After Bitcoin Futures, Watch Out for Crypto Repos the price of bitcoin

2 weeks ago | chollida1 says :

> it also allows them to short—bet on a falling price—the cryptocurrency they borrow against the one they lend, mimicking a common tactic among hedge funds. The investor can sell the cryptocurrency they borrow on the open market and hope to buy it back at a lower price, pocket the difference and return the currency to the lender. Meanwhile, they are betting the currency they handed over as collateral doesn’t fall by as much as the one they borrow.

I mean it makes sense that someone would come along and try and build a business around this as many hedge funds are already doing this sort of stat arb already. Locking down borrow is a real pain at the moment for a few reasons:

– no standardized terms for collateral, terms, and borrow prices

– no api to ping people for borrow

the price of bitcoin

– no way to get borrow quickly, ie if you see a short term trend you can’t get borrow quick enough to do the trade before the market arbs out your anomaly.

I don’t however think this will be what makes people start to short bitcoin as I don’t know who wants to make a pure directional bet on bitcoin going down at the moment. Like the commodity guys, CTA’s, learned many years ago, you don’t fight the trend, you latch onto it and ride it.

Shorting bitcoin seems like trying to short china a few years ago. You can know that something is wrong and the numbers are all made up but being right doesn’t matter when the market ignores fundamentals.

Or put another way, in a trending market you can be right and get your face ripped off, or accept it and make money on the trend.

2 weeks ago | chollida1 says :

the price of bitcoin

> it also allows them to short—bet on a falling price—the cryptocurrency they borrow against the one they lend, mimicking a common tactic among hedge funds. The investor can sell the cryptocurrency they borrow on the open market and hope to buy it back at a lower price, pocket the difference and return the currency to the lender. Meanwhile, they are betting the currency they handed over as collateral doesn’t fall by as much as the one they borrow.

I mean it makes sense that someone would come along and try and build a business around this as many hedge funds are already doing this sort of stat arb already. Locking down borrow is a real pain at the moment for a few reasons:

– no standardized terms for collateral, terms, and borrow prices

– no api to ping people for borrow

– no way to get borrow quickly, ie if you see a short term trend you can’t get borrow quick enough to do the trade before the market arbs out your anomaly.The price of bitcoin

I don’t however think this will be what makes people start to short bitcoin as I don’t know who wants to make a pure directional bet on bitcoin going down at the moment. Like the commodity guys, CTA’s, learned many years ago, you don’t fight the trend, you latch onto it and ride it.

Shorting bitcoin seems like trying to short china a few years ago. You can know that something is wrong and the numbers are all made up but being right doesn’t matter when the market ignores fundamentals.

Or put another way, in a trending market you can be right and get your face ripped off, or accept it and make money on the trend.

2 weeks ago | chollida1 says :

> it also allows them to short—bet on a falling price—the cryptocurrency they borrow against the one they lend, mimicking a common tactic among hedge funds.The price of bitcoin the investor can sell the cryptocurrency they borrow on the open market and hope to buy it back at a lower price, pocket the difference and return the currency to the lender. Meanwhile, they are betting the currency they handed over as collateral doesn’t fall by as much as the one they borrow.

I mean it makes sense that someone would come along and try and build a business around this as many hedge funds are already doing this sort of stat arb already. Locking down borrow is a real pain at the moment for a few reasons:

– no standardized terms for collateral, terms, and borrow prices

– no api to ping people for borrow

– no way to get borrow quickly, ie if you see a short term trend you can’t get borrow quick enough to do the trade before the market arbs out your anomaly.

I don’t however think this will be what makes people start to short bitcoin as I don’t know who wants to make a pure directional bet on bitcoin going down at the moment.The price of bitcoin like the commodity guys, CTA’s, learned many years ago, you don’t fight the trend, you latch onto it and ride it.

Shorting bitcoin seems like trying to short china a few years ago. You can know that something is wrong and the numbers are all made up but being right doesn’t matter when the market ignores fundamentals.

Or put another way, in a trending market you can be right and get your face ripped off, or accept it and make money on the trend.