Coinbase Pro Disables Margin Trading (opens in new tab)

I made a trading bot that was moderately profitable, until the exchange it was using got hacked and lost all my coins :/

Edit: The source is available if anyone's interested. I intended to do more with it, but lost steam after I lost my coins. https://github.com/nfriedly/Coin-Allocator

To answer your question: Yes. The volatility is a trader's dream.

I've been holding a sizeable Bitcoin position[1] since 2011, but I'll acknowledge you can make a killing trading in bull markets or crushing bear markets.

[1]: https://news.ycombinator.com/item?id=2612486

Yes, but don't waste your time with American exchanges, the regulations are too burdensome. Bitmex actually maintains a high score section, a lot of people are doing extremely crazy things trading in the crypto space https://www.bitmex.com/app/leaderboard

I had Bitcoins in 2013 back when it was $50 and then lost them daytrading on margin at BitFinex. Would have 500x my money in several years.

Listen the rule is simple:

1. After a crash, buy BTC and just forget about it until some alert that BTC has exploded 5x or more

2. If BTC had a big run up, buy ETH instead

3. If ETH had a big run up, next buy XRP

4. If XRP had a big run up, then escape into tethers and wait for crash

Repeat :)

If you did this sequence the last few times then ONE bull run nets you 5 x 5 x 5 returns!

Yes. Just look at the 3Daily chart of BTC/USD. It's absolutely bonkers

Weirdness is good. If the market is weird, it means people don't know how to exploit it, i.e. you actually have a chance of finding an edge that hasn't been exhausted by someone else.

There isn't a compendium of standard tactics that "work" in normal markets. If there were, they would no longer be profitable. Anything that works is secret & novel, and finding a novel approach to an old market is harder than finding a novel approach to a weird one.

Yeah, created a bot that just trades the 1D MACD on Ethereum on a point & figure chart crossing up. Ridic how profitable this is. Proof is backtest on tradingview.

Nope. But when the volume and volatility is high like it is right now, it can be profitable to be a liquidity provider instead. It's actually very easy to provide liquidity to Uniswap and other decentralized such as Curve.fi - both have bitcoin-paired pools.

I have a friend who had a bot that was front running users when the Kraken trading engine was much slower....his bot stopped working when Kraken updated the engine though.

Lately it's become fun again. Huge swings day to day and even hour to hour

That makes no sense. TFA says

> In response to new guidance from the Commodity Futures Trading Commission

Coinbase has always been trying to follow all the laws and show how "legal" crypto can be. If the CFTC says they don't like it then Coinbase is going to shut it down... maybe they'll try to fight it behind the scenes - but they want to stay online and making money.

If they were going to lie, there are a lot better ways to go about it than blaming a government regulatory agency which probably will be fairly open to saying "Yes, we did ask them to close their margin trades because XYZ"

But why would "liquidity problems" cause outages? It's not like their servers require liquidity to operate or something. It makes much more sense that their servers are going down because trade volumes are up, thereby causing server load to go up.

Where did you read this rumor? I'm interested in the details (I know about the downtimes)

This doesn't make sense. Their exchanges are open to view live, you can literally see the books and the available liquidity.

Posting rumors like this without any evidence is irresponsible.

Stupid people think margin trading is easy money and will lose that in the blink of an eye.

And stupid companies? They’ll do the same thing but take all their employees and affiliated companies with them.

This was downvoted but it's actually true. Most volume is speculation driven and every speculator prefers the less regulated high leverage derivative venues. Regulations have hurt Coinbase's volume in the exact same way that Japanese regulations almost killed Bitflyer. The biggest exchanges are now mostly Chinese - Huobi and Ok.

Just so you know, margin trading is very accessible in the "old world" haha. It just applies to, you know, assets.

It’s about controlling risk. Think of 2007/2008 bank collapse when they played with fire and were leveraged 30 to 1.

Check the blog again.

I could see it being the case that this could be in part problematic because it could interfere with their anti-theift/fraud mechanisms. If you are mandated by law to pay out the full amount immediately with no strings attached. An attacker could (idk much about to futures markets so maybe I'm wrong) make a super short term trade that forces them to take possession of the coins as a way to bypass withdrawal security.

>Margin trading and investment Bitcoin storage don't belong to the same institution in my view, unless there's a clear separation of ownership in a case of bankrupcy.

What's the concern here? That someone will buy bitcoin on margin, withdraw all of it, and then declare bankruptcy?

Are they though? If not, what lets kraken continue?

Isn't this only a concern when dealing with futures/options? If you're just buying bitcoin with borrowed money, the counterparty is just the guy lending you the money (coinbase).