This is why I have not yet shorted Bitcoin. (The story is counterparty risk, because if I'm right, ecosystem folds ~simultaneously.) https://twitter.com/Bitfinexed/status/925118751007301632 …
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(The most reliable option I know of is Cumberland Mining, a DRW subsidiary, and I'd suggest substantial due diligence before trying that.)
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This was a subplot of The Big Short, because everyone who had the right opinion regarding the housing market -- that it was going to zero --
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had approximately correct views regarding their counterparties' exposure to the housing market, and thought they would implode.
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Note that this belief is "If defaults on a material segment of residential mortgages exceed 10% then e.g. Bank of America ceases to exist."
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Bank of America is a Real Company (TM) with ~200k employees and at least ten billions-of-revenue lines of business and it was screeeeeewed.
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Returning to Bitcoin: when crypto gets the bass dropped on it, every exchange is going out of business and investors will flee to exits.
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You see this happen in microscale when e.g. Mt. Gox went under. The order investors were satisfied in was... interesting.
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Replying to @patio11
I feel I'm missing something. You short/borrow BTC for $, and then your creditor goes bankrupt (or completely defunct). Are you saying there's a call on the shorted BTC and you're forced to cover at an unfavorable price, or is there some other problem?
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Depends on the mechanics. If it's options, your counterparty going away. If your $ on exchange as collateral, it's not coming out.
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Replying to @patio11 @cocoaphony
Check out
@ledgerx, though you may not be qualified to trade there.0 replies 0 retweets 0 likesThanks. Twitter will use this to make your timeline better. UndoUndo
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