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Can one short USDC with leverage?

by bb88 4y ago

0x53 4y ago
Not easily that I know of, the best way would be to use a defi application like compound.finance. You can deposit usdc and take a loan against it in another currency. Then you repay the loan later. However, that is just a normal short. The only real way to lever this is to keep depositing the loan money, and taking out more loans which is expensive in terms of fees.
- rabf 4y ago
  You can trade it with leverage here: https://www.bybit.com/trade/usdt/USDCUSDT https://www.bybit.com/trade/usdt/USDCUSDT
WalterSear 4y ago
Short? I can't see this not returning to it's peg by the next news cycle. It's free money. SVB went bankrupt - as a business: it can't pay its bills. People are reacting to this as if the deposits have vanished entirely. If you think USDC is a shorting opportunity, short anything crypto. USDC is literally the second largest domino.
- dfadsadsf 4y ago
  There is good chance that ~30% of deposits above 250k vanished. SVB really screwed up on trades. With equity at zero or close to zero, there is no backstop. Net present value of 2% securities that SVB loaded on is way below par.
  - WalterSear 4y ago
    Ah, that's different. I understood it to be ~$2 billion out of ~$200+ billion, not $60+ billion in losses. EDIT - Do you have a the $60+ billion figure? All I am seeing is a $2 billion dollar shortfall.
- babyshake 4y ago
  You think USDC failing would be bigger than ETH failing? If ETH broke in a way it couldn't recover from I would think that is the second biggest domino (close to tied for first, even).
  - WalterSear 4y ago
    Sure, but Eth isn't as much of a financial domino being propped up. If the internet failed, all crypto would fail. Does that make it the biggest domino in crypto?
  - humanizersequel 4y ago
    ETH is probably a bigger domino than Bitcoin right now.
- panarky 4y ago
  If you're right, then you can pick up some easy profits by buying USDC at a discount. The amount you're willing to commit is a good indicator of how confident you are in your assessment.
- pishpash 4y ago
  Vultures are offering 60%-80% on SVB-held funds, so that's where they expect recovery to be at.
- PheonixPharts 4y ago
  > I can't see this not returning to it's peg by the next news cycle. It's free money. But isn't this the problem? If over the weekend billions of dollars of USDC is purchased at less that $1 from people expecting to cash in on "free money" come Monday, Circle is going to have to be able to ensure that that actually happens, which could easily require more liquidity than remotely possible (edit: I just realized that Circle claims that back 1-to-1 with liquid assets). Volume right now in USDC is at record highs. If all of those people are hoping to make free money on Monday, and it turns out Circle is unable to maintain that, then the entire USDC will crash almost instantly once people realize it's impossible to keep it pegged. I'm far from a crypto expert so could you clarify what I'm missing?
  - daydream 4y ago
    USDC is back to $0.98 as of Saturday evening.
    - PheonixPharts 4y ago
      I don't think you understand my question or the issue at hand, but I think I have found some answers. It doesn't matter if it was already $1 right now. The assumption is that everyone purchasing USDC today when it was below $1 is planning on selling it Monday as a quick arbitrage. Assuming the peg is restored by Monday, Circle is still going to have to have a lot of liquidity to meet the demands of a huge number of people trying to realize that $1. Again, today was the highest volume ever for USDC and presumably many of those transactions are people expecting to cash out Monday. It seems very possible to me, that Circle will not be able to meet the liquidity demands of keeping the peg and fulfilling their promise of $1 USD for 1 USDC. If they falter at all, and the peg doesn't hold, then anyone holding will immediately panic and attempt to liquidate their position leading to a collapse. The piece of the puzzle I was missing is that I didn't realize that Circle claims that they have cash reserves (cash and 30-day treasuries) equal to the entire USDC market cap. So anyone who trusts that Circle has the liquidity and cash on hand to payout everything views this as free money. I would point out that this "arbitrage" existing for more than a brief moment implies there are lots of people who do not believe that Circle can meet these demands and are happily unloading their positions.
SilasX 4y ago
Yes, and I have been, by accident! I borrowed USDC on Compound.finance a while ago, using wrapped bitcoin as collateral and the loan remains open. I was intending to just extract some equity from my BTC without selling it, not profit from crashes, but that effectively gives me a short position since I benefit from USDC being easier to buy and thus settle my debt. Last night I bought at a ~6% discount on Gemini.
- anonymousiam 4y ago
  Yeah, but your BTC lost 20% of its value over the same period.
nscalf 4y ago
Yep, get a loan denominated in USDC. You can lever up in USDC and buy USDT with it.
rewtraw 4y ago
Yes, primarily on Bybit. It's a terrible trade to make now though.
323 4y ago
Yes, by creating a synthetic - you short BTC/USDC and long BTC/USD. This will create a USDC/USD synthetic. Both BTC/USDC and BTC/USD can offer up to 100x leverage, so the synthetic USDC will also be up to 100x. Of course, there is a long list of risks in such a trade, and if you need to ask about it it's not for you.
- dmak 4y ago
  I am curious to read more about the risks, but don't plan to make this trade. Could you share a few points just to give me a direction to dig deeper?
  - SilasX 4y ago
    It seems like the point of that comment to look knowledgeable while providing no actionable information[2] and falsely implying it’s too difficult[1], so I’m guessing no, as that would defeat their seeming objectives in making the comment to begin with. [1] which it isn’t; here’s what legit attempts at explanation look like: https://news.ycombinator.com/item?id=35113400 https://news.ycombinator.com/item?id=35113400 https://news.ycombinator.com/item?id=35113126 https://news.ycombinator.com/item?id=35113126 [2] if it weren’t, it would explained some of the terminology used, since the asker clearly isn’t deep in the business in the first place
  - oarabbus_ 4y ago
    Binance announced today they will have USDC/USDT and other stablecoin trading pairs. https://www.binance.com/en/support/announcement/binance-adds-stablecoin-spot-trading-pairs-launches-fee-promotion-discontinues-auto-conversion-for-stablecoins-dd331bed50bb44f485e47aed132bfc02 https://www.binance.com/en/support/announcement/binance-adds... Individuals in many countries (but not the USA) have access to Leverage Trading on Binance. You could also use any of the following DeFi liquidity pools: https://nomics.com/markets/usdt-tether/usdc-usd-coin/markets https://nomics.com/markets/usdt-tether/usdc-usd-coin/markets

Can one short USDC with leverage?

by bb88 4y ago

Can one short USDC with leverage?

0x53 4y ago

Not easily that I know of, the best way would be to use a defi application like compound.finance. You can deposit usdc and take a loan against it in another currency. Then you repay the loan later. However, that is just a normal short. The only real way to lever this is to keep depositing the loan money, and taking out more loans which is expensive in terms of fees.

rabf 4y ago
You can trade it with leverage here: https://www.bybit.com/trade/usdt/USDCUSDT https://www.bybit.com/trade/usdt/USDCUSDT

WalterSear 4y ago

Short? I can't see this not returning to it's peg by the next news cycle. It's free money. SVB went bankrupt - as a business: it can't pay its bills. People are reacting to this as if the deposits have vanished entirely. If you think USDC is a shorting opportunity, short anything crypto. USDC is literally the second largest domino.

dfadsadsf 4y ago
There is good chance that ~30% of deposits above 250k vanished. SVB really screwed up on trades. With equity at zero or close to zero, there is no backstop. Net present value of 2% securities that SVB loaded on is way below par.
- WalterSear 4y ago
  Ah, that's different. I understood it to be ~$2 billion out of ~$200+ billion, not $60+ billion in losses. EDIT - Do you have a the $60+ billion figure? All I am seeing is a $2 billion dollar shortfall.
babyshake 4y ago
You think USDC failing would be bigger than ETH failing? If ETH broke in a way it couldn't recover from I would think that is the second biggest domino (close to tied for first, even).
- WalterSear 4y ago
  Sure, but Eth isn't as much of a financial domino being propped up. If the internet failed, all crypto would fail. Does that make it the biggest domino in crypto?
- humanizersequel 4y ago
  ETH is probably a bigger domino than Bitcoin right now.
panarky 4y ago
If you're right, then you can pick up some easy profits by buying USDC at a discount. The amount you're willing to commit is a good indicator of how confident you are in your assessment.
pishpash 4y ago
Vultures are offering 60%-80% on SVB-held funds, so that's where they expect recovery to be at.
PheonixPharts 4y ago
> I can't see this not returning to it's peg by the next news cycle. It's free money. But isn't this the problem? If over the weekend billions of dollars of USDC is purchased at less that $1 from people expecting to cash in on "free money" come Monday, Circle is going to have to be able to ensure that that actually happens, which could easily require more liquidity than remotely possible (edit: I just realized that Circle claims that back 1-to-1 with liquid assets). Volume right now in USDC is at record highs. If all of those people are hoping to make free money on Monday, and it turns out Circle is unable to maintain that, then the entire USDC will crash almost instantly once people realize it's impossible to keep it pegged. I'm far from a crypto expert so could you clarify what I'm missing?
- daydream 4y ago
  USDC is back to $0.98 as of Saturday evening.
  - PheonixPharts 4y ago
    I don't think you understand my question or the issue at hand, but I think I have found some answers. It doesn't matter if it was already $1 right now. The assumption is that everyone purchasing USDC today when it was below $1 is planning on selling it Monday as a quick arbitrage. Assuming the peg is restored by Monday, Circle is still going to have to have a lot of liquidity to meet the demands of a huge number of people trying to realize that $1. Again, today was the highest volume ever for USDC and presumably many of those transactions are people expecting to cash out Monday. It seems very possible to me, that Circle will not be able to meet the liquidity demands of keeping the peg and fulfilling their promise of $1 USD for 1 USDC. If they falter at all, and the peg doesn't hold, then anyone holding will immediately panic and attempt to liquidate their position leading to a collapse. The piece of the puzzle I was missing is that I didn't realize that Circle claims that they have cash reserves (cash and 30-day treasuries) equal to the entire USDC market cap. So anyone who trusts that Circle has the liquidity and cash on hand to payout everything views this as free money. I would point out that this "arbitrage" existing for more than a brief moment implies there are lots of people who do not believe that Circle can meet these demands and are happily unloading their positions.

SilasX 4y ago

Yes, and I have been, by accident! I borrowed USDC on Compound.finance a while ago, using wrapped bitcoin as collateral and the loan remains open. I was intending to just extract some equity from my BTC without selling it, not profit from crashes, but that effectively gives me a short position since I benefit from USDC being easier to buy and thus settle my debt. Last night I bought at a ~6% discount on Gemini.

anonymousiam 4y ago
Yeah, but your BTC lost 20% of its value over the same period.

nscalf 4y ago

Yep, get a loan denominated in USDC. You can lever up in USDC and buy USDT with it.

rewtraw 4y ago

Yes, primarily on Bybit. It's a terrible trade to make now though.

323 4y ago

Yes, by creating a synthetic - you short BTC/USDC and long BTC/USD. This will create a USDC/USD synthetic. Both BTC/USDC and BTC/USD can offer up to 100x leverage, so the synthetic USDC will also be up to 100x. Of course, there is a long list of risks in such a trade, and if you need to ask about it it's not for you.

dmak 4y ago
I am curious to read more about the risks, but don't plan to make this trade. Could you share a few points just to give me a direction to dig deeper?
- SilasX 4y ago
  It seems like the point of that comment to look knowledgeable while providing no actionable information[2] and falsely implying it’s too difficult[1], so I’m guessing no, as that would defeat their seeming objectives in making the comment to begin with. [1] which it isn’t; here’s what legit attempts at explanation look like: https://news.ycombinator.com/item?id=35113400 https://news.ycombinator.com/item?id=35113400 https://news.ycombinator.com/item?id=35113126 https://news.ycombinator.com/item?id=35113126 [2] if it weren’t, it would explained some of the terminology used, since the asker clearly isn’t deep in the business in the first place
- oarabbus_ 4y ago
  Binance announced today they will have USDC/USDT and other stablecoin trading pairs. https://www.binance.com/en/support/announcement/binance-adds-stablecoin-spot-trading-pairs-launches-fee-promotion-discontinues-auto-conversion-for-stablecoins-dd331bed50bb44f485e47aed132bfc02 https://www.binance.com/en/support/announcement/binance-adds... Individuals in many countries (but not the USA) have access to Leverage Trading on Binance. You could also use any of the following DeFi liquidity pools: https://nomics.com/markets/usdt-tether/usdc-usd-coin/markets https://nomics.com/markets/usdt-tether/usdc-usd-coin/markets