Author Topic: Situation report : The shortage of BitCNY begins  (Read 10613 times)

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Offline btswildpig

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Thanks to BitCNY  now there is more volume on BitShares Asset Exchange than on all other centralized exchanges combined for BTS pairs.

http://coinmarketcap.com/currencies/bitshares-x/#markets

I think it's a self short to extent his previous short position , not organic trading . 
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Offline pc

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Speaking of interest - why are shorters offering interest in this market? They are effectively encouraging USD/CNY holders to continue holding, increasing their problem of not being able to cover.

I agree to an extent but I'm shorting with a tiny interest in this market so my shorts are competitive with other shorts so I can lock in at a certain price.

I'm tempted to translate this as "because I don't really know how shorts work"... :-/

The interest is only relevant for shorts trading at the feed price. If you want to lock in at a better (for you) price, the interest is irrelevant.
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Offline vlight

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Thanks to BitCNY  now there is more volume on BitShares Asset Exchange than on all other centralized exchanges combined for BTS pairs.

http://coinmarketcap.com/currencies/bitshares-x/#markets

Offline yellowecho

Speaking of interest - why are shorters offering interest in this market? They are effectively encouraging USD/CNY holders to continue holding, increasing their problem of not being able to cover.

I agree to an extent but I'm shorting with a tiny interest in this market so my shorts are competitive with other shorts so I can lock in at a certain price. 
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Offline pc

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In a bear market it is better for you if you don't short, even if that means buying at a higher than average price.

i would think it would be better to short to myself a portion of my BTS and get interest for bit bitCNY. This would be a solution.

In a bear market the interest earned will probably not outweigh the loss in value from staying long in BTS.

Speaking of interest - why are shorters offering interest in this market? They are effectively encouraging USD/CNY holders to continue holding, increasing their problem of not being able to cover.
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Offline sudo

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bitshares play(dac play )  fund  has  300k bitCNY  right?

Offline alt

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it can help if more people short CNY,USD,GOLD .....
when you need BITCNY, and you don't want to lose your BTS, you can sell BTS to get BITCNY, and buy the same BTS at BTC38

Offline starspirit

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If someone needs CNY he or she should short to himself. Ok, it is expensive to do it, but this is the system. This would also help to stabilize the prices, because someone would use BTS to short bitCNY into existence.

You would be market neutral so it would be the same as you are holding BTS, but i agree you would need to have more BTS then a couple of weeks before.

Which means these people need to buy BTS. ;)
Which is how the system is supposed to work.  Demand for bitAssets leads indirectly to purchases on BTS in this way.
Or they use BTS they already own to self-create (given it was inferred earlier these buyers are not willing to give up their existing BTS, here's another option). Or a liquidity provider uses their existing inventory of BTS to self-create and sell the bitCNY at a premium for real CNY on the free market. (If there is truly a shortage of bitCNY, it should trade at a premium to CNY, encouraging such liquidity providers. If it does not trade at a premium in the face of a shortage, why not?).
Either of these supply sources does not require anyone to purchase more BTS.

I don't track the Chinese exchanges, but I sense that the real problem is that the "shortage" is not really large enough to tempt the liquidity providers, no? Part of the issue there is the risk that liquidity providers take on. They should never be forced to buy back above the feed price (I'm not sure if this bug has been fixed yet), and it should be as simple and risk-free as possible for them to create and destroy new units according to the demand.



Offline Ander

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If someone needs CNY he or she should short to himself. Ok, it is expensive to do it, but this is the system. This would also help to stabilize the prices, because someone would use BTS to short bitCNY into existence.

You would be market neutral so it would be the same as you are holding BTS, but i agree you would need to have more BTS then a couple of weeks before.

Which means these people need to buy BTS. ;)
Which is how the system is supposed to work.  Demand for bitAssets leads indirectly to purchases on BTS in this way.
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Offline Shentist

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If someone needs CNY he or she should short to himself. Ok, it is expensive to do it, but this is the system. This would also help to stabilize the prices, because someone would use BTS to short bitCNY into existence.

You would be market neutral so it would be the same as you are holding BTS, but i agree you would need to have more BTS then a couple of weeks before.

What someone "should" do (i. e. with the global good in mind) is not necessarily what is best for himself (i. e. in his local situation). Kind of like a prisoners' dilemma with a lot of prisoners.

In a bear market it is better for you if you don't short, even if that means buying at a higher than average price.

i would think it would be better to short to myself a portion of my BTS and get interest for bit bitCNY. This would be a solution.

But you are right, i just wanted to say - this is freemarket - and it is a tiny market, so this is natural and a good sign.

Offline pc

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If someone needs CNY he or she should short to himself. Ok, it is expensive to do it, but this is the system. This would also help to stabilize the prices, because someone would use BTS to short bitCNY into existence.

You would be market neutral so it would be the same as you are holding BTS, but i agree you would need to have more BTS then a couple of weeks before.

What someone "should" do (i. e. with the global good in mind) is not necessarily what is best for himself (i. e. in his local situation). Kind of like a prisoners' dilemma with a lot of prisoners.

In a bear market it is better for you if you don't short, even if that means buying at a higher than average price.
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Offline Shentist

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sorry to say this,

but

you are talking for "traders", who want to cover without selfshorting (because they are lacking the BTS or they want to get out without a high loss).

This is not a problem of the system, just some traders who get caught on the wrong foot.

Happens all the time on NASDAQ etc. too. So, they have to buy with bad prices, this is freemarket!

Not just that , there is high demand for BitCNY these days from non-trader too .
Bad price is for anybody , including those business and their customers who uses BitCNY  .

If someone needs CNY he or she should short to himself. Ok, it is expensive to do it, but this is the system. This would also help to stabilize the prices, because someone would use BTS to short bitCNY into existence.

You would be market neutral so it would be the same as you are holding BTS, but i agree you would need to have more BTS then a couple of weeks before.

Offline btswildpig

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sorry to say this,

but

you are talking for "traders", who want to cover without selfshorting (because they are lacking the BTS or they want to get out without a high loss).

This is not a problem of the system, just some traders who get caught on the wrong foot.

Happens all the time on NASDAQ etc. too. So, they have to buy with bad prices, this is freemarket!

Not just that , there is high demand for BitCNY these days from non-trader too .
Bad price is for anybody , including those business and their customers who uses BitCNY  .
这个是私人账号,表达的一切言论均不代表任何团队和任何人。This is my personal account , anything I said with this account will be my opinion alone and has nothing to do with any group.

Offline Shentist

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sorry to say this,

but

you are talking for "traders", who want to cover without selfshorting (because they are lacking the BTS or they want to get out without a high loss).

This is not a problem of the system, just some traders who get caught on the wrong foot.

Happens all the time on NASDAQ etc. too. So, they have to buy with bad prices, this is freemarket!

Offline btswildpig

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Demand from BitCNY comes from :
1、BitCNY can be deposit into BTC38 as CNY on a 1:1 ratio , it increases the usage of BitCNY because of the low spread  .
2、People are stockpiling BitCNY for a crowd-funding project .
3、To cover the short position .

Hm... you may be on to something there... you forgot

4. People want to get out of BTS due to its falling price, without leaving the BitShares ecosystem

The combination of 3+4 is very dangerous, because it creates a self-enforcing feedback loop that drives the BTS price into the ground.

3\ What happens if people pay fiat to buy BitCNY to cover ? Will that still creates  self-enforcing feedback loop combine with 4 ?
这个是私人账号,表达的一切言论均不代表任何团队和任何人。This is my personal account , anything I said with this account will be my opinion alone and has nothing to do with any group.