SoylentNews is people
SoylentNews
Arthur T Knackerbracket has found the following story:
A massive wrong-way bet on Bitcoin left an unidentified futures trader unable to cover losses, burning counterparties and threatening to dent confidence in one of the world's largest cryptocurrency venues.
The long position in Bitcoin futures listed on OKEx, a Hong Kong-based exchange, had a notional value of about $416 million, according to an OKEx statement on Friday and data compiled by Bloomberg. OKEx moved to liquidate the position on Tuesday, but the exchange was unable to cover the trader's shortfall as Bitcoin's price slumped. Because OKEx has a "socialized clawback" policy for such instances, it will force futures traders with unrealized gains this week to give up about 18 percent of their profits.
While clawbacks are not unprecedented at OKEx, the size of this week's debacle has attracted lots of attention in crypto circles. The episode underscores the risks of trading on lightly regulated virtual currency venues, which often allow high levels of leverage and lack the protections investors have come to expect from traditional stock and bond markets. Crypto platforms have been dogged by everything from outages to hacks to market manipulation over the past few years, a period when spectacular swings in Bitcoin and its ilk attracted hordes of new traders from all over the world.
[...] Bitcoin, the biggest cryptocurrency by market value, dropped 2.2 percent to $7,383.44 at 4:56 p.m. Hong Kong time on Friday, extending its decline this week to 10 percent. It has slumped 48 percent this year.
-- submitted from IRC
(Score: 3, Insightful) by Snow on Wednesday August 08 2018, @06:36PM (6 children)
Zoom out.
Bitcoin goes up and it goes down. Right now, it's going down, but it will go up again.
Right now, inflation for bitcoin is about 3% (ie. The bitcoin supply increases by about 3%/year).
(Score: 3, Interesting) by Thexalon on Wednesday August 08 2018, @06:54PM
You appear to be conflating inflation and money supply (M0, in economist-speak).
Money supply, M0 is the amount of money in circulation created by the central system, i.e. the steady increase of Bitcoins caused by mining. The next measure of money supply, which Bitcoin doesn't have in force right now but conceivably could, is M1, which would be loans of Btc backed by smaller amounts of Btc from M0.
Inflation measures purchasing power, i.e. how much stuff you can buy for, say, 10 Btc. Since almost nobody accepts Btc as their form of payment, to buy most things you need to convert your Btc to some other currency before converting it to stuff. So, by my reckoning, 10 Btc was in January worth somewhere in the ballpark of 6 new Honda Civics ($15K * 10 Btc / $25K per Civic), and now a few months later is worth a bit under 3 new Honda Civics ($7K * 10Btc / $25K per Civic). That's a serious drop in purchasing power, and had this happened to a major government-backed currency the world would be panicking.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Wednesday August 08 2018, @06:56PM (4 children)
(Score: 3, Informative) by bob_super on Wednesday August 08 2018, @07:07PM (3 children)
Rule #1: Do not invest in high-volatility products any money that you can't afford to lose.
(Score: 2) by sjames on Wednesday August 08 2018, @11:37PM (2 children)
Sure. But what about that claim so long ago that bitcoin would BE money. That you'd use it same as cash for the morning Starbucks and a newspaper?
(Score: 0) by Anonymous Coward on Thursday August 09 2018, @12:05AM (1 child)
Turns out you can...
https://www.cnbc.com/2018/08/03/starbucks-partners-with-microsoft-ice-on-new-cryptocurrency.html [cnbc.com]
Acceptance is growing quickly. Your VISA card isn't worth anything in places that don't accept credit cards either.
(Score: 2) by bob_super on Thursday August 09 2018, @12:12AM
Neither is your Riyal or North Korean Won.