Chapter 773 - 319: People in Finance All Have Dirty Hearts! (2)

Chapter 773: Chapter 319: People in Finance All Have Dirty Hearts! (2)

All: "..."

...

For others, it’s a mountain; for Jiang Banxia, it’s just a casual acceptance of that stack of chips.

Li Yang said on the side, "Bitcoin has become the opposing position for both of your companies."

The so-called opposing positions mean both parties are engaging in large-scale chip trades, leaving little opportunity for others to participate.

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Jiang Banxia said, "Not really, I’ve shared quite a bit of the profit with others."

"So what’s the plan next? Should we just blow them up?"

The situation is clear now; Jiang Banxia just needs to mobilize another fund to blow them up.

But Jiang Banxia shook his head, "Bitcoin’s price can indeed be easily pushed up. If I invest another twenty billion US Dollars, it could rise over ten percent. But contracts are different. They don’t strictly follow the spot price. They hold too many short positions, not excluding the idea of having spare strength in hand. Even if the spot price rises by ten percent, the contract price might not increase that much.

Previously, it could rise because they didn’t have enough contracts to control the market. Now... once it goes up too much, there will be significant inversion in contract prices, and the market funds will instead become their assistance."

For example, if Bitcoin’s price reaches six thousand US Dollars, the whole contract system becomes imbalanced because Jiang Banxia has freed up a lot of long contracts to make space for the market.

Those long positions will become pressure for the short positions.

Long and short always complement each other. When it’s time to settle short positions, they turn into long positions.

Similarly, the long positions Jiang Banxia holds will someday turn into short positions.

Because there’s not enough buffer for short positions, the long positions will dominate the market. If Bitcoin rises to six thousand US Dollars, long contracts might open at 6,100 US Dollars or even 6,200 US Dollars.

The extra hundred or two hundred US Dollars is the inverted price.

With such large inversion, most long positions will immediately choose to stop loss, as selling equals profit.

Li Yang nodded.

Jiang Banxia continued, "Honey, through our backend data, it’s crystal clear. They have short contracts worth 2,100 billion US Dollars, but essentially, these contracts are only worth 210 billion US Dollars; the rest is all leverage, which, for the platform, is just a bunch of numbers.

Even if we blow up their contracts, what then? We’ll just put this money on the market, and maybe I can eat a portion, make over a hundred billion US Dollars.

But what if they are unwilling to give up?"

With Jiang Banxia’s words, Li Yang suddenly realized a point he had always overlooked.

Interest!

Leverage financing comes with interest, even if the so-called funds are merely a string of numbers given by the platform.

But interest must be paid!

Only most users either don’t use leverage or use it at two to three times. Only a very few aggressive ones choose ten times leverage, although some interest is generated annually, compared to transaction fees, it is much less.

For instance, last year, the platform collected less than six billion US Dollars in interest.

The main issue was Bitcoin prices were too low!

If Bitcoin prices rise to several tens of thousands of US Dollars, ordinary retail investors can’t afford it, so many would use leverage; tenfold would also appear in batches.

Huobi Platform’s interest is calculated based on funds: small funds have a rate of one in ten thousand, one US Dollar interest per day for ten thousand US Dollars.

Large funds have a rate of three in ten thousand, one hundred US Dollar per day on a million US Dollars.

Equivalent to an annual interest of 10.8%

They applied tenfold leverage, of which ninefold is borrowed funds, paying over two hundred billion US Dollars in interest every year.

Jiang Banxia has never thought of earning their principal, only aiming to earn their interest.

So, she goes all out, tricking them into opening a lot of short positions, deliberately not blowing them up completely, and always giving them hope.

This is pure financial thinking.

Earning someone’s principal is too petty; as long as they can afford interest, earning interest is the safest business.

After all, once the principal is exhausted, people won’t invest anymore.

Of course, if they eventually can’t afford the interest, Jiang Banxia will certainly recover the principal as well.

Though a year might seem long, in daily terms, they’re paying tens of millions of US Dollars in interest daily, which is already higher than the platform’s original profit.

They almost did nothing, just put out a long string of numerical codes.

"Ha! People in finance have filthy hearts!"

"Filthy? Filthy? Filthy? Anyway, I’m going to weld them onto this for half a year..."

"They’ll launch a public opinion campaign. After all, you used user funds; if they can mobilize all users to withdraw from their accounts, it will result in some account funds being unable to be reimbursed."

Jiang Banxia: "?????, how much did I even use?"

Li Yang said helplessly, "But I used five hundred billion US Dollars."

"Ahem... Master Li, you’re dragging me down!"

"Did I? Haven’t used this strategy before, right?"

...

Indeed, that’s a considerable risk, but Jiang Banxia noticed Li Yang wasn’t too worried, so she didn’t mind.

Li Yang is more reliable in his actions than anyone else; if he didn’t worry, it meant he had a way to handle it.

Besides, it’s just five hundred billion US Dollars. Solutions can always be found!

In the following days, Jiang Banxia continued placing chips outside the market, and sometimes would even sabotage her own side to give the opponent some false impressions.