Is it better to do Margin trading in fiat or btc? You can do both right?
If you hold 1 BTC, you can sell that one and another one, so you gain the difference of 1 BTC movement on the way down.
If you hold 1 BTC worth of USD, you can sell 3 BTC, so you gain 3x BTC movement on the way down.
Do not ask me why it is done this way on bitfinex. But you see how holding BTC in bear markets is a bad idea.
I thought they changed that a while ago, so that if you go short against a deposit of BTC or long against a deposit of USD you "borrow" (without any fees) from your own funds before you take any swap. I remember an announcement saying that they'd realised that the way it was set up you effectively got more leverage by holding your deposit in the same currency as you were borrowing, and that the change had evened it out so that it didn't matter which one you started out holding.