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Viability and volatility are not mutually exclusive but yes, it is not too practical when the currency is that volatile. When a currency is wildly appreciating it encourages hoarding....
Can you help answer these questions from other members on NexusFi?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,225
How does that work? How do they convert their local cash into Bitcoin? How do their poor relatives they send them to convert them back? It's not like you can walk into your local Bank/Post Office/Library and do it. And even if you could don't all the fees add up to be more than what you would pay to just send the cash? And we havent even factored in that the value may shift 10% up or down in the few days it takes to send and retrieve.
My local bitcoin exchange runs banner ads in Tagalog, targeting Filippina pink collar workers. I was shocked when I first saw that, because I suppose the Filippinas were not that sophisticated. What do I know?
They are getting paid by their employers electronically in yen. So they transfer yen from their bank to the bitcoin exchange, then buy some bitcoin, then send it to their family members back home. Who have to do the process in reverse, I suppose this all happens by smartphone.
You could sell coins in your native currency via a local exchange eg localbitcoins.com( They sell for a premium over exchange prices), so it's possible to scalp a profit in the transaction, or atleast breakeven. There is still arbitrage opportunities available in BTC.
Eg Deposit Yen to a local Chinese BTC exchange. Sell marked up bitcoins in PHP via cash/ personal bank transfer on a local Filipino exchange. Make sure your selling price is more than what you can currently buy them for on the Chinese exchange. Buy BTC at exchange prices in YEN, and then send to the BTC address of the customer who purchased your BTC on the local exchange in PHP.
*Vendors on localbitcoins.com always charge a markup vs the exchange price. They can offer anonymous cash deposit ATM options or direct bank transfer, and are one of the most private ways to purchase coins. So there is always a market for them, especially for customers who only want a small amount of BTC for a one purchase.
"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,225
I thought one of the big advantages was to avoid bank and transfer fees, but now instead your paying different fees.
For example Coinbase's Fees for a US Customer are
0.5% to Buy
0.5% to Sell
U.S. Bank Account 1.49%, with a $0.15 minimum
Coinbase USD Wallet 1.49%
Credit/Debit Card 3.99%
So to use coinbase to transfer bitcoins it's going to cost you a minimum of 1.99% and potentially the person you are transferring to them same again.
I'm not sure about US bank fees, however, in New Zealand & Australia a typical bank would charge a minimum of $15-20 for any international money transfer, plus they will scalp you on the conversion rate. If you are only sending a small amount, eg $100, then it's like a 15-20% fee. I imagine Chinese workers sending money to the Philippians, would only be sending small amounts each week.
-Coinbase suck
-There are Chinese BTC exchanges that won't charge fees on deposits from Chinese bank accounts.
-I'm talking about sending coins from one wallet to another and then selling in the local currency you are trying to acquire.Vendors on localbitcoins.com scalp transitions doing this.
"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,409
Thanks Received: 10,225
Excellent points @Neo1. I was thinking of larger sums. If we say coinbase is 2.5% and wire fees are $25 then coinbase is cheaper than wires for anything under $1000 which is probably a lot of the people you were talking about.
"The funnelling of the yuan through bitcoin comes as the Chinese government and its regulators have in recent months moved to restrict the outflow of capital from their communist coffers over concerns it could destabilise the currency and economy.
To protect against these risks the Chinese government has imposed tighter restrictions on individual citizens, allowing them to move only $50,000 abroad each year.
The Chinese government has also limited other channels for moving money abroad, including purchasing insurance or real *estate.
Global restrictions on sovereign currencies are playing a major role in driving increased bitcoin demand according to Sam Lee, chief executive of Blockchain Global and developer of Australia’s largest bitcoin exchange."
Old article( Jan 17), but it explains why the Chinese are using BTC to transfer money overseas. It's not even to do with BTC transfers being cheaper than banks, it's that the Chinese government has started imposing strict capital controls on the RMB( YUAN). The majority of BTC volumes comes from China, so it's also a good explanation for BTC's current run.
"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
BITMEX looks VERY interesting for day trade / scalp.
It has several types of Futures Contracts for the leading crypto currencies. Liquidity and volume appear to be growing fast, as well as, it appears, institutional traders are just starting to pay attention (my observation).
testnet.bitmex.com for simulated trading (reduced feed)
The Bitmex web trading interface is not good for day trading, BUT Sierra Charts does have a BITMEX interface, and from first testing it looks solid.
I sure wish NinjaTrader had an interface because that is where all my indicators and autotrading are, and I for sure don't want to port the huge amount of code to a new platform.
If anyone has experience with Bitmex live trading, perhaps you can share your experience on fills, slippage, ease of fund transfers, stability of the back end, et cetera.
Also, I understand that CME is in the process of setting up Bitcoin Futures, and if so, the feed may be available through the normal Futures brokers. But, no time date yet.
Meanwhile Bitmex is now, and live, and appears to be run by professionals.