RE: Questions from a BitShares Newbie
I finally got to a point with trading on the bitshares exchange where I "got it". Part of the confusion revolves around its flexibility. You can literally trade so many pair combinations that I couldn't wrap my mind around the relative "values". Couple that with lack of liquidity, and I found myself going to outside exchanges to check the going rate on various cryptos.
Leaving your trading platform to check prices is totally counter-intuitive. The first thing I decided to do was to only trade in bitUSD:SOMECRYPTO. This allowed me to fully quantify my trade order.
So, the way I invest in bitshares, while simultaneously owning other crypto is as follows:
- I bought a lot of bitshares when they were cheap (hell, they are still cheap but you know what I mean)
- I borrowed bitUSD (collateralized at 4:1 from bitshares).
- I used the bitUSD to buy crypto that I felt were undervalued.
By borrowing bitUSD with bts as collateral, you are, by definition showing faith in the underlying bts asset. You have the opportunity to benefit from both your investment in the other crypto, and any price increase that my come to bitshares.
It is important to have reserve shares in case the bts price falls so you can add to your collateral position if it gets close to 2:1.
One last thought:
It would make a lot of sense to display the spot price for the common cryptos on the Exchange page. This would keep me from going elsewhere to check the price. Ultimately, with enough liquidity this problem will go away.
I completely agree and had similar confusions. That's why I created this cryptocurrency spreadsheet so I could track assets in USD, BTC, and BTS. I needed all three to compare prices across various exchanges and coinmarketcap. When a price is good in one place for arbitrage (or just to know the price hasn't yet "caught up" so it's a cheap buy), I needed a way to quickly compare relative values in various currencies. You may find that spreadsheet useful. I've really been enjoying playing with it and improving my own copy with buttons which activate scripts and such (see the comments for more on that).
I've done the bitUSD loan thing a few times now and only this last one will I have to a wait a bit to pay down because BTS went down in value and I bought BTS with my bitUSD loan. I actually went 5:1 on that one just to be safe and not have to check it all the time. I also have a good amount of BTS on an exchange so I can increase my holdings a bit when things move around.