Perhaps you are looking for something more sinister here, but from that graph it seems to me that the likeliest explanation of the ballooning swaps on Finex is simply that they have gained a lot of users since December. I don't know for how long they have existed but I didn't actually try trading there until last winter, as part of me moving away from MtGox, and I suspect that may be true for a lot of other users as well. I think you would find that everything from Kraken to Huobi gained a lot of users during that time period.
I disagree that USD swaps balloons more than BTC swaps in general in your graph. If you cut out June the trend is not nearly as pronounced. In fact, both swap pairs follow an upwards trajectory with two major exceptions: people were in general very bearish in February (omg! look at those slopes!), and people are very bullish in June. You can also see the formation of a bullish trend in January which later falls apart spectacularly, and I think we all know why that was.
The BTC swaps are only one piece of evidence for what I believe to be the fact that Bitfinex hasn't grown by a factor of 9 since December. Here's something much better: http://data.bitcoinity.org/markets/volume/6m/USD?c=e&t=a&volume_unit=btc I would say it grew by a factor of 2-3, a moving average would visualize this better.I disagree that USD swaps balloons more than BTC swaps in general in your graph. If you cut out June the trend is not nearly as pronounced. In fact, both swap pairs follow an upwards trajectory with two major exceptions: people were in general very bearish in February (omg! look at those slopes!), and people are very bullish in June. You can also see the formation of a bullish trend in January which later falls apart spectacularly, and I think we all know why that was.
Hey,
I didnt want to participate in the discussion as I love reading analysis of economic metrics and don't have necessarily anything useful to add, but maybe want to correct some points.
You are right that the increase in USD swap is not necessarily reflecting an increase our active users. Actually, the distribution of long positions size is VERY variable (ie a lot of small positions, a few big positions, classical 80%-20% something).
However I do not think the trading volume is also a very good indicator, for the same reason, and also the fact that volume also depends on volatility.
As for will it end badly I don't think so. Our users are mostly bitcoiners, they are really long and ready to pay a high rate for this, especially because of some "information" circulating about the bubble spiking again for the 24th of July. But if you note, the spike of margin rates is getting lower over time than what it used to be, to a point where it is imho sustainable (less than 100% a year is not unreasonable for bitcoin)
Finally we have taken some steps in order to prevent flash crashes like february. Of course we cannot make bids appear magically, but the worse that could happen is a price significantly depressed on bitfinex compared to other exchanges, until arbitrage made its magic. I want to believe the orderbooks of exchanges do not reflect all the money there is to make the price, the price itself is a signal upon which actors act to buy and sell, send USD or BTC to exchanges,...
Well, an interesting topic, questions we did certainly discuss internally believe me
Raphael