BitShares Forum
Main => General Discussion => Topic started by: eagleeye on September 07, 2014, 01:17:42 am
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Hi,
If bitUSD has a short of Bid depth of 20 million BTSX ( right now ) Ask depth of 5 million BTSX. This obviously fluctates widely but we have a market.
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Reduced to 0.25% supply == 5m BTSX
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most of the 25 millions comes from the devs fund. so the depth is not big at the moment. but come and trade with me, you are welcome :)
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I did make a small trade a few minutes ago. I sold 1.2 BitUSD to buy 33.2+ BTSX a few minutes ago (at a rate of 27.55 BTSX/BitUSD). I thought that was a good trade at 27.55 BTSX/BitUSD considering that when I used some BTSX that I bought on Bter at prices between 7500 sat and 8700 sat to immediately sell on the BTSX exchange to buy BitUSD last month I was buying at an average rate of ~24.5 BTSX/BitUSD. I still have some BitUSD left if there is a more favorable trade down the road if BTSX went down in price.
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I disagree - there currently is no market without trading. Look at the volumes actually traded in the bottom chart here - it is dead:
http://bitsharesblocks.com/assets/asset?id=USD
Now let me explain my reasoning for this. The new BitUSD creation market has effectively been closed down by the feed rules, which requires buyers above the peg price. As you can see the highest bid at this point is around 12% below that price. Shorts are currently reluctant to go that low, because in the absence of much movement in BTSX (no need to leverage) they pay a big upfront cost equal to the spread.
Although the existing BitUSD are free to trade where the market goes, recent buyers of BitUSD near or above the peg are reluctant to sell 12% below. So they hold for now, but as time passes, they will relent to the market reality and become more willing to release their BitUSD at lower prices. Buyers are happy to hold off at the discount, because they can see that without liquidity it will be impossible to offload again near the peg.
While the intent behind the rules is a good one, the only way to get the market to actually trade near a peg price is to allow the market to determine the right level of incentive to do so.
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I disagree - there currently is no market without trading. Look at the volumes actually traded in the bottom chart here - it is dead:
http://bitsharesblocks.com/assets/asset?id=USD
Now let me explain my reasoning for this. The new BitUSD creation market has effectively been closed down by the feed rules, which requires buyers above the peg price. As you can see the highest bid at this point is around 12% below that price. Shorts are currently reluctant to go that low, because in the absence of much movement in BTSX (no need to leverage) they pay a big upfront cost equal to the spread.
Although the existing BitUSD are free to trade where the market goes, recent buyers of BitUSD near or above the peg are reluctant to sell 12% below. So they hold for now, but as time passes, they will relent to the market reality and become more willing to release their BitUSD at lower prices. Buyers are happy to hold off at the discount, because they can see that without liquidity it will be impossible to offload again near the peg.
While the intent behind the rules is a good one, the only way to get the market to actually trade near a peg price is to allow the market to determine the right level of incentive to do so.
Why do we have "Feed Rules?"
Also there is a market, the order book says so. The market is just not that active.
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Liquidity is key for a market. I think it will improve a lot as the market finds a natural level to trade at, but everyone looks a bit shy right now. So the costs of trading (spreads) are high.