/biz/ - Business & Finance

>>7186384

Except that when the price falls you have to deposit more bitcoin to cover the margin call.

Pretty soon, a few things happen....

1. Those who make poor decisions are margined out as they can no longer afford the bitcoin.

2. When the bitcoin price starts to collapse, they realize that having margin tied to bitcoin instead of dollars was a fatal mistake. Since the "value" of bitcoin would no longer cover the alleged "value" of the total other coins, the entire exchange collapses due to under-capitalism.

Read up on wildcat banks.

I wonder how many of you crypto junkies have ever heard of the wildcat bank boom of the 1800's; why they came about, why they failed, and what it means for all your coins.