Coinbase Pro Disables Margin Trading

>Not saying that Coinbase does this, but incoming wires/ACH/whatever continue to roll in during an outage, but they can stop the initiation of any outgoing xfers, and then be slow with them claiming a backlog.

That would only make sense if coinbase was down for several days at a time. If it was only down for a few hours then that's nearly not enough time for enough money to flow in (aren't wire transfers batched per day rather than processed in real time?). It also doesn't answer my earlier question of "why don't they just stop pumping before they run out of money?".

>A big Canadian exchange, quadrigacx that blew up ~2 years ago was doing all sorts of tricks like this.

Perhaps that's exactly what's happening at coinbase, but pointing to them being down when there's high trading volume isn't a convincing argument.

>Your confidence in coinbase, given they are unregulated in any meaningful way, is IMO misplaced.

I think you're reading too much into my comment. I wasn't trying to claim that cryptocurrency exchanges didn't engage in shady behavior, I was only claiming that the specific accusation of "they halted trading because of liquidity issues from their pumping" didn't make any sense.

You are incorrect. Coinbase regularly gets audited practically every other week by some random regulating body in the country. I’d say ask someone who works there, but you probably won’t as calling any Crypto exchange as ‘Bitcoin’ exchange is something that died off around 2015.

> When it comes to bitcoin exchanges, there really is no need for conspiracy theories

You're saying you don't think that any existing exchanges are conspiring (or have conspired) to defraud?

> there have been multiple high profile stories of very large players engaged in fraud, embezzlement, and duplicitous price fixing, and they are completely unregulated.

Doesn't this make such theories more plausible, not less?

Or a typical writable database. Resharding data may not be feasible at all during a high load event.

They can't remove real liquidity because then the individual posting an order will realize. They can't add fake liquidity because then the individual who attempts to lift the ghost order will realize.

So how can they do this without getting caught (and they haven't been caught - firms like Alameda are watching closely)?

This sounds like one of those things that's easy to just exclaim but is lacking a mapping to anything specific

You didn’t really answer his question though.

No, I don't think I even realized there was one. It's okay, thought, I only lost about $100. (I kept the balance low mainly because I didn't trust my own code yet.)

Yes. These /BRR contracts trade on Globex like most other futures contracts, meaning around-the-clock (23/5) trading. Liquidity is fine for single contracts in the front month -- bid/ask spreads are one to three ticks, and you won't have any problems getting filled. If you're trading tens of contracts, you're going to move the order book somewhat, but I'm assuming your volume isn't at that level. Like any other tradable instrument, you run the risk of slippage in volatile situations, e.g. a stop loss hitting during a big liquidation event. Since you appear to be willing to hold a short position for a long time, this shouldn't be an issue for you.

Exchange (that is, Globex) availability hasn't ever really been an issue (and I can't remember the last outage they had; it'll be a big deal, considering there are literal trillions in notional value swapping hands every day). Your broker, which will be your gateway to actually trading the contracts, will be the bottleneck of availability.

I personally use Interactive Brokers, and their uptime is great. Even during times of extreme volatility this year across many markets, which caused the likes of Robinhood or even more established brokers like TD Ameritrade to experience downtime, IBKR has been fine. Obviously your mileage may vary and I suggest you do your due diligence on brokers.

Another way to do it is by borrowing bitcoin with other collateral, selling it, then buying it back at a cheaper price. You can get a sense of rates here: https://defirate.com/loans/

So you might supply USDC on Aave and borrow WBTC. You can then trade that WBTC for USD (if you're bearish on BTC relative to USD), wait for the WBTC price to drop, buy it back and repay your loan.

Though if you're wealthy enough to trade the futures, it's taxed more favorably and easier to manage.

No market anywhere can offer that

RH created 'cash management' that came with a debit card, but the exploit was exposed (and patched) before that was available to everyone, but even then you'd have to find an exploit where spending money via the debit card doesn't do the same sanity checks as withdrawing.

0: https://news.ycombinator.com/item?id=18672951

Is that any different than bank of america operating a retail bank and a brokerage platform (Merrill Edge[1])?

[1] https://www.merrilledge.com/investing/margin-trading

It's fair to say there were a lot of causes of the Great Depression, to be sure. However.

Much of the "Roaring 20s" that preceded the giant market crash happened because of zero oversight or regulation and saw tons of fraud, and, yep, tons of reckless margin trading. This created huge systemic risk that all came to bear on Black Tuesday, which led to unemployment, homelessness and bankruptcies. This led to the Securities Act of 1933 and 1934.

Further, the Glass-Steagall act, also of 1933 separated investment banks and depository institutions. I'll let you take one guess why this was necessary. I'll also let you take one guess what happened after it was repealed (in 1999).

Also kicked off in 1933 was the FDIC.

All three of these are incredibly relevant to crypto and to this specific conversation.

[1] https://www.history.com/topics/us-government/securities-and-...

A big part of that was people using stocks as collateral to borrow money to buy more stocks.

And here we are now, a plague and a massive stock rally.

If I were to bet, I'd say people should prepare for history to rhyme.

The year in which the regulation was brought in is totally irrelevant, the only thing that matters is whether the regulation is useful and meaningful. I guarantee you if Tether had to abide by the Securities Act it would not exist. I for one am thrilled to have the SEC looking out for us, keeping the scammers and frauds at bay - or at least trying.

Good policy is good policy no matter what year we came up with it.

History repeating/rhyming as farce/tragedy etc. etc.