4 ms·

I don't know.... What do you need to have a daily traded volume of $1m? Lets find examples. E.g. 1 - you need e.g. 1k people trading $1k Is that unrealistic?

I don't know.... What do you need to have a daily traded volume of $1m? Lets find examples. E.g. 1 - you need e.g. 1k people trading $1k Is that unrealistic? I don't know. The world is a very big place with a lot of stupid people. But wait! all of these morons use stupid leverage. Many of these platforms give you 100x. Yes, really. Here's a few more ways that you can get $1m daily: e.g. 2 - 1k people putting up $10 with 100x leverage e.g. 3 - 100 people putting up $100 with 100x leverage Neither of these look unrealistic to me.

dwild 4y ago
> - 100 people putting up $100 with 100x leverage You just made me realize how much cash trading platform probably are making using leverage. That explain why they were so quick to add theses coins. I'm curious to know how they manage the risk though.
- sdfhdhjdw3 4y ago
  Hmmmm do fees scale with leverage? I don't know if that's true... My understanding is that leverage is profitable to trading platforms, not because the fees are bigger, but because bigger leverage is "more fun" and so people trade more. I don't know, you might be right.
  - cersa8 4y ago
    The fee is a percentage of the contract size, so higher leverage allows for bigger orders is higher fees.
    - sdfhdhjdw3 4y ago
      The contract size doesn't change with leverage. Do you mean a percentage of the notional value?
      - cersa8 4y ago
        Sorry, you are correct, the fee is a percentage of the notional value.
pbhjpbhj 4y ago
How is the leverage working here beyond providing a convenient lie. 100x$100 is $10k no matter how much you lie that your shitcoin is worth 100x what people will pay for them. And that's diminishing your yield making it marginal whether you're matching your opportunity cost.
- sdfhdhjdw3 4y ago
  > 100x$100 is $10k no matter how much you lie that your shitcoin is worth 100x what people will pay for them. It's not worth 100x. You don't understand how leverage works, clearly.
  - pbhjpbhj 4y ago
    Well, that helped. /s I thought leverage was effectively borrowing on anticipated gains. So I would spend $100 to, get credit to the tune of $10k, then buy my crypto with that. But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit. With leverage there's a debt written to counter the credit, here that doesn't seem to be happening. So, where am I misunderstand the situation here?
    - sdfhdhjdw3 4y ago
      > But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit. This is a meaningless word salad. You have an account with an exchange. Taking a position with leverage 100x just means that every time the instrument moves $1 up, your account goes $100 up, and when it moves $1 down, your account goes $100 down.
    - onlyrealcuzzo 4y ago
      > So, where am I misunderstand the situation here? It's pretty simple. They put in $10 to borrow 100x$10 to buy $1000 worth of the coin. If the coin price goes down 1%, the borrower is wiped out. You don't need fractional reserves for leverage.
SideburnsOfDoom 4y ago
> E.g. 1 - you need e.g. 1k people trading $1k Or 2 people, who pass $1K "worth" of coin back and forth 1k times. it's more efficiently, as you can replace the people with for loops.
- sdfhdhjdw3 4y ago
  Yes, the person I was responding to already said wash trading. You're just repeating what he said, you've added nothing to the conversation. My point was that wash trading isn't the only explanation.
  - prepend 4y ago
    I think wash trading is the explanation. Without regulation these numbers aren’t very useful because of wash trading. The real question is why only this amount of wash trading and why everyone doesn’t do a billion.
    - sdfhdhjdw3 4y ago
      My explanation, on the other hand, also explains why it's not a billion. So my explanation has more explanatory power than yours.
    - SideburnsOfDoom 4y ago
      > The real question is why only this amount of wash trading and why everyone doesn’t do a billion. You can't fool everyone all the time, but the transactions (volume etc) are likely intended to be realistic enough to fool some people sometimes.
SilverBirch 4y ago
Leverage can show you a short term source of revenue, but what we're saying here is a few things: Firstly, they're still going to be paying the fees and spread, so they're still losing tonnes on fees (and this is massive volume per day). That's just not sustainable, especially if people are getting wiped out with these pump and dumps, if it's done against people on leverage someone is going to be stuck holding the bag.
- otherme123 4y ago
  On the pump phase, everything could work, even if it's not sustainable and even if everybody suspects that is not sustainable. I'm old enough to have lived the .com bubble as an adult, and almost everybody knew/suspected it was a bubble, and that 95% of the business would fall at some point in the near future. But if you believed that it would last at least one more year, and you can squeeze a 20% profit, and you can do it leveraged 10x... it's just too tempting to many. Fast forward 7 or so years, housing bubble, same tune: it was a main talking point, everybody knew it was a bubble and unsustainable, but very few predicted the burst to 2007 (and even the ones who did were the same that predicted it to 2004, 2005 and 2006). You are in 2004, everybody saying "this is a bubble" and waiting. In 2005 people still waiting looked like losers, while 2004 buyers laughed and I-told-you. Nobody wants to be a loser, and some people should beat the market or get fired. Only way to beat the market? Ride the bubble. And the rational way to ride a known bubble is leveraged: you enter the market, profit heavily, and ideally exit (it almost never works). You know you cannot ride a bubble expecting it to rise forever, you know it's going to crash, so you need to enter and exit ASAP.

dwild 4y ago

> - 100 people putting up $100 with 100x leverage You just made me realize how much cash trading platform probably are making using leverage. That explain why they were so quick to add theses coins. I'm curious to know how they manage the risk though.

sdfhdhjdw3 4y ago
Hmmmm do fees scale with leverage? I don't know if that's true... My understanding is that leverage is profitable to trading platforms, not because the fees are bigger, but because bigger leverage is "more fun" and so people trade more. I don't know, you might be right.
- cersa8 4y ago
  The fee is a percentage of the contract size, so higher leverage allows for bigger orders is higher fees.
  - sdfhdhjdw3 4y ago
    The contract size doesn't change with leverage. Do you mean a percentage of the notional value?
    - cersa8 4y ago
      Sorry, you are correct, the fee is a percentage of the notional value.

pbhjpbhj 4y ago

How is the leverage working here beyond providing a convenient lie. 100x$100 is $10k no matter how much you lie that your shitcoin is worth 100x what people will pay for them. And that's diminishing your yield making it marginal whether you're matching your opportunity cost.

sdfhdhjdw3 4y ago
> 100x$100 is $10k no matter how much you lie that your shitcoin is worth 100x what people will pay for them. It's not worth 100x. You don't understand how leverage works, clearly.
- pbhjpbhj 4y ago
  Well, that helped. /s I thought leverage was effectively borrowing on anticipated gains. So I would spend $100 to, get credit to the tune of $10k, then buy my crypto with that. But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit. With leverage there's a debt written to counter the credit, here that doesn't seem to be happening. So, where am I misunderstand the situation here?
  - sdfhdhjdw3 4y ago
    > But, here we're talking about people buying a coin and the _seller_ saying the coin is worth 100x and so skipping the step of using fractional reserve to 'create' the funds (the loan amount) to exchange for crypto and just going straight to a deceit. This is a meaningless word salad. You have an account with an exchange. Taking a position with leverage 100x just means that every time the instrument moves $1 up, your account goes $100 up, and when it moves $1 down, your account goes $100 down.
  - onlyrealcuzzo 4y ago
    > So, where am I misunderstand the situation here? It's pretty simple. They put in $10 to borrow 100x$10 to buy $1000 worth of the coin. If the coin price goes down 1%, the borrower is wiped out. You don't need fractional reserves for leverage.

SideburnsOfDoom 4y ago

> E.g. 1 - you need e.g. 1k people trading $1k Or 2 people, who pass $1K "worth" of coin back and forth 1k times. it's more efficiently, as you can replace the people with for loops.

sdfhdhjdw3 4y ago
Yes, the person I was responding to already said wash trading. You're just repeating what he said, you've added nothing to the conversation. My point was that wash trading isn't the only explanation.
- prepend 4y ago
  I think wash trading is the explanation. Without regulation these numbers aren’t very useful because of wash trading. The real question is why only this amount of wash trading and why everyone doesn’t do a billion.
  - sdfhdhjdw3 4y ago
    My explanation, on the other hand, also explains why it's not a billion. So my explanation has more explanatory power than yours.
  - SideburnsOfDoom 4y ago
    > The real question is why only this amount of wash trading and why everyone doesn’t do a billion. You can't fool everyone all the time, but the transactions (volume etc) are likely intended to be realistic enough to fool some people sometimes.

SilverBirch 4y ago

Leverage can show you a short term source of revenue, but what we're saying here is a few things: Firstly, they're still going to be paying the fees and spread, so they're still losing tonnes on fees (and this is massive volume per day). That's just not sustainable, especially if people are getting wiped out with these pump and dumps, if it's done against people on leverage someone is going to be stuck holding the bag.

otherme123 4y ago
On the pump phase, everything could work, even if it's not sustainable and even if everybody suspects that is not sustainable. I'm old enough to have lived the .com bubble as an adult, and almost everybody knew/suspected it was a bubble, and that 95% of the business would fall at some point in the near future. But if you believed that it would last at least one more year, and you can squeeze a 20% profit, and you can do it leveraged 10x... it's just too tempting to many. Fast forward 7 or so years, housing bubble, same tune: it was a main talking point, everybody knew it was a bubble and unsustainable, but very few predicted the burst to 2007 (and even the ones who did were the same that predicted it to 2004, 2005 and 2006). You are in 2004, everybody saying "this is a bubble" and waiting. In 2005 people still waiting looked like losers, while 2004 buyers laughed and I-told-you. Nobody wants to be a loser, and some people should beat the market or get fired. Only way to beat the market? Ride the bubble. And the rational way to ride a known bubble is leveraged: you enter the market, profit heavily, and ideally exit (it almost never works). You know you cannot ride a bubble expecting it to rise forever, you know it's going to crash, so you need to enter and exit ASAP.