This post will be very short analysis of BFX. The new product of Bitfinex. If you really want to know what BFX token is you should go to the Bitfinex site and read their announcements or product specifications. I can tell you what the BFX token is by one word. :) . Yes exactly. That word. Ok, stop kidding. BFX token is an escape plan.
Hack
As you might know Bitfinex was hacked.
(for more details read this http://www.coindesk.com/bitfinex-bitcoin-hack-know-dont-know/)
BFX
So, what the BFX token represent? Let’s assume that BFX token is something like stock of the company. I can share my opinion based on analysis which I did past days ago. Let’s look at the problem a bit closer to evaluate this token. This is the chart of BFX. The current market price is 0.54. BFX is UP about 80% from beginning. Wow, The massive healthy company if people wants to buy. Isn’t it ? Or maybe is problem somewhere else.They don't know what they are trading. Or maybe I don't know what they are trading. :) who knows?
This is just brief overview of orderbook. there is enough money so market looks healthy too.
The Costs
I am a bit skeptical about this company and their escape plan. First of all let’s look at the business side of the problem. Bitfinex has one of the highest fees around the globe. Why they charge that huge fees is mystery for me. Why clients are able to pay this fees is even bigger mystery. The most curious thing is that people are willing to pay fees for real valuable products and BFX tokens as well. Wait a bit, paying fees for bailing out? Isn't that crazy?
Income analysis
It is even more crazier since we can calculate income from this bail out strategy. Look at the sum row for BFXUSD and BFXBTC products. 450 USD on trading fees of these products today. Btw: today was extremely good day for them. The volatility is high like hell. Bitfinex is not able to make profit of 7753.15 $USD every day. The ordinary day is just half of it.
The good thing is that company wants to recovery. they are willing to pay this thing. 66 -70 million dollar is not a small amount. They lost the money and they want to pay back something. It is a good sign. What is the chance to succeed ? I don't know but I can share some more data. This is the chart of market participation at bitcoin trading. China is not included for one reason. All cryptocurrency exchanges out of China looks ridiculously small. I put Okcoin.com, Bitstamp, Bitfinex, GDAX, ItBit,Gemini, BTC-e and Kraken to this sample. As you may see Bitfinex volume is decreasing massively, especially after attack.
The chart above is not that pessimistic at comparison with other chart. Look at the picture below. This is the chart of trading volume on the Bitfinex. (only BTC) I put there BTC trading volume only because the highest amount of money is collected from bitcoin.
The end
Well, and this is the end . End of the blog post of course. I am not suggesting it is end of the Bitfinex. (obviously) :)
I wrote this article because I don't understand why people are willing to pay for BFX tokens. Am I missing something? Is there any hidden advantage behind the Bitfinex I have no clue about. Tell me please.