 1:20 (BTC/USD), no margin trading with altcoins Funding Rate: dynamic Funding Interval: every 8h Maker Fee: 0.2% Taker Fee: 0.2% Trading Pairs: BTCUSD, ETHUSD, LTCUSD, XMRUSD, BCHUSD, ZECUSD, DASHUSD, XRPUSD, EOSUSD, BCHBTC, DASHBTC, ETHBTC, XMRBTC, ZECBTC *BTCUSD Perpetual Contracts. Explanation. Leverage: This is the main concept of Margin trading is the practice of borrowing funds [from a lender] to trade. This is a form of “leveraged trading” that provides traders access to more buying power than the balance of their Coinbase accounts by using certain assets (currently only BTC, USD, and USDC) as collateral for loans. So if you have 1000 USD in your margin wallet, that 1000 USD will serve as collateral for opening margin positions to a maximum of 5:1. ie a margin position with a USD value up to 5000 USD. Assuming a BTC price of 250 you would be able to open a long or short margin position of 5000 / 250 = 20 BTC BTC USD (Bitcoin / US Dollar) This is the most popular Bitcoin pair in the world. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of Bitcoins is carried out collectively by the network.
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