You can right now lend USD on bitfinex at nearly 1% ROI per day

When there will be a strong enough drop in price (20+%), the cascade could make it 50-75% drop instead.

but will i lose the money when everything comes crashing down?

YES! FUCKING WHEN??

holy shit

last time I saw this I was lending out btc @ 5% a day right before the bcash fork on poloniex

>tfw margin long
I'm a greedy jew so I always place a lending BID at 0.2% or something.

I need this answered

if you loan out your btc you don't have it for certain time
so no you can't sell btc you've loaned out

support.bitfinex.com/hc/en-us/articles/213918969-What-are-the-risks-associated-with-offering-funding-

here is the important part:
>In the event, and this has never happened, the market would drop (or rise) so fast that the forced liquidations cannot be matched quickly enough to bids/asks in the order book, we have algorithms in place to slow down liquidation to prevent the situation from spinning out of control. In theory, these measures could still cause margin traders to lose more than the funds they hold in their account as collateral. Up to a certain point, we will cover the losses from our own reserves; however, if the price would change so dramatically that the majority of all margin positions would drop below zero, losses eventually will be shared with margin funding providers. This has never happened in the existence of our platform, but in theory, it could happen.

tl;dr : no risk.

That’s not the tldr I got from that. They can fuck you if it drops is what it says

that's why I love bitfinex

yes

>in theory, it could happen
>no risk

Counterparty risk

>but in theory, it could happen.

yup no risk at all crash will never happen, we're good guys

>we have algorithms in place

They are talking about a theorytical instant (and I don't mean fast, I mean instant) significant drop in price from a single trade.
That could only happen if nearly all the limit buy order were cancelled at the same moment a sell market order is placed, making an incredible drop in price from a single trade (thus can't be slowed), any other form of drop in price like a multi billions market sell order will be slowed by their algorithms.

>For those who are mathematically illiterate
all of Veeky Forums

Is there any catch?

The catch is that most people think BTC will grow faster than 0.75% per day (x15 yearly), and thus agree to take loans with such retarded rates to buy BTC.
If they are right you would be better off just buying BTC, if they are wrong you will have better gains than them.
In any case you can't lose, just gain "only x15".

and if it doesnt grow they get JUSTd and wont pay you.
So BTC goes up, you gain less than buying it
BTC goes down, you are JUSTd

PONZI SCHEME LEVEL GAINS
ABORT ABORT ABORT FENIX EXIT SCAM INCOMING

BitFinex exit scams or gets shut down because of shady Tether practices and you lose your USD.

What's the best hedge against the possibility of bitfinex getting shut down? Short BTC on another exchange? Assuming that BTC will not actually grow by 15x per year.

I'll never forget the time in summer during the BCH fork, I lent BTC to people on polo for 5% interest per day. He even kept the loan open for 13 days, so I almost doubled my BTC with that loan

So are they basically operating as a bank?

15 x my money a year for not doing anything? How do I sign up.

That can't happen, and never happend, margin traders get liquidated way before their wallet value drop bellow what they owe.

welcome to crypto

I never put too much attention in funding untill today, when I saw I owed $50 in fuding cost for a 0.5BTC margin long for 12H.
I'm really considering going all in $ right now, this is so much less riskier, even if the crypto bublle pop I'm protected.

Yeah I mean it's risky, people borrow the currency to short it, so if interest rates are high, you are essentially betting against the mainstream who believes the thing is going down.
If BCH would have surpassed BTC at start I would have been stuck with worthless bags locked away for up to 60 days.

At this point in time, 15 x 20000 USD is $300,000...

Is bitcoin likely to go to 400k in 1 year?

Yeah but in the case of $, the chance it becomes worthless overnight is minimal, yet the ROI right now is insane.

What's the risk? In what scenario do I not get my money back?

read and Basically no risk except for some absolutely ridiculous scenario.
No lender ever lost a single cent in their entire history.

More like x14, but can you actually reinvest each days profit? Do you get paid out daily? Or at the end of the loan?

the main risk is a flash crash, how automated is cryptotrading?

You can protect yourself from a flash crash by placing a very low bid.

you get paid daily, you can use the money as soon as you get it, there is even an autorenew feature, to lend at the same rates the interests and/or any returned fund (provided someone agree to take the funds at this rate).

No flash crash are not a risk, they happen monthly in crypto, and no lenders ever lost a cent over them.

you will get nonredeemable, worthless tethers

Free scaling daily money

>making business with bitfinex
the absolute state of Veeky Forums

Lmfao

But I can exchange those for valuable bitcoins, no?

Yeah in this case, it's just a bet that btc will go up less than what you would make by lending, but sure, it is better than letting the money sit in your bank account and a safe way of making gains, but those awesome rates only appear when many people are longing btc on margin, so if the market turns to bear you would get 0.001% rates again.

He's just fudding, you can cash out or buy crypto.

Too bad the sites been getting DDOS'd out the ass and is down all the time.

Who the fuck DDOS's a bitcoin exchange? Go after someone important, like Drumpfs twitter account.

My oh my. Glad I could fund something and make someone happy. heh
Now bow down before the one who made this all possible. Your real King.

kek theyre doing everything the bankers are doing before the great depression

Nah, I'm shocked by nothing anymore, if it involves crypto, and even less so, if tehter is in the picture.
The whole thing is just operating based on another reality or something.

Fuck It I went all in $ and lended at 0.75%/day, should net me about 250$/day.
If BTC is below 21800$ at EOY, my investment would have been more profitable.
In any case I have a bad feeling about those crazy margin long positions funding rates. People are going to get burn soon, they must be.

Sure sounds like picrelated in here

Look at the shanghai stock index from december 20th 2015 to january 7th 2016
[Spoiler]their algorithm couldnt stop it [/Spoiler]

Because there aren't any in stocks retard, do you really think 8% drop in price in a day is something rare in crypto ? there has been flash crash of 80+% in less than 30 sec, yet not a single lender ever lost a single cent.

Yup. A lot of the reason BTC's price has been propped up/keeps jumping up when it's looking ready to go down is because of miscalculated shorts getting forced off and forcing the shorters to buy a bunch of BTC when they expected it to go down. This creates a short squeeze that pumps the price up.

We're a week or two away from the biggest long squeeze we've ever witnessed. The price will drop like a rock once the longs start getting pushed off their positions.

>digits

wew lad

tl;dr
> if markets drop heavily and the guy you lend to goes broke, your stuck with a loss since we have no reserves to pay you back with (we have reserves, but won't pay shit unless were dragged into court)

also forgot to mention
> lending period = 30 days
ie if you dont think there will be a gigantic crash over that period than you'd gain 1.007496^30 = ~ 25.11% return over the month

>New account registration is suspended at this time

It's not fair

hello, brainlet here. How exactly does this lending work?

Say I lend 2k in bitfinex.

Do I around 1% of the principal ($20) everyday until the loan is paid off?

Thank you

>Do I *get*

yes, if the trader return the funds before a full day, you still get interests calculated hourly.

cappo, will resurface in two weeks to laugh

Sucks being a burger

How has nobody mentioned that the reason there rates are higher than anywhere else is because no burgers are allowed on the site

If you bought enough of something to equal your current monetary value, I'm pretty sure you wouldn't. I mean like if you had a value equal to $10457 and you bought 10457 Xcoins or monkeys before it rose back up to 1$.