Chapter 733 - 306: Jiang Banxia’s Heart Flutter
For Li Yang, it’s like playing a great hand.
Hiding behind Jiang Banxia, living quite comfortably.
On Chen Peipei’s side, multiple accounts are operating US stocks funds, and at the same time handling contracts for him on the Bitcoin platform.
Last year, Bitcoin soared to over eight thousand US Dollars, fell to around five thousand by the end of the year, and now it’s over four thousand US Dollars.
Li Yang has absorbed a large number of short contracts, holding them to keep his position secure.
After all, the people selling the contracts only need to repay the funds, they can repay at any time, and there’s always someone to take over. The contracts that Li Yang has absorbed, even if held for two years, have nothing to do with others.
For various reasons, Chen Peipei didn’t show him the data this year, and he wants to inquire about it, because such a market is rare. If missed, the biggest loss is his own.
After Chen Peipei finished talking about the general data, Li Yang didn’t want to waste her time any longer but began to consider this matter.
The contracts Chen Peipei absorbed weren’t much, only four billion US Dollars.
It’s known that contract trading has hundreds of billions of US Dollars every day, and accumulated over time, contract amounts have long broken five hundred billion US Dollars, but some funds are leveraged, and currently, the platform’s account funds have exceeded one hundred and fifty billion US Dollars.
Chen Peipei could only absorb this much because she could only pick up bargains without being too aggressive. Otherwise, there would be a phenomenon of contract price inversion.
Even though it started last September, not many contracts were absorbed.
The average price of the contracts was around six thousand US Dollars, especially recently, the short contracts have been increasing, and Chen Peipei has absorbed quite a few.
Li Yang is not content with just this small amount; he plans to take on something big now while everyone else hasn’t noticed yet.
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There are still many Bitcoin platforms on the market, including well-known ones like Binance, OKEx, etc.
It’s just that their platforms have low risk resistance and have been forced to shut down several times due to sharp rises and falls in Bitcoin prices, resulting in lower credibility.
Currently, about ten platforms share two-thirds of the market share apart from Huobi.
Their user base is too small, and contracts can’t achieve perfect hedging.
To keep contract trading going, their platforms must use some of their funds for hedging.
It’s simple, their platform only has five people, assuming each person has the same funds, then three people go short, and two go long. In this case, the contracts are unequal and cannot be executed, so the platform has to use its funds to go long to ensure contract trading can proceed.
So as soon as Bitcoin prices drop, the money lost by the two going long is not enough to compensate for the profits of the three going short.
Thus, the platform has to lose money.
But the Huobi platform is different; they have many people.
Even if other platforms don’t have half the market share, they can have five people, while the Huobi platform has at least a hundred people.
Even if fifty-four go short and forty-six go long, there appears to be a gap, but the gap ratio is very low in reality.
Moreover, as contract volumes increase, they extend the timeline, and in the timeline balance, a higher error tolerance rate is generated.
A contract has a half-second error tolerance, and under the buffer of millions of contracts, it can still proceed in an orderly manner.
Those platforms, in order to survive, think of ways to open contracts on the Huobi platform as a hedge for their own platforms, just for that pathetic handling fee.
They haven’t thought about targeting Huobi, especially when Bitcoin prices rose last year, and contract transaction amounts doubled. They were all extremely envious.
But they found Huobi was too stable. No matter how much Bitcoin prices soared or plummeted, it didn’t affect their trading.
Behind it, there seemed to be an unseen hand always operating smoothly.
Moreover, they didn’t have enough money in their hands either.
But that’s all in the past!
Now they have funds!
A mysterious benefactor provided them with twenty billion US Dollars, instructing them to maximize the leverage and smash down Huobi’s Bitcoin contract prices.
The leverage provided by current Bitcoin platforms is typically three times, six times, or ten times.
Some offer twenty times or even a hundred times, but those are rare.
After all, a hundred times leverage means that if there’s a one-point loss, the account funds are wiped out. In a market as volatile as Bitcoin, one point can’t even give the system time to forcibly close the position.
They can roughly guess the purpose of the twenty billion US Dollars, mainly to cause the contract price to plummet, thereby affecting the real-time trading market of Bitcoin.
Although contracts and spot are considered two products, there is ultimately some correlation.
If it’s just an inversion of a few points, it’s within the reasonable range.
But if it inverts by dozens of points, that’s abnormal.
So if they can smash down the contract prices significantly, the spot market will definitely be affected, causing panic among Bitcoin holders.
With a twenty billion US Dollars leverage at ten times, that amounts to two hundred billion US Dollars. If they release it in one day, they can shatter the Bitcoin contract prices.
They know that this price won’t last, and can likely only influence it for a few days.
But it’s enough time for their patrons to buy up in the market.
So, after deciding, several platforms decided to take action that night.
The tasks arranged by the patrons must be completed because the other party is a big shot on Wall Street and promised that as long as they cooperate this time, Wall Street could invest in their platforms in the future.
Only if Huobi falls can these small platforms survive.
Even if they know Wall Street is trying to acquire low-cost chips in the spot market, they have no intention of going to war for those chips.