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/biz/ - Business & Finance

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19416275 No.19416275 [Reply] [Original]

Let’s say I’m a whale with $10 million dollars.

I go onto Bitmex and short ETH for $1 million contracts. On average, I get about 0.05% in funding interest every 8 hours. That’s about 500 dollars.

The funding rate is about 90-95% of the time in favour of shorts but just to make things simple, we’ll say 100% of the time it’s in favour of shorts.

30 days, 24 hours a day, with funding every 8 hours. That’s 90 funding rebates a month of about $500, or $45000 a month. Or about $540k a year.

If I’m rich enough to never get liquidated because I have $10 million backing my position, what is stopping me from holding onto this short in perpetuity?

>> No.19416334
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19416334

>>19416275
Nothing, that's how market making is profitable lol.

Just have to keep in mind that if bitcoin goes to 100k How much of that 10 mill will need to service that short position? It would take 20 years for that funding to pay back that 10 mil. not counting inflation. Holding a position for funding is a bit sketchy especially when you could have made much more just going long.

>> No.19416367

>>19416275
Short rates flip constantly and change in reward, and you can be liquidated as a short, no matter how large your backing is. 10M usd to make 540K a year is only 5.4% a year, that is trash.

You are dumb and your idea is dumb

>> No.19416402

@19416367
this retard really thinks gains you make with a $1k portfolio scales to a $10m portfolio

>> No.19416427

>>19416402
The idea is fundamentally flawed in more ways than I even care to explain. It is so mediocre it is painful. This is the type of financial intellectual you are dealing with on biz

>> No.19416442

@19416427
>dude funding flips ALL THE TIME
Show me the data.

>dude you can get LIQUIDATED DUDE
yeah if ETH hits 100k

>dude 5.4% DUDE THAT SUCKS my shitcoin did 100k% DUUUUUDE

neck yourself

>> No.19416555

>>19416442
Here you go dipshit.

https://www.bitmex.com/app/fundingHistory

Yeah, you still can get liquidated, pennies infront of a train.

With 10M you have access to high level funds that average returns over 8-9%+ for the past 20 years.

Also you are holding essentially 10M in BTC on bitmex, another collapse point. Not to mention the counterparty risk of holding millions on an offshore unregulated exchange.

Your idea is fucking trash, and you cope by calling me a shitcoiner, my crypto portfolio is 98% BTC. I’m not a dumbass like you.

>> No.19416563

>>19416442
wtf is this @ shit

>> No.19416667

exposing yourself to the risk of bitmex going under, let alone the price risk of ETH, with this retarded strategy for 6% per year is definitely not worth it.

A plain vanilla boomer portfolio (60 equity/40 fixed income) should easily yield 5%+ in the long term without such concentrated risk.