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Offline bitmeat

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Where have all the bids gone?
« on: August 27, 2014, 12:10:47 PM »

Can someone explain, how come all the purchasers of BitUSD disappeared?

Here is a theory of mine...

BitUSD has total supply of 100B. Which means BitUSD could never really be more than 50 BTSX, since supply of BTSX is 2B.

That means that any BitUSD short above 33.3333... are relatively safe. BTSX should never really hit a margin call by design (unless some spike in the system occurs).

Now go down a notch - for shorts at 22.222222... BTSX their margin call is at 33.3333.... But since 33.3333.... is like a sure short, then so is 22.222....

Wow! No wonder there are no BitUSD buyers, and BitUSD price is lower than it should be. So once BTSX rises to like $1B, BitUSD would be really stable. There is wishful thinking.
« Last Edit: August 27, 2014, 12:19:21 PM by bitmeat »

Offline cygnify

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Re: Where have all the bids gone?
« Reply #1 on: August 27, 2014, 12:36:07 PM »
There isn't a lot of bitUSD buyers also I believe as buyers don't want USD at the present time, where bitcoin is historically quite low and may increase soon as well as BTSX just had a solid correction and is probably due for a rise in price next (although that isn't certain).

Basically a buyer of USD probably doesn't want to hold onto a heap of bitUSD with low liquidity (it just opened) so limited exit points in what could be a rising market for the alternatives. This will change over time as the market matures, especially with regards to actual uses for bitUSD.
« Last Edit: August 27, 2014, 12:38:17 PM by cygnify »

Offline jae208

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Re: Where have all the bids gone?
« Reply #2 on: August 27, 2014, 12:48:47 PM »
You guys are sounding kind of scammy.
Personally, after reading your last several posts I wouldn't listen to what you have to say in the future.
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Offline bitmeat

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Re: Where have all the bids gone?
« Reply #3 on: August 27, 2014, 12:52:41 PM »
You guys are sounding kind of scammy.
Personally, after reading your last several posts I wouldn't listen to what you have to say in the future.

Umm confused, sure. Scammy?!? I'm trying to understand how all this works. I said it's a theory, and I asked for other people's opinion. It just puzzles me that there are no bids.

Do you have a better theory?

Offline jae208

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Re: Where have all the bids gone?
« Reply #4 on: August 27, 2014, 12:54:49 PM »
No I don't but why such interest in BitUSD buyers? Thats all you guys have been talking about for last several posts. Unless you are holding many BitUSD's and looking to unload.
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Offline cygnify

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Re: Where have all the bids gone?
« Reply #5 on: August 27, 2014, 12:55:21 PM »
I'm in the same boat as bitmeat trying to work it out too, and that's what my conclusion came too. Not sure how that sounds scammy?

I pretty much am all in on bitshares not that that proves any thing here.

Offline cygnify

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Re: Where have all the bids gone?
« Reply #6 on: August 27, 2014, 12:57:15 PM »
No I don't but why such interest in BitUSD buyers? Thats all you guys have been talking about for last several posts. Unless you are holding many BitUSD's and looking to unload.

In case you haven't worked it out there is one asset trading currently and we are talking about it on the bitshares forum. I'll leave that at that.

Offline bitmeat

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Re: Where have all the bids gone?
« Reply #7 on: August 27, 2014, 12:57:51 PM »
No I don't but why such interest in BitUSD buyers? Thats all you guys have been talking about for last several posts. Unless you are holding many BitUSD's and looking to unload.

Because it's a big deal. If there are no BitUSD buyers, then the whole experiment that BTSX is, doesn't work.

There is a breakdown somewhere and I'm trying to figure out where. It could be a bootstrapping problem - no BitUSD buyers = no support = no trust in the system = even less BitUSD buyers.

Add to that the other theory above, that it is just not worth for anyone to buy this high, since I believe there are theoretical maximums.

Offline cygnify

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Re: Where have all the bids gone?
« Reply #8 on: August 27, 2014, 01:06:03 PM »
What will more than likely help is when BTSX start rising in price. Demand should pick up for bitUSD as people want to lock in profits. The way it is now most of the first users are bitshares believers. I think this is the best theory. Which means it just needs time and movement.

Offline Riverhead

Re: Where have all the bids gone?
« Reply #9 on: August 27, 2014, 01:17:11 PM »
My very simple theory is that the only reason to buy and or hold bitUSD as a trader is if you think BTSX is over valued. Given the pull back in the last 48 hours people think we've neared the bottom which makes bitUSD less compelling.

Offline Empirical1

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Re: Where have all the bids gone?
« Reply #10 on: August 27, 2014, 01:25:17 PM »
At the moment people in BTSX are long term BTSX bulls the BitUSD market hasn't really come here yet. (The main time BitUSD will be heavily bid atm till that market arrives is if people are short term bearish.)
 
There's a conundrum that if you think BTSX is a relatively safe place to store the value of $ for the next few months that would make you a BTSX bull in which case you'll probably prefer to short BitUSD with your BTSX.

I identified this could be a problem before trading started,

https://bitsharestalk.org/index.php?topic=7416.msg99591#msg99591

Possible ideas for solutions

Introduce BitUSD + 10%. It's the same as shorting below the peg but it might look better if BitUSD was trading closer to the peg.

make a trading pair where the people going short aren't actually taking a leveraged position on the future of BTSX If/how this will work I don't know.

----

Either way I think it will all work out once BTSX is worth a few billion dollars. Might just be limited general BitAsset demand beforehand but plenty of people willing to short
« Last Edit: August 27, 2014, 01:27:09 PM by Empire »

Offline bytemaster

Re: Where have all the bids gone?
« Reply #11 on: August 27, 2014, 01:35:25 PM »
I think people are still learning the best strategies....  I made some money over night with the following strategy.

1) Buy BitUSD when prices BTSX is high and BitUSD is cheap vs USD
2) Sell BitUSD at the "peg price"  (I make money on corrections automatically)
3) Places shorts low to catch a market correction. (when the market overshoots on the down side I get solid short positions)
4) Cover shorts with USD that was bought cheap.

Anyone who wants to trade on the BTSX volatility can make a killing right now. 

So for the BTSX bull who is also a trader the slight discount on BitUSD vs USD is irrelevant and mostly a constant offset that will gradually move closer and closer to the peg over time as liquidity is added.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline Riverhead

Re: Where have all the bids gone?
« Reply #12 on: August 27, 2014, 01:40:44 PM »
I think people are still learning the best strategies....  I made some money over night with the following strategy.

1) Buy BitUSD when prices BTSX is high and BitUSD is cheap vs USD
2) Sell BitUSD at the "peg price"  (I make money on corrections automatically)
3) Places shorts low to catch a market correction. (when the market overshoots on the down side I get solid short positions)
4) Cover shorts with USD that was bought cheap.


Now I just need to capture that in a python script and retire :D.

Offline Agent86

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Re: Where have all the bids gone?
« Reply #13 on: August 27, 2014, 01:45:48 PM »
I think people are still learning the best strategies....  I made some money over night with the following strategy.

1) Buy BitUSD when prices BTSX is high and BitUSD is cheap vs USD
2) Sell BitUSD at the "peg price"  (I make money on corrections automatically)
3) Places shorts low to catch a market correction. (when the market overshoots on the down side I get solid short positions)
4) Cover shorts with USD that was bought cheap.

Anyone who wants to trade on the BTSX volatility can make a killing right now. 

So for the BTSX bull who is also a trader the slight discount on BitUSD vs USD is irrelevant and mostly a constant offset that will gradually move closer and closer to the peg over time as liquidity is added.
bytemaster, you are wrong.  The current market mechanic is flawed.

Using the price feed to set a floor price for valid bitUSD shorts is imperative.  The good news is that this will make bitUSD really work and it will actually track the value of the dollar nicely!  Please act quickly.

Offline bitmeat

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Re: Where have all the bids gone?
« Reply #14 on: August 27, 2014, 01:49:16 PM »
bytemaster, you are wrong.  The current market mechanic is flawed.

Using the price feed to set a floor price for valid bitUSD shorts is imperative.  The good news is that this will make bitUSD really work and it will actually track the value of the dollar nicely!  Please act quickly.

And there it is. I couldn't agree more.

« Last Edit: August 27, 2014, 01:51:02 PM by bitmeat »

 

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