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Offline bitmeat

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1. DOWN - CORRECTION

First, everybody and their mom got all too excited and shorted the heck out of BitUSD chasing that $1/BTSX dream all too soon.

Right now BitUSD is at a big discount - incentive to buy.
All of that happened at the same time, so right now around 31BTSX/BitUSD there is a margin call frenzy waiting to happen. Once it happens, it should generate a huge short squeeze, effectively correcting BitUSD to where it needs to be.

2. Then up we go...

If BTSX starts getting embedded even in small time businesses, it can not be too low.

With a limited supply of BTSX, imagine $10M trying to convert USD -> BTC -> BTSX -> BitUSD. Do you know the crazy amount of margin people would have to put to short 10M BitUSD?

Furthermore this will drive the price of BTSX up. Ideally we want a gateway USD <-> BitUSD, otherwise people won't like the fact that by the time it gets through the 4 steps they have run up the price of BitUSD.

I suppose they could do USD -> BTC -> BitUSD on something like BTER. That's a bit better.

Still though, the margin required for that kinds of BitUSD is insane.

At 20 BTSX/USD that means even if EVERY SINGLE holder of BTSX shorted BitUSD, you could only create $100M BitUSD. And not to mention that's just one assest.

Take a look at this http://www.myfxbook.com/community/outlook

Look at the stats at the bottom. This is just FOREX traders who actually decided to register with this site their real accounts.

Avg. Deposit :   $77,973.88
Avg. Account Profit :   $27,688.4
Avg. Account Loss :   -$5,576.42
Total Funds :   $2,034,338,424.34

That's $2B from just FOREX traders, who don't even know if their MetaTrader brokers are fair to them or not (software is designed to actually screw them over)

Imagine $2B trying to trade within BTSX. The cost of BTSX just to handle the deposits would need to be close to $10/BTSX !!!

And to reiterate that's just FOREX. Stocks/bonds/futures/options.

----

Now, I still think we will see a BTSX sell off and BitUSD run up short squeeze simply because folks clustered their margin call at the same spot around 30-31 BTSX/BitUSD.

Disclaimer: Just my opinion... no idea what will actually happen, but will watch with great interest.
« Last Edit: August 27, 2014, 04:32:13 AM by bitmeat »

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $0.10
« Reply #1 on: August 27, 2014, 04:31:45 AM »
By the way 31 BTSX/BitUSD is equivalent to BTSX/BTC of 0.000063. So we are kinda there already. It is interesting to see how BitUSD reacts to the extreme spikes. So far it's been mostly stable.

Offline luckybit

Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #2 on: August 27, 2014, 04:36:39 AM »
1. DOWN - CORRECTION

First, everybody and their mom got all too excited and shorted the heck out of BitUSD chasing that $1/BTSX dream all too soon.

Right now BitUSD is at a big discount - incentive to buy.
All of that happened at the same time, so right now around 31BTSX/BitUSD there is a margin call frenzy waiting to happen. Once it happens, it should generate a huge short squeeze, effectively correcting BitUSD to where it needs to be.

2. Then up we go...

If BTSX starts getting embedded even in small time businesses, it can not be too low.

With a limited supply of BTSX, imagine $10M trying to convert USD -> BTC -> BTSX -> BitUSD. Do you know the crazy amount of margin people would have to put to short 10M BitUSD?

Furthermore this will drive the price of BTSX up. Ideally we want a gateway USD <-> BitUSD, otherwise people won't like the fact that by the time it gets through the 4 steps they have run up the price of BitUSD.

I suppose they could do USD -> BTC -> BitUSD on something like BTER. That's a bit better.

Still though, the margin required for that kinds of BitUSD is insane.

At 20 BTSX/USD that means even if EVERY SINGLE holder of BTSX shorted BitUSD, you could only create $100M BitUSD. And not to mention that's just one assest.

Take a look at this http://www.myfxbook.com/community/outlook

Look at the stats at the bottom. This is just FOREX traders who actually decided to register with this site their real accounts.

Avg. Deposit :   $77,973.88
Avg. Account Profit :   $27,688.4
Avg. Account Loss :   -$5,576.42
Total Funds :   $2,034,338,424.34

That's $2B from just FOREX traders, who don't even know if their MetaTrader brokers are fair to them or not (software is designed to actually screw them over)

Imagine $2B trying to trade within BTSX. The cost of BTSX just to handle the deposits would need to be close to $10/BTSX !!!

And to reiterate that's just FOREX. Stocks/bonds/futures/options.

----

Now, I still think we will see a BTSX sell off and BitUSD run up short squeeze simply because folks clustered their margin call at the same spot around 30-31 BTSX/BitUSD.

Disclaimer: Just my opinion... no idea what will actually happen, but will watch with great interest.

If people do that I guess buy as much BitUSD as you can.
I'm skeptical it will get that low if BitBTC comes online but who knows.

The best gateways at this time are the regulated exchanges. Contact the exchanges and get them to accept BitUSD as the main USD for transactions on their network.
« Last Edit: August 27, 2014, 04:38:26 AM by luckybit »
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #3 on: August 27, 2014, 04:44:41 AM »
Well think of it this way - there are easy BTSX to be made if it gets to 31 BitUSD/BTSX. It's like stop hunting, except for people know where the stops are clustered.

Of course nobody can predict the market with 100% certainty, but this one seems like a no brainer to me...

The second scenario I expect will take a lot longer to materialize, and it may not even be BTSX when it happens, so upside potential is not withou risk, but at the moment BTSX is well positioned to deliver on it.

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #4 on: August 27, 2014, 07:16:14 AM »
Woo-hoo! It appears market is $35K BitUSD away from all hell breaking loose (well not really, but at least some short squeeze action should occur there).

Looks like those who want to have fun with the market can buy BitUSD until 32 then shorting it at a better price...


Offline bitwiz

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Re: Here is why I think BTSX will go down to $0.025 and then up above $0.10
« Reply #5 on: August 27, 2014, 07:23:58 AM »
By the way 31 BTSX/BitUSD is equivalent to BTSX/BTC of 0.000063. So we are kinda there already. It is interesting to see how BitUSD reacts to the extreme spikes. So far it's been mostly stable.

How do you get that equivalent number?
wallet_approve_delegate delegate.bitwiz
BTSX: bitwiz    | BTC: 1LW55JXXaZ9V2xjHaBvsXJ5WYv76LRnF2p
I'm running a PTS seed node on the cloud, get a 10$ bonus using this referral

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #6 on: August 27, 2014, 07:27:45 AM »
BTC/USD   521
BTSX/BTC   0.000062
BTSX/USD   0.032302
BitUSD/BTSX   30.95783543

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #7 on: August 27, 2014, 07:35:51 AM »
BTSX/BTSX is selling at 0.000065 on BTER, which means

BTC/USD   522
BTSX/BTC   0.000065
BTSX/USD   0.03393
BitUSD/BTSX   29.47244327

The real value for BitUSD should be 29.47. However it is currently sold at 27 BTSX. That's about 10% spread. Not terrible, but should improve once people start doing arbitration.

Offline profitofthegods

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #8 on: August 27, 2014, 04:16:26 PM »
There is no incentive to buy BitUSD. If you think the price of BTSX is going to go down you are better off selling into BTC or real USD.

Here is what I think will happen:

People are using shorts to bet big that BTSX will go up in price. They are idiots, because by doing so they are breaking the market peg (or at least making it very innacurate). As a result of this the price of BTSX will innevitably go down, because it appears to outside observers that it isn't working very well, and BitAssets are pretty much the whole story in terms of getting new people interested at in Bitshares at the moment. The shorts will eventually get that the price of BTSX is in decline, or the system will force their hand with margin calls. BitUSD will reach parity with USD, and stupid bulls will take this as a reason to bet big again and break it again.

This will keep happening over and over, and the price of BTSX will keep going down, until all the stupid people have lost all their money. That could take a very long time.


Ggozzo

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #9 on: August 27, 2014, 04:37:08 PM »
I somewhat agree. I bought a bunch of bitUSD and could not get out of it at current outside exchange prices.

If it continues as it is, there is no incentive to use bitUSD, because 1. you can't get a true dollars worth of BTSX for the bitUSD and 2. The number of transfers and fees with converting to fiat.

The only reason I am disappointed is because I bought bitUSD at a slight premium 2 nights ago and tried to sell them for a profit and could not because the market was discounting. I should've had a 30% profit but only realized about 20% of it because of the market skew. Had I sent the BTSX to BTer 2 nights ago and sold at the same time, I would gave realized all 30%.

I do think if there were more hedging and arbitrage opportunities, the stubbornness of these bitUSD shorters will go away. At that point they would be giving away cheap bitUSD that could be leveraged elsewhere on the exchange.

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #10 on: August 28, 2014, 12:24:45 PM »
Yes, it's early days. Not sure if it tracks USD well at the moment, but looks like liquidity has improved.

Offline CLains

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #11 on: August 28, 2014, 02:07:20 PM »
Super confused:I am more interested in price stability than USD per se. I want "risk-free" funds, and the higher the interest the better. What is the interest rate of bitUSD perfectly tracking the dollar in BitShares X? We don't know!

But if we let the market decide interest rate of bitUSD it will likely change continually.. If it changes continually, what happens to the holders of bitUSD? Could they get the interest rate established by the market? If not, what do we do with the endless variety of bitUSDs that have different interest rates?

Offline bodenliu

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #12 on: August 28, 2014, 02:19:15 PM »
There is no incentive to buy BitUSD. If you think the price of BTSX is going to go down you are better off selling into BTC or real USD.

Here is what I think will happen:

People are using shorts to bet big that BTSX will go up in price. They are idiots, because by doing so they are breaking the market peg (or at least making it very innacurate). As a result of this the price of BTSX will innevitably go down, because it appears to outside observers that it isn't working very well, and BitAssets are pretty much the whole story in terms of getting new people interested at in Bitshares at the moment. The shorts will eventually get that the price of BTSX is in decline, or the system will force their hand with margin calls. BitUSD will reach parity with USD, and stupid bulls will take this as a reason to bet big again and break it again.

This will keep happening over and over, and the price of BTSX will keep going down, until all the stupid people have lost all their money. That could take a very long time.

damn right

Offline bitmeat

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #13 on: August 29, 2014, 04:37:20 AM »
And there it is! :) Boom goes the dynamite. :)

Offline Maximus0352

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Re: Here is why I think BTSX will go down to $0.025 and then up above $1.00
« Reply #14 on: August 29, 2014, 05:09:55 AM »
And there it is! :) Boom goes the dynamite. :)

You sir, are Nostradamus. +5% When do you think the market will pick up after this margin call?

 

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