We might increase leverage in the future if we see our swap market is cooling off a little.
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.
I hope this helps.
Have a good day
Giancarlo
Bitfinex Team
For the time being we believe it's a good idea, for the sake of traders, liquidity providers and the bitcoin market to slow down a little the growth of our swap total market.
I hope this helps.
Have a good day
Giancarlo
Bitfinex Team
"Earlier today, Mt. Gox halted trading, saying the market needed to "cool down""
I knew i heard that phrase somewhere else before...
Hehe, I don't know about the validity of that analogy, but this is a pretty clear acknowledgement by Bitfinex that swaps/leverage have gotten out of hand vs. liquidity.
"cool down" is a very common phrase... bitfinex is guaranteeing the lender's principal, AND it schedules the margin calls. In other words, bitfinex can choose to not execute a forced sale if it wants. So clearly they aren't going to do margin calls so fast that they flash crash to the point where principal is lost because that will be suicide. Its therefore unlikely we'll get a deep flash crash on bitfinex alone... but a flash crash (or even something smaller than a crash) on other exchanges could trigger a big flash crash on bitfinex.
You used to be able to choose "insured" or "uninsured" swaps. They sent an announcement around a month or so ago increasing their take and saying that they will all be "insured" now. You are right, what exactly that means is perhaps unclear.
@Coinfan: I and I'd expect that you don't really know how automatic vs manual it is. However, its not all or nothing... you could do an automatic call until BTC price drops X%, then pause... the human could configure how fast the margin calls are executed... etc.