Counterparty risk and risk of extreme volitility in underlying are both very hard to estimate for crypto shenanigans. There’s also the chance of wiping out your principal with mistakes.
It seems deluk is investing with Bitfinex (blocked in US), which has lots of ongoing issues; see Patrick McKenzie on why the whole thing is a fraud that is down several hundred million and is likely to seize accounts https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/.
IIRC some individual investors in Binance (also supposed to be blocked for US investors) were being targeted for investigation by CFTC; there’s an aspect of lending that lead to Know Your Customer violations (very hazy on specifics).
The exchange is mentioned in the OP and is not Bitfinex. Putting on this trade by shorting MicroStrategy and holding bitcoin is problematic if your broker doesn’t let you use your bitcoin to collateralize your MicroStrategy short.
Use isolated subaccounts, so that risks from trades in one account won’t affect the other accounts (although they’re still correlated). Whenever I set up a new long C + short C-PERP trade, I make a new subaccount.
Counterparty risk and risk of extreme volitility in underlying are both very hard to estimate for crypto shenanigans. There’s also the chance of wiping out your principal with mistakes.
It seems deluk is investing with Bitfinex (blocked in US), which has lots of ongoing issues; see Patrick McKenzie on why the whole thing is a fraud that is down several hundred million and is likely to seize accounts https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ .
IIRC some individual investors in Binance (also supposed to be blocked for US investors) were being targeted for investigation by CFTC; there’s an aspect of lending that lead to Know Your Customer violations (very hazy on specifics).
A legal way to put on this trade is to short MicroStrategy (Co that bought bitcoin) and buy bitcoin yourself. https://www.coindesk.com/microstrategy-bitcoin-michael-saylor-valuation
The exchange is mentioned in the OP and is not Bitfinex. Putting on this trade by shorting MicroStrategy and holding bitcoin is problematic if your broker doesn’t let you use your bitcoin to collateralize your MicroStrategy short.
Use isolated subaccounts, so that risks from trades in one account won’t affect the other accounts (although they’re still correlated). Whenever I set up a new long C + short C-PERP trade, I make a new subaccount.