10 Mai 2019

Bitfinex Credit Premium – Daily Market Commentary, May 10, 2019

Patrick Heusser

Patrick Heusser

Senior Trader bei Crypto Broker AG

Über den Autor

TGIF – Because when I woke up this morning, I was puzzled by the move of the Bitfinex credit premium.

A quick recap:

When the news broke that Bitfinex was not able to access USD 850 mio, which they handed over to their contractual payment processor, their credit premium exploded up to a high of USD 360.

We stayed up there for over a week, also during the court hearing when both parties (iFinex and NYAG) presented their documents to a judge, and even after they announced their LEO token pre-sale, which will cover their liquidity shortfall of USD 1 billion.

Over the past three days, their credit premium collapsed from USD 360 to 80. And not due to any particular piece of news.

The closing date for the pre-sale of the LEO token is the 11th of May, and so far we have not seen any official reports that would indicate that they have raised the needed USD 1 billion yet.

Maybe we have missed it and they did, but we see this as rather unlikely.

Here is the chart of the Bitfinex credit premium:

In addition to that credit premium, the BTC$ margin shorts exploded. We thought this made sense due to people with BTC on Bitfinex trying to do a quick hedge and sell them in case the market tanks due to the troubles Bitfinex is facing.
Those margin shorts did not get reduced during the credit premium sell off. Which leaves me puzzled again…

Here is a chart of margin shorts on Bitfinex:

One thing is for sure, this market will not get boring anytime soon. Let’s see what weekend trading will bring.