/biz/ - Business & Finance

filling their spot bags

>>51429423
What do you mean? Dumb it down even further for me? Maybe an example

>>51429406
Okay, maybe I can explain it to you.
A is Sam and you are B. A wants more money. A also has a big nose. B is an average joe with greed and dreams.

Do you know the next step or we can stop here?

>>51429454
FTX needs to own certain amount of actual BTC to fulfil BTC withdrawals (you sending BTC to your own wallet)
Once enough leverage is used on their platform it becomes profitable for FTX to dump/pump the price and collect collateral from all the liquidated leveraged traders.

>be FTX
>have $500 mil in spot BTC
>wait for low liquidity
>oy vey if we dump price 10% we can liquidate $100 mil worth of BTC from our users
>oy vey it's only gonna cost us $40 mil
>oy vey it's literally free money
>dump $40 mil worth of BTC
>collect $100 mil worth of btc from your own users
>collect another $300 mil from leveraged positions you placed on other exchanges

>>51429406
It's nonsensical twitter baboonery; people who perpetuate this myth are either (i) non-traders (ii) bad actors (iii) schizos

>>51429612
further to this, with regards to motivation, they dont give a shit about the long term viability of their operation and want to bleed as many would-be wealth seekers of their coins and thus their motivation to continue their interest in the markets.
its a pump and dump.

>>51429406
>when we get liquidated our margin is used to market buy/sell the asset we're trading
A cefi exchange rarely goes out to market and actually execute what you clicked on, unless you're doing a large otc trade. You think you're going long eth/usdc, but in the background they're not necessarily opening that position. They just show you the theoretical p/l and once you close it, they pay you whatever usdc you might have won, or take whatever usdc you may have lost on the trade.

>>51429454
>Maybe an example
ok
>Deposit 1000 usdc on a cefi exchange
>Open a long ETH/USDC position, worth 2000 usdc at 10x leverage (using/risking 200 usdc worth of margin)
>The exchange in this case doesn't *necessarily* execute the trade. They don't *actually* take out 2000 usdc out of their treasury and "lend" it to you, buy eth with it and then take 200 usdc as collateral. No. They just show you a screen that says they did, and now you see an open position with a p/l and all that. In most cases they'll honor whatever happens with that trade (which is what most traders care about in the first place) but there's no guarantee that they actually executed it.
>If you win, they have to take usdc out of their treasury to pay out your "virtual" profits (by virtual, I mean those profits never actually happened in the market). If you get liquidated, they just take 200 usdc out of your account and put it in their treasury, which keeps growing because -on average- traders lose.

>>51429406
you do understand that the big names at FTX are traders themselves, right? keep thinking

>>51429454
>>51429697
>>51429612
also its worth remembering that when alameda research (ceo sam bankman-fried) manipulate the markets in the low volume periods (weekends + the midweek gaps between the US and asian trading hours) they arent necessarily moving the prices using real bitcoin.
they use wbtc and usdt to push and pull the price around, farming your real bitcoins pumped into the exchanges

>>51429679
This. At least Arthur Hayes was honest about it. Seeing people like SBF and CZ act like they're doing their users a favor is revolting

>>51429612
>>51429697
Are you both implying that when you get liquidated your position isn't automated to buy/sell market close the position and that infact your margin goes straight into the exchanges treasury?

People are such cattle when it gets to leverage in general, that I almost always here even by supposed "experts" that 1X is identical to spot.

Wait till you learn 1X leverage is gigantically more risky than spot.

People are such cattle when it gets to leverage in general, that I almost always hear even by supposed "experts" that 1X is identical to spot.

Wait till you learn 1X leverage is gigantically more risky than spot.

>>51429406
>I've never understand that narrative of exchanges like FTX wanting to liquidate our positions.

SBF is jewish and you are goyim. That's it.

>>51429528

>>51429406
do you think he became a billionaire by being honest?

>>51429787
it's so diabolical. interesting.

>>51429406
Because they actively manage their own positions and trade against their customers

i literally never use anything other than ByBit. all the professional traders use that shit
>great UI
>intuitive
>great customer service
i tried it just once to buy BitDAO tokens and ive been using it ever since

Binance is mid at best
CoinBase expensive as fuck
and FTX is just autistic