How Bitfinex will handle a hardfork with respect to Margin Trading and Funding
New post on Bitfinex regarding the handling of Margin positions and Funding in the event of a Bitcoin hardfork: Due to the complexities surrounding a potential Bitcoin hardfork event, we would like to communicate Bitfinex’s plan for handling the accounting of margin positions and borrowed funding. We must, once again, strongly urge the Bitcoin mining community to avoid such an event, if at all possible. The knock-down effects on Bitcoin exchanges and their customers could be severe, causing substantial price fluctuations, inefficient price discovery, and needless customer losses. In the event of a hardfork that results in a chain split, Bitfinex and other major exchanges—such as Poloniex, Kraken, and GDAX—are faced with the challenge of resolving complex accounting issues in margin trading. Ideally, each exchange would agree to a uniform and coherent methodology; however, each serves different audiences and have different market structures, making a universal solution unworkable. For example, Bitfinex has decided to take a different approach than the one proffered by Poloniex. While we understand Poloniex’s approach may make sense for their business, it is not an approach that ultimately satisfies our operational requirements at Bitfinex. After much analysis, we have chosen to handle the accounting of margin trading and funding based on the model of how stock spinoffs, dividends, and distributions are handled in equity markets. Specifically, in the case of a hardfork event, lenders will receive both BTC and BTU. Anyone that is short BTC/USD or long any BTC trading pair (ETH/BTC, LTC/BTC, etc.) will owe BTU to the lender, effectively making the user short BTU. An exception is in the case that BTC is borrowed but not in use as margin collateral, in which case BTU accrues to the lender. Users that are margin long BTC/USD or short any BTC trading pair will receive BTU. This methodology is complex and operationally challenging, but we believe it to be the most economically correct and fair approach for Bitfinex and our customers. Furthermore, we believe it is the only approach that will keep the BTC lending market functioning through a hardfork event. Imagine a hypothetical situation where lenders do not receive BTU. They will simply stop lending if a hardfork appears imminent. And while Bitfinex has, rarely, stepped in to become a lender of last resort, in such a dramatic situation Bitfinex would be unable to—and would not want to—cover demand. Consequently, lending liquidity would completely disappear and Bitfinex would be obliged to begin partial liquidations of margin positions using borrowed BTC that could no longer be renewed. We believe that such a hypothetical outcome should be avoided at all costs. Our plan should prevent the negative consequences of this hypothetical and seems likely to allow the funding market to continue to operate. While our proposed methodology will ensure a functioning lending market for BTC, borrowers must understand that while their P&Ls may climb during a hardfork event, they will have offsetting BTU liabilities that will be applied to their accounts, but perhaps not immediately. At the moment Bitfinex detects a BTU block that is incompatible with the BTC chain, we will immediately halt the processing of all BTC deposits and withdrawals for all users, and freeze all movements for all currencies for any borrower of BTC. This freeze will last until the BTU accounting can be adequately prepared and addressed. BTC borrowers can hedge or estimate this liability with newly listed Chain Split Tokens (CSTs). We wish to state clearly and publicly that the scope of any disruption associated with a potential hardfork is in the hands of the Bitcoin Unlimited developers. We request that the Bitcoin Unlimited developers implement strong two-way replay protection and wipeout protection so that, if a hardfork event occurs, we can quickly list BTU and resolve accounting issues for customers with BTU liabilities. More details on the specific procedures will be forthcoming, but we feel that it is important to address the economic implications as soon as possible so that our customers can plan accordingly.
Lost seven fig a day with margin trading in BCH at Bitfinex
I got liquidated for almost seven figures last night due to BCH position which rekt my account. Why is flash crashes happening so frequently on Bitfinex while other exchanges are okay? Almost everyone with a good margin on alt coins got wiped out last night. The amount of flash crashes happening on Bitfinex are much higher as compared to other exchanges! If this flash crash is so frequent and it almost guarantees a wipeout perhaps you need to do something about this? Also, Coinbase was showing the price of BCH as ZERO last night. How do we survive from such technical problems of exchanges?
I have a problem with my margin trading on bitfinex. Can someone please help?
Hey, how are you guys? Thanks for taking the time to read this, I don't mean to bother. I really tried to google this before contacting you guys. I having problem with a position that I sold. I sold Monero at 345$ and instead of converting back to USD, it created a new margin position but with a red square next to the pair (XRM/USD). Now that position claim its up 500$ but that doesn't make sense because I sold it. I can't claim it (it shows an error sign) and I don't know what would happen if I close the position. Please let me know what should I do? Thanks,
Hi there, I'm not sure this is the right place but as there are many users using this Exchange to trade and also have to report their gains for taxes, I thought it could be ok to post it. Otherwise, just bad luck for me, I'll try to get answers somewhere else :) Question is simple: I used Bitfinex for around a year and used Margin trading a lot. The issue is that if I export the trades list from my history it just shows the actual buy/sell and fees. But with margin trading and the multiple wallet system, there is more happening. Especially the settlements. I have multiple thousand of trades, mostly on BTC but that doesn't matter. If I opened a long and sold at loss (let say a loss of $500) then this -500 is removed automatically from my wallet, this isn't a trade, it's like just removed by Bitfinex. Also the margin fees (borrowing fees) can get quite high over time and they do not appear (correct me if I'm wrong of course) in the trade list. Let say I have a long opened for 5 days with ~$2 margin fees per day. Those will be also removed from my wallet in the ledger. So, is there anyone here who managed to do it in a "simple" way? I wanted to use Cointracking but they admitted to me via email that they can't manage Bitfinex margin trades because on how Bitfinex works (via API or CSV it doesn't matter, they just can't deal with it) I know that in the ledger of each coin and USD, there are all details, but it's just a big mess to sort out. So yeah, if anyone found out a simple way to export the data to calculate those gain and losses, I'll take it Thanks
Bitfinex strives to achieve it by providing our users with state-of-the-art trading tools, innovative technology and unparalleled levels of customer service. «Bitcoin security breaches raise questions about digital currency’s future». Archived from the original on May 28, 2017 – via Christian Science Monitor. Bitfinex allows users to trade with up to 5x leverage by receiving funding from the peer to peer margin funding platform. Users can enter an order to borrow the desired amount of funding at the rate and duration of their choice, or they can simply open a position and Bitfinex will take out funding for them at the best available rate at that time. Margin trading. Bitfinex allows up to 5x leverage trading by providing traders with access to the peer-to-peer funding market. Order types. Bitfinex facilitates a graphical trading experience with advanced charting functionality that allows traders to visualise orders, positions and price alerts, tap to modify order properties, and annotate Our margin funding feature goes hand in hand with margin trading. If you are not a trader and prefer safer investments, this feature is for you. Through your Funding Wallet, Bitfinex allows you to provide funding in any of our various funding currencies to traders.You can enter offers with your own chosen terms (return rate, duration, and amount). The largest and most advanced cryptocurrencies exchange
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