{"id":1899,"date":"2017-01-15T14:25:27","date_gmt":"2017-01-15T18:25:27","guid":{"rendered":"https:\/\/howigrowmywealth.com\/?p=1899"},"modified":"2017-01-16T15:58:43","modified_gmt":"2017-01-16T19:58:43","slug":"selling-bfx-tokens-recoup-losses-faster","status":"publish","type":"post","link":"https:\/\/howigrowmywealth.com\/selling-bfx-tokens-recoup-losses-faster\/","title":{"rendered":"Selling BFX Tokens to Recoup Losses Faster"},"content":{"rendered":"
Bitfinex was hacked<\/a> back on 2 August 2016. About 36% of Bitfinex holdings were stolen. All Bitfinex account holders took a 36% loss\u00a0and were issued one BFX token for each dollar-equivalent in value that was lost.<\/p>\n BFX tokens are basically “IOU<\/a>s” specific to Bitfinex. I was issued the 313 BFX tokens since I had lost 313 dollars. <\/p>\n BFX tokens were then made tradable and the price plummeted from a 1 to 1 parity with the dollar down to a fraction of a dollar.<\/p>\n This enabled folks to close their BFX tokens and get some of their money back immediately. Or they could choose to hold onto the BFX and wait for Bitfinex to raise capital to make good on these IOUs.<\/p>\n I was fairly upset for a while about this hack and my loss. I withdrew the remaining 64% of my holdings from Bitfinex and I didn’t login to Bitfinex for a while.<\/p>\n But one of my readers informed me that he was going to be investing some more money in margin funding at Bitfinex and that got me interested again.<\/p>\n Plus I still had 313 BFX tokens sitting in my account.<\/p>\n About a month after the hack, in September 2016, Bitfinex started redeeming BFX tokens for dollars at a 1 to 1 parity. They essentially began making good on the IOUs they’d given out.<\/p>\n I received $17 in BFX token redemptions between 1 September 2016 and 7 January 2017. Bitfinex most recently redeemed 2% of all outstanding BFX<\/a> tokens on 10 January.<\/p>\n I calculate that if it took four months to get $17 back it will take over six years to get the rest back.<\/p>\n Because the rate of redemption is so slow\u00a0I sold my BFX tokens for dollars at a rate of .55 USD per token. <\/p>\n I’ve started margin lending using these dollars.<\/p>\n My thought process is that Bitfinex was hurt so much by the last hack that they are hyper-vigilant<\/a> now. They’ve implemented additional security features such as two-factor authentication and offline, cold wallets.<\/p>\n Bitfinex\u00a0is the only game in town I’m aware of that allows users to do margin funding.<\/p>\n And I want to recoup my losses. As of writing the “Flash Rate of Return” for margin funding is .07% per day. So based on my calculations I should be able to get back to $313 in about 3.5 years. <\/p>\n That is assuming the FRR stays at or above .07% per day. Hopefully it goes up.<\/p>\nBFX Redemptions are Slow<\/h2>\n
Why go back to Bitfinex after their security breach cost me 36%?<\/h2>\n
Bitcoin is Volatile<\/h2>\n