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Bitcoin Parabola Not Enough? Here Comes Bitcoin Opportunity Fund... This Time With Leverage!
With Bitcoins changing digital hands for over $260 this morning, having doubled in a week (and exponentially risen in weeks), many have asked how to 'trade' or 'short' this virtual currency. Well, perhaps the answer is here. As TechCrunch notes, Coinsetter - a NY-based startup looking to launch a trading platform for Bitcoin has raised $500,000 in seed capital. The platform will allow leverage (via margin) and the ability to short the market. We can only imagine the hour-by-hour margin changes. Furthermore, Coinsetter intends to offer accredited investors (because wealth equals smarts, right) the ability to earn interest on Bitcoins. To put his money where his mouth is, Lukasiewicz, a former JPM investment banker, has said that he will "put up at least $50,000 of his own money towards the platform's initial margin reserves." Forget NFLX; Ignore FNM; day-trading Bitcoin with leverage is the new normal. What's the opposite of catching a falling knife?
Short this...on margin...
Via TechCrunch,
Today, Coinsetter, a New York City-based startup looking to launch a new Forex trading platform for Bitcoin, announced today that it has raised $500,000 in seed capital. The round was led by Tribeca Venture Partners and SecondMarket founder and CEO Barry Silbert (through his Bitcoin Opportunity Fund), with participation from angel investors like Jimmy Furland, a London-based technology entrepreneur, Microsoft Head of Corporate Strategy, Charles Songhurst, and Facebook Product Lead, Ben Davenport.
...
Coinsetter, on the other hand, is one of many that see opportunity in applying familiar market practices to the wild, wacky and virtual world of Bitcoin. With its new funding in tow, the New York City-based startup plans to launch a Forex trading platform for Bitcoin, specifically one that allows people to make leveraged trades on margin and short the market. While these practices are available in all mature markets, says co-founder Jaron Lukasiewicz, “they’re virtually absent in the Bitcoin space.”
Coinsetter wants to make Bitcoin more accessible to both mainstream and institutional users by focusing on security, transparency and by offering a simple user experience. On top of that, the startup plans to launch an ancillary arm that will offer a “scalable solution for accredited investors and institutions to earn interest on their bitcoins,” Lukasiewicz says.
...
To put his money where his mouth is, Lukasiewicz, a former investment banker, has said that he will “put up at least $50,000 of his own money towards the platform’s initial margin reserves,” as reported by The Bitcoin Trader. The article goes on to point out that, while promising, Coinsetter isn’t the only service looking to offer margin trading.
There’s also the steadily-growing, Hong Kong-based Bitfinex as well as ICBIT.se, both of which have been around for some time.
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That article is completely incorrect. Legal Tender means that not only the government accepts it, it means private parties are obligated to accept it to extinguish debts as well.
Can you provide a link? I would like to read further on the topic.
Does bitcoin have an army?
Yup, with 2 branches: Max Keiser and the Bitcoin Crusade, and the Mining Pools.
Bitcoin folks- just fucking cash out. When they are looking to implement the same rules as the current casino we have, well you know the story. They will pump it up some more then burn this bitch to the ground. They will teach all bitcoin buyers a lesson for fucking with the bank.
You will not teach the ones who sell out for more than they paid.
what about that part of everyone taking delivery?? if it's not in the blockchain, it's not real
Lukasiewicz = Polish Jew?
I fail to see the relevance of your question. But can you confirm (with source) that the family name of the George Lucas was indeed Lukasiewicz? Just curious.
One can already speculate on bitcoin using 1:10 leverage
https://icbit.se/futures
How do we short this opporuntity. Is there a short ETF at 2x that I can buy.
someones missing the point, (maybe me) opening a options market benefits the sellers of those options, who can use their position to hedge big moves (according to Greenspan the use of said derivatives makes the market safer) a major corporation doing business in a foreign country needs to hedge or insure their exchange rate over a period of time.
http://lewrockwell.com/rosenberg/rosenberg-p14.1.html
Great link, thanks
s/b required reading before making a bone head ignorant post
Madoff is behind this.
Madoff was a hack in comparison to what's going on these days. He's in jail for defrauding the wrong people. Too bad he got caught when he did, before his job was done, as it would have rebalanced the thievery a little bit. Like nature recycling water.
The idiots are out in force, today. Rooting for the thieves now, are we?
Next up: bitcoin derivatives.
bitcoin CDS valued in litecoins.
https://www.spendbitcoins.com/places/ *sigh*
You guys can buy all the bitcoin you want. I'm going where the next real action is: tulip bulbs.
Okay, stupid question time. When I buy into Bitcoin, who am I buying it from? Or in other words where is my money going? I am having a very hard time seeing how Bitcoin doesn't collapse
https://mtgox.com/
The price is determined by open bid/ask type auction. Mt. Gox handles many millions of dollars in bitcoin exchanges each month.
https://mtgox.com/
The price is determined by open bid/ask type auction. Mt. Gox handles many millions of dollars in bitcoin exchanges each month.
Pls go to a shop, i.e. a real shop, not some webshop based that only "sells" some non-tangible internet bullshit and try to buy something with a bitcoin... WAKE UP
http://coinabul.com/
what color clown shoes do you wear?
Leave it to an investment banker to start manipulating an index as soon as it becomes popular. This is why our Main Street economy can never recover under the control and guidance of Wall Street. This is the only kind of shit they know how to do. It's the modern version of selling snake oil. They may be good at it, but, so what? Who really needs it? What value does it serve? How far and wide would you have to look to find one of these types who has ever developed, built, or produced anything real? I bet you’d be hard pressed to find one who knows how their toilet works, or the difference between a phillips head screwdriver and a drill bit.
Your post is so full of ignorance. Hedging serves real needs and makes society wealthier.
this bitcoinbusiness is complete bullshit.
It will not become a method for paying, it will not become a durable store of wealth, it will not become a new currency.
it is pure speculation, and if it becomes more than that, the banksters will speculate in into oblivion. the only thing to do. make some profit and get out.
It's hard to believe that so many people here on ZH are just like liberals - too fucking stupid to see their nose in front of their eyes.
So, you can predict the future? How many fucking multi-million dollar lotteries have you won, exactly? With your awesome ability to predict the future, you should be winning every week.
told you so...
I need a bitcoin tutorial and I think only ZH could give a comprehensive no questions asked report for dummies like no other.The only things I am interested in is:
A) Can the currency be created or digitized out of thin air possible?
B) Is being a viable threat to fiat currency because there is no central bank issuing it?
C) When would governments make it illegal across the board to trade/barter in bitcoin?
Once the genie is out of the bottle and any notable online retailer begins accepting bitcoin how many poops do Central Banks have? If fiat currency is solely a trust based system anyway and Central Banks have no credibility because they artificial inflate their paper why not have faith in a currency that cannot be expanded? I have heard new Bitcoin is created though "Bitmining" but from what I understand actual work is (Production) occurs in order to manufacture new BitCoins.
I know how it works exactly, its bullshit.
best thought I've seen on this thread
The opposite of catching a falling knife is standing in front of a freight train.
All the trolls, dumb questions and smart-ass remarks aside, one of the real questions about BTC prices is a very practical one:
How the heck are you supposed to have viable conversion rates between BTC and real products & services, if there is no price stability? E.g. If an Amazon book costs $10, but the BTC keeps climbing at the rate it does, will the BTC get adjusted in real time? Well, will they?
Can you say Arbitrage Opportunity?
Wow.
Guess that's whay the $1200 Nvidia video card is sold out on NewEgg.
Maybe if I start mining a Bitcoin right now it wil be worth $100k by the time I actually get one.
Nope - you mean the ATI cards from 2009 the HD 5870 and the HD 5970 are hands down the best ones. They will become buggy whips very soon as butterfly labs starts to deliver product. Love watching creative destruction and the real market work its magic.
https://en.bitcoin.it/wiki/Why_a_GPU_mines_faster_than_a_CPU
http://www.butterflylabs.com/
Let the battle begin..... Bring it bitchez. At least the field is level. Can't say the same for that etf stock market now can we.
Bitcoin is already associated in a very very negative way by law enforcement with the "Sovereign Citizen" movement. Given the hop, skip, and a jump the law enforcement community is making to smear just about about anyone who expresses mistrust in government, rather than the wacked extremists, the bitcoin servers could eventually be seized as part of law enforcement activities. Take a look at file sharing of music, for instance. While the proliferation has gone in other directions, entire global companies were shut down, plug pulled, nearly overnight.
Good luck with that bitcoin in the short term, you are to be congratulated for your risk/reward tolerance. Long term? Prepare to take the consequences "law enforcement" is setting up to rope you in. Oh, and did I mention the IRS? Bitcoin profits not taxable? Lemme know how that works out long term...I love the disruption, don't get me wrong, but I also love flying relatively under the radar as much as possible.
Think it through please: Everbody's PC can be a server. And the Web goes beyond any one or group of nations. You'd have to shut down the entire internet over the entire world, forever. You know what that does to the economies and the wealth of TPTB?
"If you can't beat them, join them" is what will happen. HSBC: "Your DNA will become your data".
For their version of Bitcoin. And then you won't be able to buy or sell, w/o them tracking things in real time, policing and taxing in real time. Welcome to 1984. Savvy?
https://upload.wikimedia.org/wikipedia/commons/4/49/Building_a_Rural_Wir...
As long as the electricity is on you can still function on a small scale. Or plan B mobile based FidoNet for the 21st century in a decentralized manner. That can be appd together fairly quickly for mobile phone using the wireless bands. As the parasites evolve so do the hosts. Cat and Mouse, tit for tat innovation and creative problem solving pushes the world foward.
I did think it through, and I see limewire written all over this thing but for different reasons.
http://www.guardian.co.uk/technology/2010/oct/27/limewire-shut-down
Bitcoin is nothing without software. Stop the software and there is no bitcoin. Stop the exit of bitcoin into reality and the deposit of real money into bitcoin and there is no bitcoin. What part of that have I got wrong?
Either way the end result is the rigged market is going to be ultimately dropped like a bad habit at some point if the field isn't rigged elsewhere. Besides once you do this the SEC is going to step in to regulate the fuck out of the exchange to favor the big boys, they can't regulate the network but can regulate the exchanges that want to operate legally in their jursidiction. Reality is all the coders just need to upgrade the software to block this and it is nipped in the bud. Open source bitchez. Ball is in their court now.
Heh like I've said elsewhere the minute this got big the full out onslaught would ensue to try to kill it. Fun times ahead. At least free markets are exciting in a good way. Fair competition is always fun.
Regulate is one issue. Enforce is another. Maybe that's where the new Data Center in Utah comes in: So they can record & prove your illegal actions, if you chose to not self-report and they decided to audit you on a random or targeted basis.
No wonder that even the Mormons are buying up large acreages of farmland outside the US. E.g. S. Am. And with their global network of evangelistos and evangelistas, they serve a multipurpose function (info & intel gathering) for HQ back home.
Note to self: Start a new religion (in the Virgo constellation.) ;-)
Naw they can enforce as long as the exchange is run by a legit company based in the US and/or the exchange server data center it is on is in the US. The second someone codes all this stuff into a client software with no central exchange then the regulatory agencies are fucked. They have to find every trader individually to monitor it and or collect their tribute on trades.
Good point. Which is why Coinbase and Flexcoin make me very nervous. If you read their web pages on who they are, what they do and their Privacy Policy: 1. They are US based. 2. They track your real ID & coordinates, are totally integrated with US banks (pass on marketing info), and 3. are totally compliant with US LEA's. For a 'small' fee they provide 'instant gratification'. Big whoop!
As such, I fail to see their value add. To me they seem no different to a Credit/Debit card, but with extra work and overhead on my part. Screw that! As I fail to see their Value Proposition, I've decided to avoid these 2.
... comes on line?
Feel the power of this fully operational deathstar.
IBM shares on sale at less than 1 bitcoin. GM is 10 for 1. Looks to me like stocks need to move a lot higher.
hmmmm
AAAAAAAAAAAA Can you pls stop posting Bitcoin bullshit.... It's just some time jacking exercise for computer nerds
McLuhan said, in the 60's, that the automobile did more for civil rights, than any political legislation. in a democratic economy, which is what bitcoin creates, it's more likely that the money the Fed wants to get into private hands, will actually get there, and jumpstart economic growth and development. some future analyst may say, bitcoin did more for economic freedom and access, than any fed policy, but they're not fundamentally opposed...
Not sure about leverage and shorting bitcoins. I think it will need to be in relation to fiat. It will be difficult to leverage with bitcoins which is one of its pluses. The Fed can provide leverage with printing dollars......but bitcoins? Not sure. No one can print bitcoins.
I am assuming an honest exchange. He he he. We will see how the creative types get around these two limitations.
BitCoin = Fiat
Value is what the market thinks it is. Speculators can make or break it.
Ctl Alt Del
BitCoin is fucked.
Coinsetter is a funded NYC-based levered forex trading platform for bitcoin. We allow you to leverage your trades and short the market with our professional, transparent and secure platform.
there are a few words in this paragraph that scare me:
NYC-based
Professional
Transparent
and Secure.
Didn't Jon Corzine use those words?
You forgot one. US District Count, Southern District of Manhannan will be the jurisdiction.
Bitcoin FX futures are the place to be! For those whose balls dangle to their ankles because there is a barrel of TNT strapped to each one of them.
Yey, we'll all be rich! Untouchables in India will be driving Bentleys, they'll be selling lobster dogs with truffles at the ball park and Walmart will be selling Patek Philippe watches. Hot damn, I'm excited....
The oppsote of catching a falling knife is sitting on a rising shaft... duh.
Stupid question: how are bitcoins 'created'? There's no ctrl-P associated with them.
Yes, but they are infinitely divisible ... shafted again!
They can try to short this shit all they want. You people keep thinking only on the demand side and in dollars. Let me illustrate a point about deflationary currencies.
Let's say I buy in at $100 to 1 bitcoin and then exchange gets smacked down to $50 to 1 bitcoin. I lose 50 dollars on a straight up exchange from bitcoin to dollars. I am a vendor selling goods and I have something priced at $1 with the 100 to 1 ratio that is 1D to .01BC. Bitcoin gets smacked down but the price of my good is still $1. It now costs 1D to .02BC at a 50 to 1 ratio. As a consumer I still win since I can still buy that good since relative value didn't change. Instead of wanting to turn my coins to cash I either save them hoping they go up or spend them at a store. Either way the store and the consumer wins since purchasing power is not diminished. Inflationary fiat currency is a hedge against deflationary crypto-currency when it comes to purchasing power. The vendor and consumer wins either way. I can take that good and try to make my $50 back later on somehow. Short away bitchez. You can't break the purchasing arbitrage that easily when a vendor accepts both for goods. Shit even the vendor can then hold the coins and try to profit on top of their standard margin they would get. You guys are just too narrowed minded. Once the vendors accept coins en masse you can short the fuck out the thing it won't kill the purchasing power. Ying and Yang it works as fiat gold standard in stabilizing relative pricing when used in this manner. The businesses are the next check. You know the small guys will be hip to this and price off the grid in both if the governments try to kill businesses from using both legally. It teases money out of the wallets and back into circulation which is what they want. It creates velocity and spending. Short away bitchez. At the end of the day it doesn't really matter where I buy in if I am not looking at them like a stock market investment but as a facilitator of trade and a medium in which to use to do it.
The businesses that accept both as a form of payment are going to see their sales ramp upwards as things get worse and more people get spooked as the SS Central Banking System Titanic keeps getting closer to the iceberg. In the beginning the smaller guys and tech savy people will make it work and will be the big winners on the business side when targeting the right items towards the right demographics. Besides it costs you nothing to set it up and accept payments. The smarter guys will get it and adapt the slow moving dinosaurs will get predated as the push happens. This type of setup will keep people from being poor as fuck in Europe in their local economies if the businesses implement it. Preserves purchasing power if the Euro inflates or deflates and if the exchange on bitcoin to Euro gets smacked down or ramps through the roof.
Mr. Spock approves of your "...rational and logical argument, even if embedded with human emotional imagery -- which is presumably used for emphasis or effect." Kirk out.
Ye, lets pump BITCOIN some more. The bankers really need to know if their global electronic currency is viable before they shut down the individual country central banking operations.
The opposite of catching a falling knife is to sit on a barn nail and have an anvil fall on your head.
So why can't bit coin currency limits be sidestepped by producing more systems called Bitcoin v2, v3, etc.?
They can, it just needs an entity behind it that has products that are in high demand. Walmart, McDonalds, Exxon, Apple, AT&T, etc.
Crypto-currency has been around at least in theory since 1995.
https://bitcointalk.org/index.php?PHPSESSID=fhrq5k8i11n1l8cmu6tlu84cc5&t...
MAJOR:
-BTC Bitcoin - first, strongest, most accepted, most mined, high volume market, a true currency
-LTC Litecoin - second only to BTC , faster than BTC, Small efficiency gap between GPUs and CPUs , ASIC - proof
-NMC Namecoin merged mined with BTC, used for alternative p2p domain system
MINOR:
-PPC PPcoin Proof Of Stake [very innovative, low energy ] , compatibile with BTC miners
-TRC Terracoin based on BTC, fast difficulty adjustment - miner-jump resonance resistant
-DVC Devcoin merged mined with BTC, 90% of generation goes to foundation, 10% to miners
-IXC IxCoin merged mined with BTC, premined 580k coins but still alive
-NVC NovaCoin - scrypt hashing[like LTC] , proof of stake [like PPC] , controversial
-FRC Freicoin back alive. 4.89% anual demurrage. for the first 3 years 80% block subsidy goes to foundation, 20% to miners
NEW:
-Bytecoin- the 1:1 bitcoin copycat. really bad difficulty adjustment for altcoin, extremally high hashrate for that young coin.
DEAD / DYING :
-LQC Liquidcoin made to be very fast at constant difficulty, dead [pool closed, exchange closed]
-SC Solidcoin - dying (10-20% fee), designed to improove IxCoin, hard to be neutral on this one, 1.0 was a premine scam, 2.0 says BTC is pyramid scheme.
-GG Geist Geld experiment on BTC algorithm, how fast can it go? just for sience.
-TBX Tenebrix great idea of cpu-friendly mining with scrypt, but premined with 7.7milion coins - alive but little support due to premining
-FBX Fairbrix - Tenebrix without the premine, bad launch, alive but little support.
-I0C I0coin - ixcoin without the premine. Dead
-CLC Coiledcoin - some nice ideas, but killed in 51% attack
-RUC Rucoin - copy of bitcoin, only difference is that is developed in russian not english. reborn much different, not confirmed if it is the same blockchain, both scrypt[like LTC] and sha256d , nice client !warning! not opensource !
-TimeKoin - PHP webbased coin, alive but not used or traded.
-Beertokens -abitious [impossible?] try to stabilize price against commodity.
-BBQ BBQCoin - killed in 51% attack on launch, now revived and looking good
-MMM MMMcoin - Dead coin by notorious scamer SPMavrodi, named "yes we can" "my mozem mnogoye"
NOT A COIN / NEVER FULLY LAUNCHED:
-DigiCash - historical try for digital curency by David Chaum, failed. http://en.wikipedia.org/wiki/DigiCash
e-cash and e-money are part of / continuation of digicash . Possibly where Bitcoin came from.
Ripples (XRP) - http://ripple.com , no mining - all coins available at start 80% foundation, and 20% develeopers. centralized, not opensource. not designed to be a currency, but an IOU exchange. Very innovative and usefull, but "not a coin"
Amazon Coin - centralized private scrip launched by Amazon and pegged to USD, not cryptographic at all, just a name.
WEEDS never realy active and now dead - https://bitcointalk.org/index.php?topic=24209.msg300830#msg300830
Groupcoin - still alive but never realy active https://bitcointalk.org/index.php?topic=24813.0
Opencoin - opensource version of digicash, opencoin.org , not launched yet
RealPay 100% coins at start, centralized, never realy launched ,site is dead https://bitcointalk.org/index.php?all=;topic=62565.0
-Qubic - coins are produced at the rate determined by quorum of miners, not set by developers. Never launched.
These currencies work on the basic principles of demand side economics when it comes to pricing. The supply side is essentially fixed. They grow at a fairly fixed rate determined by the algorithms until the a max number of coins are generating. It is purely deflationary from their on in. The more demand the more they deflate against inflationary currencies like the USD. You price in both no arbitrage is achieved as far as purchasing power goes. Doesn't matter which currency you use when buy in or the exchange at that time as long as the price of the goods and services stays relatively stable based on one pricing. You can still save and grow wealth on either side with a little skill while not seeing your purchasing power get hammered by a central bank. Also allows the vendors to set arbitrage cash/credit pricing or give a break since using bitcoins you don't have to collect a swipe fee for a debt/credit card purchase.
+100. Your factual case is starting to impress even Mr. Spock. ;-)
Seriously though... your info is consistent with the argument that one Bitcoin expert told me:
1. Cyber currencies, of which Bitcoin is the most popular (for now), will coexist in the cyber and currency ecosystem. Some will rise to preeminence (Bitcoin), others plod along, and some fade away and die.
2. TPTB can never hope to wipe out the cyber currencies, but only hope to contain, limit or regulate them -- to keep them from threatening their own currency system. And to tax them if possible.
3. For now the cyber currencies offer the financial freedom that the early days of the internet offered in information freedom. It has democratized money. Which is why, in part, it is gaining viral popularity: FREEDOM!
4. Viral Adoption Rates are not the same as a bubble, as in a bubble the growth in money supply that far outpaces growth rate of asset supply. E.g. Dotcom, Housing bubbles. Many people do not see this subtle but important difference in a natural Viral Growth vs. Bubble growth, having already made an emotional decision against Bitcoin beforehand. An emotional decision, that clouds their logic.
On his #4 I see people 'wired' differently. The way pioneers, explorers or entrepreneurs are wired different from accountants, farmers, teachers or cops. In marketing speak, the Early Adopters of cyber currencies are the modern explorers, pioneers and entrepreneurs. The Late Adopters are the very conservative segments that adopt new things & ideas only after almost everyone else has and most of their peers have. It's just reality of human nature. What's funny/ironic, is that most Bitcoin-phobes cannot bring themselves to say "... and besides, I'm a Late Adopter".
Slight correction since I spoke too soon, you'd need to price in a major ramp down or up on the exchange into the products to keep parity. You just discount it down if the exchange rate stays the same. It is doable with a pricing strategy and some creative marketing. Either way you have a lot of leeway in pricing especially if you sell directly to the customer. Business to business transactions is another story.
Serious Q in math-speak: When is a price increase not a bubble, nor a runaway parabolic, but a nonlinear approximation to a step function?
In other words: If there is price discovery in a free market -- that reflects mostly real demand and not just a sizable speculation element (that will eventually get "corrected") -- then it is legitimate to expect that price discovery can have a form that nears a step function: From level A to level B.
This is no different that how any stock or derivative behaves. I suspect that were are seeing a sizable step-function, and not a runaway parabolic that many BTC-phobes are seeing.
"What's the opposite of catching a falling knife?"
Getting impaled, Vlad Tepes-style.
buying opportunity!!! someone just dumped 700+ @ $200
was that Blythe?
The code for Mt. Gox's trading platform would have to be changed to accommodate new hardware...
URGENT!...
:D
Bitconners want to catch falling knives while having the rammed upward to the rectum? Wow, I've heard of some perversions but really.... when fluctuating & rigged markets of silver look like granny-nap time to you, by all means, hop on the bitcoin rodeo & see how many nanoseconds it takes to go bankrupt!
If you can't admit to the elephant in the room - literally trading vaporwarez - then have a ride on it