Bitfinex, the Italian network behind the boss that makes Bitcoin tremble

Re:Bitfinex, the Italian network behind the boss that makes ... by arcticbull on Thursday February 18, 2021 @03:59AM (#26177555)

I'm referring to a real SEC regulated broker like InteractiveBrokers which allows you to buy and sell /BTCG1 futures. The price of the /BTCG1 future is calculated based on a blended average of the spot price at a bunch of other exchanges (the "Bitcoin Reference Rate" or, humorously, BRR).

The current maintenance margin for a /BTCG1 contract is 40%. You're required to have enough margin to cover 40% of the notional value of the contract which is 5 BTC, roughly $100,000.

Let's say you only have $200,000 of margin. A parabolic move towards infinity in the BRR due to insolvency in some of the exchanges involved in the calculation may double or triple the price of BTC. Further, the high volatility may increase the margin requirements beyond 40% and up towards 100%. This means you're going to get a margin call, and you either post collateral or get rekked.

Not sure how FTX works.

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Re:Bitfinex, the Italian network behind the boss that makes ... by anonymoushn on Thursday February 18, 2021 @05:20AM (#26178141)

Sure, that's shorting BTC in an attempt to short Tether. I agree this is a terrible idea.

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