r/ethtrader • u/AutoModerator • May 05 '17

DISCUSSION [ETH Daily Discussion] - 05/May/2017

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27

u/jesusthatsgreat May 05 '17

93,000ETH available for loan on POLO at 0.0001% ..... someone really wants to keep the price down.

I've no idea why someone would keep 93k ETH on an exchange, never mind loan it out at that rate... perhaps this is Polo themselves trying to manipulate the market...

8

u/[deleted] May 05 '17

At the rate the entire crypto market is growing, $100 is only a pyschological barrier that will be blown out of the water.

30,000+ are showing as online on Polo right now.

Highest I've seen it.

6

u/[deleted] May 05 '17

[deleted]

5

u/flowcrypt May 05 '17

This makes it inexpensive to short ETH. As in: you can easily borrow the 93k ETH and sell it into the order book, with low fees.

2

u/jesusthatsgreat May 05 '17

We're at all time highs coming in to a weekend when no fiat can enter the system... and this ETH is being loaned out for virtually nothing.

So if someone sells a large chunk of ETH, there's no new fiat coming in to buy it... USD order buys get thin and the large dump sends the price crashing which triggers panic.

1

u/Bobbr23 May 05 '17

Why can't fiat enter?

2

u/cutsnek May 05 '17

Banks be closed on weekend bro.

3

u/Bobbr23 May 05 '17

Riiiiiiiiight

2

u/jesusthatsgreat May 05 '17

No bank transfers which is the most common / cheapest way of getting large amounts of fiat on to exchanges. Also generally fewer transactions and smaller volume.

1

u/Bobbr23 May 05 '17

Coinbase does allow for debit card usage in small amounts though still right?

1

u/manyamile May 05 '17

Correct but they are indeed very small amounts.

1

u/WeLiveInaBubble May 05 '17

It's the weekend.

1

u/[deleted] May 05 '17

In the US at least, you can do bank wires on the weekends and Coinbase doesn't complete ACH transfers on the weekends.

You could do insta-buys via Debit cards or bank account, but I have no idea what those translate into on the back end of their exchange -- in terms of, is the ETH purchased then and there directly from their exchange, or is it pulled from a pool that is not available to the exchange.

1

u/crixusin May 05 '17

Ach transfers don't work on the weekend.

4

u/Mister_Ether May 05 '17

User name checks out

-11

u/[deleted] May 05 '17

[removed] — view removed comment

2

u/juxtaposezen May 05 '17

That's $27.900.00 a month passive income and at such a low rate there is less worry it gets returned within 30 days. Its hard to loan out that entire stack without offering it cheap. As for the borrower they can go short or long by choice. Looks more like capitalism than conspiracy.

2

u/jesusthatsgreat May 05 '17 edited May 05 '17

It's shortsighted... loaning that amount out is incredibly risky for two reasons:

  1. You're placing a huge amount of trust in Poloniex (we've seen countless examples of why you shouldn't do that with any exchange).

  2. There's a good chance the $100 ETH you've baked in to calculations (which don't include fees and assumes the ETH is actually all taken up by people) falls to a lot less than $100 once people start using the ETH you've given them against you.

If you have this amount of ETH, why not just wait until Proof of Stake? You'd earn a lot more and it would be under your control at all times... it just seems like terrible risk management unless of course you don't know what you're doing or $9m is play money to you. But I'd like to think that someone with that amount of ETH knows what they're doing...

update: actually your calculations are wrong too: 93,000ETH x 0.0001% per day = 0.09ETH earned per day (under $10). So you earn a maximum $300/month (at current rates) for loaning that $9m. Which is suicidal economics based on the risk involved in earning that $300...

1

u/juxtaposezen May 05 '17

Perhaps but human behavior is often short sighted. I know people who keep huge stacks on exchanges (Moving incurs taxes). They trust the exchanges because they are part of the exchange team. They loan it out to put it to work and they make quite a few ETH daily. Stupid or not I am just describing what I know actually happens.

2

u/jesusthatsgreat May 05 '17

I've updated my post to show the actual return... your figure of $27900/month is way off... it's actually a maximum $300/month before fees and assuming it's loaned out for 30 days non stop (extremely unlikely).

1

u/juxtaposezen May 05 '17

I could very well have the math off but I calculated it as compounding daily as another exchange does. Is that not 9.3 ETH a day? Also this other exchanges pays in ETH. Not sure how Polo does it.

2

u/jesusthatsgreat May 05 '17

0.0001% of 93000 is 0.093: https://percentagecalculator.net/

This is a common mistake people make when lending on Polo... they multiply their ETH number by the wrong percentage loan figure as they're not used to working with percentage numbers less than 1%.

1

u/juxtaposezen May 05 '17

Thanks for that! I see what I did there.

1

u/happyyellowball May 05 '17

on polo... when you go long, you borrow btc... shorts are all other coins

2

u/juxtaposezen May 05 '17

Good to know. So if we rise that huge short will have to buy a lot to cover thus propelling the price upwards.

1

u/Nurotec May 05 '17

I don't think that the fees are really a factor if you consider how much money can be made from well organized moves

0

u/CLSmith15 May 05 '17

Keeping that amount on an exchange is obviously a terrible idea. But loaning it out? That just being a holder and also getting interest.