A huge amount of shorts were expired. What will happen?

[cass]

Shouldn't the increase demand for bitusd increase BTS price?

In general, if the demand for BitAssets is coming from the outside and there are people willing to short at the price feed, then I think that is a safe way of looking at it. If it is within BitShares, I don't think it should have an effect. On the other hand if the person holding the short is "demanding" BitUSD so he can cover his short to unlock his BTS collateral to then dump for fiat, then it would actually cause a decrease in BTS price (and you would also notice the correlating decrease in BitUSD supply).

Basically, it is never as simple as "people demanding BitUSD" = "BTS price must go up".

thx for your explanation

[arhag]

Shouldn't the increase demand for bitusd increase BTS price?

In general, if the demand for BitAssets is coming from the outside and there are people willing to short at the price feed, then I think that is a safe way of looking at it. If it is within BitShares, I don't think it should have an effect. On the other hand if the person holding the short is "demanding" BitUSD so he can cover his short to unlock his BTS collateral to then dump for fiat, then it would actually cause a decrease in BTS price (and you would also notice the correlating decrease in BitUSD supply).

Basically, it is never as simple as "people demanding BitUSD" = "BTS price must go up".

[Rune]

creating and covering bitUSD for BTS doesn't actually affect the market cap of BTS, it just moves the risk around among the economic actors.

I'm betting on good news from light wallet coming out tomorrow

[mf-tzo]

The fact that the usd peg is working is great and we know for some time now that it is working.

The fact that someone bought those bitusd without moving the peg is also great.

The fact that despite this need to buy the bitusds to cover the position resulted in BTS to fall even slightly is not so great.

Now we have lower market cap in BTS and fewer bitusd in circulation..How is that good?

Shouldn't the increase demand for bitusd increase BTS price?

So I will ask again...Is $1 mil bitusd and $10 mil BTS market cap acceptable?

It seems to me that BTS price is not affected by the demand of the bitassets and as long as the BTS market cap is x3 of all the bitassets we are all happy? What am I missing here?

[svk]

Daily volume now up to $385k, and looks like Coinmarketcap just started adding the internal exchange volume to the total volume for Bitshares even though it's not yet showing up in the Markets tab.

[.yoshi]

Looks like everything already got covered, crisis over folks

BitUSD supply is now at 500k, and 24 H volume is at 200k making it number 5 on CMC

And people claim you cannot sell 200K of BitUSD at anywhere near $1 in one day.   Looks like someone managed to exit their position at the FEED price.   In other words they bought up $200K worth of BTS without moving the price.

and is that good?

just trying to understand...

Sent from my ALCATEL ONE TOUCH 997D

yes, it is good. it suggests that BitUSD is functioning as intended

someone 'sold' $200k worth of BitUSD and the price remained very close to $1.00

[liondani]

Looks like everything already got covered, crisis over folks

BitUSD supply is now at 500k, and 24 H volume is at 200k making it number 5 on CMC

And people claim you cannot sell 200K of BitUSD at anywhere near $1 in one day.   Looks like someone managed to exit their position at the FEED price.   In other words they bought up $200K worth of BTS without moving the price.

and is that good?

just trying to understand...

Sent from my ALCATEL ONE TOUCH 997D

[mf-tzo]

I am confused..."Someone bought up $200k of bitusd without moving the price" How is BTS @ $23.3 mil market cap and this is not moving the price? BTS market cap is near all time low and we seem to be happy about it?

Can someone please explain what is normal in terms of market caps?
Do we want $100k bitusd and $100 mil BTS market cap?
Do we want $500k bitusd and $20 mil BTS market cap?

Is $1 mil bitusd and $10 mil BTS market cap acceptable?

[svk]

Aaaand they're gone

That was impressive watching all that action in the last few minutes, at one point there were 6 shorts for about 60k bitUSD with collateral of 13 million BTS that got bought up on the next block

[arhag]

Looks like everything already got covered, crisis over folks

Well let's still make sure the bug (meaning expired short covers at the price feed should match with short sells at the price feed) is fixed.

Uhm, how did you come to the conclusion that everything got covered?

I was just basing it off of what Rune said. But looking at the client, I can see that indeed there are still expired shorts remaining and they are not matching with the short sell orders at the price feed. Actually there is currently only one short sell order at the price feed for a quantity of 10.055 BitUSD. And there are 6 expired short positions which together will need to purchase approximately 205,280 BitUSD.

So is there anyone with some spare BitUSD around who wants to buy some cheap (of course knowing our luck the BTS price will drop even further) BTS?

[svk]

Looks like everything already got covered, crisis over folks

Well let's still make sure the bug (meaning expired short covers at the price feed should match with short sells at the price feed) is fixed.

Uhm, how did you come to the conclusion that everything got covered?

A lot did get covered but not all, there are still six orders left worth around $200k, but like Rune said we're now down to 485k supply.

All in all quite impressive like BM pointed out

[graffenwalder]

Looks like everything already got covered, crisis over folks

Well let's still make sure the bug (meaning expired short covers at the price feed should match with short sells at the price feed) is fixed.

Uhm, how did you come to the conclusion that everything got covered?

[arhag]

Looks like everything already got covered, crisis over folks

Well let's still make sure the bug (meaning expired short covers at the price feed should match with short sells at the price feed) is fixed.

[arhag]

When I say above the price feed i mean that the bitasset is overvalued (so feed is in BTS per bitasset). I get super confused when the feed is described the other way so this is how I have to think of it .

Normally I think of it in BTS/BitAsset as well. In this case, I switch to BitAsset/BTS because otherwise I don't think I would be able to accurately say "10% above the price feed". If the way the system is programmed is to buy BitAsset sell orders down to 10% below the price feed (in BitAsset/BTS), that means it will buy down to a price limit of p BitAsset/BTS where p = 0.9*f and f is the price feed in BitAsset/BTS. If I were to invert the price units, I would have a price limit of 1/p BTS/BitAsset and 1/p = (1/0.9)*(1/f) where the price feed is (1/f) BTS/BItAsset. That means the margin calls would buy BitAsset sell orders up to 11.1111% (1/0.9 - 1 = 1/9) above the price feed (in BTS/BitAsset). As much as I hate thinking in this backwards way, I prefer a nice number like 10% much more than a number with repeating decimals.

Right this makes sense. As long as they'll get margin called if the collateral goes too low then there's nothing wrong with letting their order sit at the price feed. At first I thought it was unfair they wouldn't have to pay interest, but at high bitasset demand interest rate goes to 0 anyway.

Actually, according to bytemaster's post, the expired post still pays interest. So if they have a non-zero interest rate, it provides them with an incentive to either cover before expiration or if they fail to do that before expiration they can just buy the BitUSD they were going to buy anyway to cover and use it to buy their expired shorts cover order. Considering the fact that you could not guarantee that you would match your short's cover rather than another short's cover (not to mention any legitimate BTS sell orders at or below, again in BitAsset/BTS, the price feed), I would feel a lot more comfortable with covering my short before it expires even if it had zero interest rate (after all you need to consider the opportunity cost of your BTS collateral).

If the feed is 100 BTS per bitUSD, then if there's a buy order at 115 BTS per bitUSD it should be possible to match that buy order and all other buy orders by shorting all the way down to the feed price for an instant expected profit (since you can expect bitasset price to tend towards the feed price). Then every time bitasset demand increases enough to make buy orders go above the feed, there will be an incentive to short the bitasset since you can be certain you will profit from the amount that the buy orders exceed the feed price.

One would certainly hope so (regarding the bolded part), or else the peg wouldn't be working well. But there is no reason why the lowest BitUSD sell/short order couldn't remain above 115 BTS/BitUSD over the following 30 days. Then if after those 30 days the price feed has moved up above 115 BTS/BitUSD, you could end up being forced to cover at a loss (even without a margin call).

[bytemaster]

Looks like everything already got covered, crisis over folks

BitUSD supply is now at 500k, and 24 H volume is at 200k making it number 5 on CMC

And people claim you cannot sell 200K of BitUSD at anywhere near $1 in one day.   Looks like someone managed to exit their position at the FEED price.   In other words they bought up $200K worth of BTS without moving the price.